Q&A Hero

Q: When a process cost accounting system assigns the cost of materials to a production department, the journal entry debits the Raw Materials Inventory account and credits the Goods in Process Inventory account for that department.

Q: When a process cost accounting system records the purchase of raw materials, the Raw Materials Inventory account is debited.

Q: When a process cost accounting system records the purchase of raw materials, the Raw Materials Inventory account is credited.

Q: Hybrid costing systems can only be applied to agricultural products.

Q: Hybrid systems contain aspects of both process and job order operations.

Q: Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

Q: Direct costs in process cost accounting include only those costs that can be readily identified with particular product units.

Q: In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

Q: In process cost accounting, the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

Q: The use of process costing is of little benefit to a service type of operation.

Q: A unique feature of process costing systems is the use of a single Goods in Process Inventory control account.

Q: Process cost accounting systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps.

Q: Process cost accounting systems are used only by companies that manufacture physical products; companies and other organizations that provide services to their customers do not use process cost accounting.

Q: When defining direct costs and indirect costs in process costing, the process is the cost object.

Q: Companies that use a series of manufacturing processes to produce standardized products should use a process cost accounting system.

Q: A company that uses a process cost accounting system maintains separate Goods in Process Inventory accounts for each of its manufacturing departments.

Q: Process cost accounting systems consider overhead costs to include those costs that cannot be readily identified with any specific process.

Q: In process cost accounting, all labor that is applied exclusively in a single production department is considered to be direct labor.

Q: Process costing is applied to operations with repetitive production and heterogeneous products.

Q: Accountants use the term "process cost accounting system" because these systems use a number of trained individuals and computers to process the collected cost information.

Q: Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

Q: A manufacturing company may choose to use either a job order cost accounting system or a process cost accounting system, without considering the manner in which it produces its products.

Q: Process cost accounting systems are commonly used by companies that produce a large volume of standardized units on a continuous basis.

Q: The weighted-average method of process costing computes the cost per equivalent unit based solely on the current periods EUPs and costs.

Q: The FIFO method of process costing computes equivalent units of production in a slightly different manner than the computation used in the weighted-average method of process costing.

Q: The FIFO method of process costing has slightly different objectives from the weighted-average method of process costing.

Q: The FIFO method of process costing assigns costs to units assuming a first-in, first-out flow of product.

Q: The process cost summary presents calculations of the cost of units completed during the reporting period but does not present any information about the ending goods in process inventory.

Q: A process cost summary shows the cost of a particular job manufactured in the reporting period.

Q: A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Goods in Process Inventory account at the beginning of the period.

Q: A process cost summary includes the amounts of equivalent finished units of production for the period.

Q: A process cost summary is an accounting report that describes the costs charged to a department, the equivalent units of production by the department, and how the costs were assigned to the output.

Q: The process cost summary is an important managerial accounting report produced by a process cost accounting system.

Q: The last step in the four-step accounting procedure for process costing is the calculation of equivalent units of production.

Q: "Equivalent units of production" is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.

Q: Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Q: Equivalent units of production are always the same as the total number of physical units finished during the period.

Q: In a process cost accounting system, a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Q: Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

Q: To determine unit cost under a process cost accounting system, equivalent units produced must be calculated if the company has goods in process inventories.

Q: A production department is an organizational unit of a factory that has the responsibility for at least partially manufacturing or producing a product or service.

Q: Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

Q: In a process manufacturing system, products pass through a series of sequential processes.

Q: The managers of process manufacturing systems focus on the series of processes needed to complete the production of products.

Q: In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Goods in Process, Dept #1 to ________________ to _______________ to ______________.

Q: In process cost accounting systems, when units are transferred from the Softening Department to the Hardening Department, ____________________ is debited and __________________________ is credited.

Q: On a process cost summary, the total costs to account for (the processing costs for the period plus the goods in process at the beginning of the period) should equal ___________________ (____________________ plus _____________________).

Q: In process costing, factory overhead incurred does not usually equal that applied, which yields either ____________________ or ___________________ overhead.

Q: In a process cost accounting system, factory wages are debited to _______________, and when direct labor is used, that account is credited and ____________________ is debited. When indirect labor is used, the ________________________ account is debited and ______________________ is credited.

Q: In a process cost accounting system, direct materials used are debited to the _________________ account, and indirect materials used are debited to the ______________________ account.

Q: A ____________________ system contains features of both process and job order operations.

Q: Materials and labor costs that are clearly associated with a specific process are known as ___________________. Those costs that are not clearly associated with a specific process are called ________________.

Q: The three distinct groups of units that must be considered in determining the equivalent units of production under the FIFO method of process costing are: (a) _______________, (b)_______________, and (c)_____________________.

Q: ________ distinct groups of units must be considered in determining the equivalent units of production under the FIFO method of process costing.

Q: The FIFO method of process costing accounts for cost flow in a ______________ manner.

Q: The _____________ method of process costing assigns costs to units assuming a first-in, first-out flow of product.

Q: A process cost summary involves computations and analysis at four sequential steps. These are (1) _________ (2) _____________, (3) _______________, and (4) ______________.

Q: The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, which reconciles _____________________ with the _____________________.

Q: The third step in accounting for production activity in a period is to compute the ______________________.

Q: The second step in accounting for production activity in a period is to compute ______________________.

Q: The first step in accounting for production activity in a period, ________________, is a reconciliation of the physical units started in a period with the physical units completed in that period.

Q: Partially completed production is measured for an account at two points in time for each accounting period. These measurement points and the account are ________________ and ____________.

Q: An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

Q: Process manufacturing, also called process operations or process production, is the ___________ production of products in a _____________________ flow of steps.

Q: Based on the table of cost information below, prepare the general journal entry required to record the: A. Transfer of goods from the molding department to the finished goods inventory. B. Cost of goods sold for November. The following table of cost information is available for the Messier Company for the month of November: Goods in Process Inventory Mixing Goods in Process Inventory Molding Finished Goods Inventory Beginning Inventory $12,000 $15,000 $24,000 Costs incurred: Direct materials 22,000 14,000 Direct labor 32,000 17,000 Overhead applied 47,000 24,500 Costs transferred out (100,000 ) (152,000 ) Costs transferred in 100,000 152,000 Cost of goods sold (149,000 ) Ending inventory 13,000 18,500 27,000

Q: Assuming the FIFO inventory valuation method, use the following information to determine the cost of the goods completed during the current reporting period: Equivalent Cost Total Units per Unit Cost Beginning goods in process: Costs from prior month $735 Materials costs added 60 $ 5.00 Labor and overhead cost added 20 12.00 Started and completed goods: Materials costs added 1,000 5.00 Labor and overhead cost added 1,000 12.00

Q: . Tanner, Inc. uses a process cost accounting system with weighted-average valuation method. The following operating and cost data occurred during October: October 1, Inventory: 30,000 units 100% complete for materials ($82,500) and 50% complete for direct labor ($10,500) and overhead ($21,000) . October 31, Inventory: 20,000 units 100% complete for materials and 30% complete for direct labor and overhead Units completed during Oct.: 50,000 units October production costs: Direct materials $110,000 Direct labor 28,700 Overhead 57,400 Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary.

Q: Nano Company uses a process cost system and the weighted-average inventory valuation method. The Nano Assembly Department's beginning inventory consisted of 40,000 units that were three-fifths complete with respect to direct labor and overhead. The department started and finished 149,000 units with respect to direct labor and overhead. The ending inventory consists of 60,000 units that are three-fourths complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department Goods in Process account included direct labor costs of $292,500 and overhead costs of $140,400. (a) What is the direct labor cost per equivalent unit? (b) What is the overhead cost per equivalent unit?

Q: What total cost should be assigned to the units that were in process at the end of August?

Q: What total cost should be assigned to all units that were completed during August?

Q: What total cost should be assigned to the units that were started and completed during August?

Q: What total cost should be assigned to the units that were in the beginning goods in process inventory and completed during August?

Q: What was the cost of the direct labor used in the Bagging Department?

Q: What was the cost of the direct materials used in the Grating Department?

Q: What was the cost of the beginning inventory of finished goods?

Q: What was the cost of the goods transferred out of the Bagging Department and into the finished goods inventory?

Q: What was the cost of goods transferred out of the Grating Department and into the Bagging Department?

Q: Bimrose Manufacturing uses process cost accounting and FIFO for its three-department operation. Direct materials are added at the beginning of the Department 1 process, at the halfway point of the Department 2 process, and at the beginning of the Department 3 process. Direct labor and overhead are incurred evenly throughout all departments' processes. The following information is available for September: Department 1 2 3 Beginning in process inventory: Units 2,500 5,500 1,500 Percent complete 60% 40% 80% Ending goods in process inventory: Units 3,500 4,200 6,500 Percent complete 30% 60% 70% Units completed 14,500 15,800 10,800 (a) Determine the number of units started and completed in Department 1, and the number of units transferred into and completed in Departments 2 and 3. (b) Determine the equivalent units of production for direct materials, direct labor, and overhead for each department.

Q: Equivalent Assignment of costs to finished goods Direct materials 45,000 $2.239 $100,755 Direct labor and overhead 45,000 819 Total cost of goods completed Cost of goods in ending goods in process Direct materials 1,600 $2.239 $ 3,582 Direct labor and overhead 400 1.819 Total costs of goods in process Reference To: 16_04 Refer To: 16_04

Q: Assume that the Painting Department of the Richardson Factory uses the weighted-average method. What is the cost of all units that were completed and transferred to finished goods in June? What is the total cost of ending goods in process?