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Exam 16: Process Costing and Analysis

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Question 21

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Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

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B) False

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Question 22

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In a process costing 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.

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Factory payroll; Goo...

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Question 23

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

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

Which of the following journal entries correctly records the current month's activity where $60,000 of direct material and $17,000 of indirect materials were used in the production process?

An expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period, is called:

A company's January 1 goods in process inventory contained 30,000 units that were 1/4 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 1/5 complete. Using FIFO, calculate the equivalent units of production for the year.

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

To compute an equivalent unit of production, one must be able to reasonably estimate:

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

A company's January 1 goods in process inventory contained 30,000 units that were 1/4 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 1/5 complete. Using Weighted Average, calculate the equivalent units of production for the year.

Which of the following journal entries correctly records the current month's activity where $250,000 of raw material was purchased for cash, and $150,000 of direct material and $60,000 of indirect materials were used in the production process?

Which of the following journal entries correctly records the current month's activity where $125,000 of raw material was purchased for cash, and $75,000 of direct material and $30,000 of indirect materials were used in the production process?

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

Medina Corp. had the following information available for the year: -The number of units transferred to finished goods during the year is:

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

Refer to the following information about the Painting Department in the Richardson Factory for the month of June: -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?

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

Refer to the following information about the Painting Department in the Richardson Factory for the month of June: -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?

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.