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Exam 3: Process Cost Systems

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Question 61

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In process cost accounting, the costs of direct materials and direct labor are charged directly to

A) service departments
B) processing departments
C) customer accounts receivable
D) job orders

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Question 62

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Which of the following is not a characteristic of a process cost system?

A) manufacturing costs are grouped by departments
B) the system may use several work in process accounts
C) the system measures costs for each completed job
D) the system allocates costs between completed and partially completed units within a department

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Question 63

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Just-in-time operations attempt to significantly reduce

In a process costing system, each process will have a work in process inventory account.

Process cost systems use job order cost cards to accumulate cost data.

Process manufacturers typically use large machines to process a continuous flow of raw materials into a finished state.

The four steps necessary to complete a cost of production report in a process cost system are 1) allocate costs to transferred and partially completed units 2) determine the units to be assigned costs 3) determine the cost per equivalent unit 4) calculate equivalent units of production 5) The correct ordering of the steps is

Which of the following businesses would normally use job order costing systems and which would normally use process costing systems? Tax consultant Paint manufacturer Nail manufacturer Videographer Lotions and cosmetics manufacturer Web design

The journal entry to record the flow of costs into Department 2 for applied overhead is

The Mountain Springs Water Company has two departments, Purifying and Bottling.The Bottling Department had 8,000 liters in beginning work in process inventory 60% complete.During the period 70,000 liters were completed.The ending work in process was 3,000 liters 60% completed.What are the total equivalent units for direct materials under the FIFO method if materials were added at the beginning of the process?

Costs are transferred, along with the units, from one work in process inventory account to the next in a process costing system.

The number of equivalent units produced with respect to conversion costs is

On August 1, Jones Corporation's Packaging Department had work in process inventory of 8,000 units that were 75% complete with respect to materials and 30% complete with respect to conversion costs.The cost of these units was $99,525 $62,000 transferred-in from previous departments, $28,775 in materials, and $8,750 in labor and overhead.During August, 125,000 units were transferred into the department.These units had accumulated costs in previous departments of $1,418,560.The packaging department incurred costs of $799,225 for materials and $498,010 for conversion costs in August and transferred 131,000 units out of the department.The 2,000 units remaining in ending inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs.Jones uses the average cost method to cost its inventories. a Calculate the cost per equivalent unit for transferred-in costs, materials, and conversion costs. b Calculate the cost of the units transferred out of the department. c Calculate the cost of the ending inventory.

According to the just-in-time philosophy,

In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30% completed are in process at June 1, 28,000 units are completed during June, and 4,000 units were 80% completed at June 30, the number of equivalent units of production for June was 28,600.

Both process and job order cost systems maintain perpetual inventory accounts with subsidiary ledgers.

Conversion costs are generally added evenly throughout the process.

In a process cost system, product costs are accumulated by processing department rather than by job.

The Blue Lake Water Company has two departments, Purifying and Bottling.The Bottling Department received 76,000 liters from the Purifying Department.During the period, the Bottling Department completed 74,000 liters, including 3,000 liters of work in process at the beginning of the period.The ending work in process was 5,000 liters.How many liters were started and completed during the period?

All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used.What is the total cost of 3,600 units of beginning inventory which were completed during the period round unit cost calculations to four decimal places?