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Exam 20: Process Costing

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Question 51

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Under process costing,the costs incurred by each department are reported in a separate production cost report for each department.

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Question 52

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When indirect materials are used in production,the Raw Materials Inventory account is credited.Process costing is used.

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Question 53

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Carolina Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials were assigned to the two production departments: $280,000 to Department I and $300,000 to Department II.During the period,$8,000 of indirect materials were used in production.Provide the journal entry to record this transaction.Process costing is used.

Which of the following is used to calculate the number of units accounted for under first-in,first-out (FIFO) method of inventory valuation of process costing? This is the first department in a company using process costing.

Babette Manufacturing produces plastic toys and uses process costing.There are three processing departments-Assembling,Finishing,and Packaging.On January 1,the Finishing Department had 2000 units of partially processed product in production.During January,31,000 units were transferred in from the Assembling Department and 29,000 units were completed and transferred out.At the end of the month,4000 units of partially processed products remained in the Finishing Department.The weighted- average method is used.See additional details below. Finishing Department,ending balance at January 31 Percent completed for materials cost: $\quad 94 \%$ Percent completed for conversion cost: $\quad 70 \%$ What was the number of equivalent units for the month of January,with respect to direct materials,for the Finishing Department?

Under process costing,the number of units to account for must always be ________ the number of units accounted for.

Which of the following statements correctly describes the term "conversion costs"?

In a process costing system,equivalent units must be calculated separately for materials and conversion costs.

The combined production costs from all departments for completed products are transferred to the Cost of Goods Sold account immediately after the completion of all production processes.The perpetual inventory system is used.

When raw materials are purchased on account,the Accounts Payable account is credited.Process costing is used.

The Assembly Department of Binary,Inc.,a manufacturer of computers,had a beginning inventory of 5,000 units.During November,it assembled 2000 units and transferred them to the Packaging Department.It incurred $250,000 in direct materials and $75,000 in conversion costs.The ending inventory in November was 6000 units,which were 100% and 60% complete with respect to materials and conversion costs,respectively.Calculate the total equivalent units of production for conversion costs for November.The weighted-average method is used.

The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.

If a business operates in an industry that experiences significant cost changes,it would be to its benefit to use the first-in,first-out (FIFO)method.

In perpetual inventory system with process costing,the cost of units sold is recorded by debiting Cost of Goods Sold and crediting ________.

Insetto Biological Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,40,000 fl.oz.of chemicals were started in production.Of these,31,000 fl.oz.were completed and 9000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly throughout the process.The weighted-average method is used. At the end of the month,Insetto calculated equivalent units.The ending inventory in the Mixing Department was 60% complete with respect to conversion costs.With respect to conversion costs,how many equivalent units were calculated for the product that was completed and for ending inventory?

Both job order costing and process costing ________.

The equivalent units of production for transferred in units are always 100% because ________.

The adjusting entry for overallocated or underallocated manufacturing overhead is usually prepared at the beginning of the accounting period.Process costing is used.

Vermillion,Inc.has two processes-Dyeing Department and Finishing.The company sold 2,000 bolts of cloth for $220,000,of which $150,000 was sold on account.The total production cost was $385,000 for 5,500 bolts of cloth.The perpetual inventory system and process costing are used.What are the journal entries to record a sale if the company follows a process costing system?

What are conversion costs? In determining equivalent units of production,why are conversion costs calculated separately from direct materials?