Q&A Hero

Q: If FIFO is used, what is the total cost of all units that were completed and transferred to finished goods during June? What is the total cost of the ending goods in process inventory?

Q: If FIFO is used, what was the materials cost per equivalent unit produced during June? What was the labor and overhead cost per equivalent unit produced during June?

Q: If FIFO has been used, how many equivalent units of materials were added to all units processed during June? How many equivalent units of labor and overhead were added to all units processed during June?

Q: A company uses a process cost accounting system. The following information is available regarding direct labor for the current year: Goods in process, January 1 5,500 units, 80% complete Goods in process, December 31 8,800 units, 40% complete Units completed and transferred to finished goods 46,900 units Direct labor costs during the year $266,300 (a) Calculate the equivalent units of production for direct labor for the year using weighted average. (b) Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

Q: A company uses a process cost accounting system. The following information is available regarding direct labor for the current year: Goods in process, January 1 5,500 units, 80% complete Goods in process, December 31 8,800 units, 40% complete Units completed and transferred to finished goods 46,900 units Direct labor costs during the year $266,300 (a) Calculate the equivalent units of production for direct labor for the year using FIFO. (b) Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

Q: The following data are available for Osman Corp. for the current year: Beginning inventory of goods in process 12,000 units, 60% completed Ending inventory of goods in process 18,000 units, 30% completed Units completed and transferred to finished goods during the year 144,000 units Using weighted average, calculate the equivalent units of production for the year.

Q: The following data are available for Osman Corp. for the current year: Beginning inventory of goods in process 12,000 units, 60% completed Ending inventory of goods in process 18,000 units, 30% completed Units completed and transferred to finished goods during the year 144,000 units Using FIFO, calculate the equivalent units of production for the year.

Q: A company's January 1 goods in process inventory contained 30,000 units that were one-fourth complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left one-fifth complete. Using weighted average, calculate the equivalent units of production for the year.

Q: A company's January 1 goods in process inventory contained 30,000 units that were one-fourth complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left one-fifth complete. Using FIFO, calculate the equivalent units of production for the year.

Q: Iolaus Company provides the following data for the current year: Estimated factory overhead $7,800 Factory overhead incurred 11,400 Factory overhead applied ? Estimated direct labor cost 12,000 Direct labor cost incurred 11,800 Required: (a) Calculate the predetermined overhead allocation rate based on direct labor. (b) Determine the amount of overhead applied to production. (c) Prepare the journal entry to apply factory overhead to goods in process.

Q: Prepare the required general journal entry to record the following transactions for the Flaherty Company. (a.) Incurred $95,000 of factory labor cost which is paid in cash. (b.) Used $42,000 of direct labor in the grinding department, and $36,000 of direct labor in the sifting department. (c.) Used $17,000 of indirect labor.

Q: Prepare the required general journal entries to record the following transactions for the Bell Company. (a.) Purchased $40,000 of raw materials on account. (b.) Used $12,000 of direct materials in the Mixing Department, and $17,000 of direct materials in the Assembly Department. (c.) Used $5,000 of indirect materials.

Q: Describe the flow of overhead costs in a process cost accounting system, including accounts used.

Q: Describe the flow of labor in a process cost accounting system, including accounts used.

Q: Describe the flow of materials in a process cost accounting system, including accounts used.

Q: What are the four steps in accounting for production activity in a period?

Q: What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

Q: Briefly explain the conditions under which job order cost accounting systems and process cost accounting systems are commonly applied.

Q: Compare and contrast the FIFO and weighted-average methods of process costing.

Q: (a) Why is the Process Cost Summary important to management? (b) How does the Process Cost Summary accomplish its purposes?

Q: What is meant by equivalent units of production, and why are they important when a process cost accounting system is used?

Q: Job order manufacturing and process manufacturing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

Q: Match the following terms 1 to 7 with the definitions (a) through (g). __________ (1) Equivalent units of production. __________ (2) Job order cost accounting system. __________ (3) Hybrid manufacturing system. __________ (4) Process manufacturing system. __________ (5) Process cost accounting system. __________ (6) Materials consumption report. __________ (7) Process cost summary. (a) Costing system to determine the cost of producing each job or job lot. (b) Document that summarizes the materials a department uses during a reporting period; replaces materials requisition. (c) Report of costs charged to a department, its equivalent units of production achieved, even the costs assigned to its output. (d) A manufacturing system that contains features of both process and job order systems. (e) Number of units that would be completed if all effort during a period had been applied to units that were started and finished. (f) System of assigning direct materials, direct labor, and overhead to specific processes; total costs associated with each process are then divided by the number of units passing through that process to determine cost per equivalent unit. (g) Process of products in a continuous flow of steps.

Q: Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is: A. Accounts ReceivableAre Corporation 1,075 Cost of Goods Sold 800 Sales 1,075 Finished Goods Inventory 800 B. Accounts ReceivableAre Corporation 1,075 Finished Goods Inventory 800 Sales 275 C. Cost of Goods Sold 1,075 Sales 1,075 D. Finished Goods Inventory 800 Sales 1,075 Accounts ReceivableAre Corporation 1,075 Cost of Goods Sold 800 E. Accounts ReceivableAre Corporation 1,075 Selling expense 800 Sales 1,075 Cost of Goods Sold 800

Q: The following is an account for a production department, showing its costs for one month: Goods in Process Inventory Balance 5,400 Direct materials 21,600 Direct labor 16,200 Overhead 10,800 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory? A. $12,150 B. $2,160 C. $7,560 D. $54,000 E. $37,260

Q: A company uses a process cost accounting system and the weighted-averaage inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, three-fourths complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are one-fourth complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $30,000 and overhead costs of $40,000 for the period. The overhead cost per equivalent unit is: A. $0.126 B. $0.160 C. $0.178 D. $0.213 E. $0.373

Q: A company uses a process cost accounting system and the FIFO inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, three-fourths complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are one-fourth complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $24,000 and overhead costs of $32,000 for the period. The direct labor cost per equivalent unit is: A. $0.126 B. $0.160 C. $0.178 D. $0.213 E. $0.373

Q: During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. If the weighted-average method is used and $14,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory? A. $1,615 B. $3,250 C. $2,600 D. $2,500 E. $1,500

Q: During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. If the FIFO method is used and $13,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory? A. $1,615 B. $3,250 C. $2,600 D. $2,500 E. $1,500

Q: The Filtering Department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: direct materials, $77,000; direct labor, $44,000; and factory overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Filtering Department is: A. $66,000 B. $110,000 C. $132,000 D. $125,400 E. $191,400

Q: The Machining Department started the current month with beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is: A. $13,000 B. $1,000 C. $49,000 D. $110,000 E. $3,000

Q: A department had 65 units which were 20% complete in beginning Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process? A. 83 B. 70 C. 100 D. 77 E. 107

Q: A department had 65 units which were 20% complete in beginning Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the FIFO method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process? A. 83 B. 70 C. 100 D. 77 E. 107

Q: A department had 600 units which were 40% complete in beginning Goods in Process Inventory. During the current period, 7,000 units were transferred out. Ending Goods in Process Inventory was 800 units which were 40% complete. Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process? A. 7,080 B. 6,960 C. 7,320 D. 7,680 E. 7,800

Q: A department had 600 units which were 40% complete in beginning Goods in Process Inventory. During the current period, 7,000 units were transferred out. Ending Goods in Process Inventory was 800 units which were 40% complete. Using the FIFO method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process? A. 7,080 B. 6,960 C. 7,320 D. 7,680 E. 7,800

Q: If the weighted-average inventory method were used, the equivalent units for the year would be: A. 3,320 B. 3,200 C. 3,240 D. 3,520 E. 3,230

Q: The number of units transferred to finished goods during the year is: A. 3,200 units. B. 3,000 units. C. 3,400 units. D. 3,160 units. E. 3,500 units.

Q: FIFO equivalent units of production for the year are: A. 3,320 units. B. 3,200 units. C. 3,240 units. D. 3,520 units. E. 3,420 units.

Q: A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under the weighted-average inventory valuation method, what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively? A. 210,000;120,000 B. 210,000; 180,000 C. 167,500; 167,500 D. 160,000; 162,500 E. 160,000; 167,500

Q: A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under FIFO what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively? A. 210,000;120,000 B. 210,000; 180,000 C. 167,500; 167,500 D. 160,000; 162,500 E. 160,000; 167,500

Q: During a period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete with respect to direct labor at the beginning of the period and 30,000 were started and completed during the period. Also, during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. Using the weighted-average inventory valuation method, the number of equivalent units of labor added by the end of the period was: A. 46,000 units. B. 50,000 units. C. 52,000 units. D. 54,000 units. E. 56,000 units.

Q: During a period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete with respect to direct labor at the beginning of the period and 30,000 were started and completed during the period. Also, during the period, 10,000 units were started but brought only to a stage of being htree-fifths completed. Using the FIFO inventory valuation method, the number of equivalent units produced by Department A during the period was: A. 46,000 units. B. 50,000 units. C. 52,000 units. D. 54,000 units. E. 56,000 units.

Q: Service firms, unlike manufacturing firms, should only use actual costs when determining a selling price for their services.

Q: Job order costing is applicable to manufacturing firms only and not service firms.

Q: The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods in Process Inventory account.

Q: When a job is finished, its job cost sheet is completed and moved from the file of jobs in process to the file of finished jobs that are yet to be delivered to customers.

Q: Job cost sheets are used to track all of the costs assigned to a job, including direct materials, direct labor, overhead, and all selling and administrative costs.

Q: A job cost sheet is useful for developing financial accounting numbers but does not contain information that is useful for managing the manufacturing process.

Q: In a job order cost accounting system, the total balances of all of the job cost sheets for unfinished jobs equal the balance in the Goods in Process Inventory account.

Q: The raw materials section of a job cost sheet shows the materials costs assigned to a job, but the direct labor section shows only the total hours of labor exerted by employees on the job.

Q: A company's file of job cost sheets for finished but unsold jobs equals the balance in the Finished Goods Inventory account.

Q: Job order manufacturing systems would be appropriate for companies that produce training films for a specific customer.

Q: A job order cost accounting system would be appropriate for a manufacturer of automobile tires.

Q: Job order manufacturing systems would be appropriate for companies that produce compact disks or disposable cameras.

Q: Job order manufacturing systems would be appropriate for companies that produce custom homes, specialized equipment, and special computer systems.

Q: A manufacturing firm that produces large numbers of standardized units would normally use a job order cost accounting system.

Q: There are two basic types of cost accounting systems: job order costing and periodic costing.

Q: Cost accounting systems accumulate costs and then assign them to products or services.

Q: A manufacturing company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Goods in Process Inventory.

Q: A ___________________________________ is calculated by relating total estimated factory overhead to an allocation factor such as total estimated direct labor cost, and is used to allocate factory overhead to specific jobs.

Q: When factory payroll for indirect labor is assigned, __________________ is debited.

Q: When factory payroll is assigned to specific jobs, ______________________ is debited.

Q: In a job order cost accounting system, raw materials requisitioned as direct materials are debited to ______________________; indirect materials are debited to ___________________.

Q: When a job is finished, its job cost sheet is completed and moved from the jobs in process file to the ____________________ file.

Q: The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _____________________ inventory.

Q: A ______________________ is a separate record maintained for each job.

Q: _______________________, or customized production, produces products in response to customer orders.

Q: A ______________________ accounting system records manufacturing activities using a periodic inventory system. A ____________________ accounting system records manufacturing activities using a perpetual inventory system.

Q: Use the following information to compute the following items: Beginning raw materials $5,600 Ending raw materials 4,200 Direct labor 17,250 Raw material purchases 7,400 Depreciation on factory equipment 6,750 Factory repairs and maintenance 3,300 Beginning finished goods inventory 10,800 Ending finished goods inventory 8,900 Beginning goods in process inventory 5,350 Ending goods in process inventory 6,300 OH application rate 60% of DL (A. Calculate the cost of materials used (B. Calculate the manufacturing costs incurred during the period. (C. Calculate the Cost of Goods Manufactured during the period. (D. Calculate the Cost of Goods Sold during the period. (E. Calculate the amount by which overhead is under- or overapplied.

Q: Samer Corp. uses a job order cost accounting system. The following is selected information pertaining to costs applied to jobs during the year: Jobs still in process at the end of the year: $167,000, which includes $65,000 direct labor costs. Jobs finished and sold during the year: $395,000, which includes $172,000 direct labor costs. Jobs finished but unsold at end of the year: $103,000, which includes $38,000 direct labor costs. Samer Corp.'s predetermined overhead allocation rate is 60% of direct labor cost. At the end of the year, the company's records show that $189,000 of factory overhead has been incurred. A. Determine the amount of overapplied or underapplied overhead. B. Prepare the necessary journal entry to close the Factory Overhead account assuming that any remaining balance is not material.

Q: A company charged the following amounts of overhead to jobs during the current year: $12,000 to jobs still in process, $42,000 to jobs completed but not sold, and $66,000 to jobs finished and sold. At year-end, the company's Factory Overhead account has a credit balance of $9,000, which is not a material amount. What entry (if any) should the company make at year-end related to this overhead balance?

Q: The predetermined overhead allocation rate for Forsythe, Inc. is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000. Actual costs incurred were: Direct materials $250,000 Direct labor 410,000 Indirect materials 55,000 Indirect labor 125,000 Sales commissions 50,000 Factory depreciation 170,000 Property taxes, factory 15,000 Factory utilities 35,000 Advertising 62,500 Factory equipment rental 100,000 (A. Calculate the predetermined overhead rate and calculate the overhead applied during the year. (B. Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.

Q: The following calendar year information about the Tahoma Corporation is available on December 31: Advertising expense $ 28,800 Depreciation of factory equipment 42,320 Depreciation of office equipment 10,800 Direct labor 142,600 Factory utilities 35,650 Interest expense 6,650 Inventories, January 1: Raw materials 3,450 Goods in process 17,250 Finished goods 35,650 Inventories, December 31: Raw materials 2,300 Goods in process 20,700 Finished goods 31,050 Raw materials purchases 132,450 Rent on factory building 41,400 Indirect labor 51,750 Sales commissions 16,500 The company applies overhead on the basis of 125% of direct labor costs. Calculate the amount of over- or underapplied overhead.

Q: The job cost sheet for Job number 93-471 includes the following information: DIRECT MATERIALS: 7/12 Requisition R93-566: 20 units @ $ 3.50 per unit 7/13 Requisition R93-576: 18 units @ $ 5.00 per unit 7/13 Requisition R93-578: 4 units @ $25.00 per unit 7/14 Requisition R93-591: 40 units @ $ 1.25 per unit DIRECT LABOR: 7/12 Employee 19: 8 hours @ $ 9.00 per hour 7/13 Employee 19: 6 hours @ $ 9.00 per hour 7/13 Employee 37: 6 hours @ $ 7.00 per hour 7/14 Employee 19: 5 hours @ $ 9.00 per hour 7/14 Employee 92: 5 hours @ $11.00 per hour FACTORY OVERHEAD: Assigned at 150% of direct labor cost. What is the total cost of Job number 93-471?

Q: A company's manufacturing accounting system applies overhead based on direct labor cost. The company's manufacturing costs for the current year were: direct labor, $57,600; direct materials, $76,800; and factory overhead, $9,600. Calculate the company's overhead allocation rate.

Q: Bean Company uses a job order cost system and last period incurred $70,000 of overhead and $100,000 of direct labor. Bean estimates that its overhead next period will be $65,000. The company also expects to incur $100,000 of direct labor. If Bean bases its overhead applied on direct labor cost, what should be the overhead allocation rate for the next period?

Q: A manufacturing company uses an overhead allocation rate based on direct labor cost. The company's Goods in Process Inventory account has a $15,000 debit balance after all posting is completed, and the cost sheet of the one job still in process shows direct material costs of $6,600 and direct labor costs of $3,000. What is the company's overhead application rate?

Q: Selected information from the budget of the Khalid Corp. at the beginning of the year follows: Estimated factory overhead $132,000 Estimated direct labor hours 55,000 hours Estimated machine hours 41,250 hours Estimated direct labor cost $825,000 Actual factory overhead incurred during the year $144,000 Calculate the predetermined overhead allocation rate if the company uses the following as a basis: (A. Direct labor hours. (B. Direct labor cost. (C. Machine hours.

Q: A company's predetermined overhead allocation rate is 130% based on direct labor cost. How much overhead would be allocated to Job No. 105 if it required total direct labor costs of $60,000?

Q: Time tickets for factory employees during the month of August are summarized as follows: Job 919 $ 9,800 Job 920 14,650 Job 921 12,250 Job 922 16,000 Total direct labor $52,700 Indirect labor 16,800 Total labor cost $69,500 Prepare the necessary journal entries to record factory payroll.