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Exam 18: Process Cost Systems

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Question 51

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The inventory at April 1, 2012, and the costs charged to Work in Process--Department B during April for Zarley Company are as follows: During April, all direct materials are transferred from Department A, the units in process at April 1 were completed, and of the 26,000 units entering the department, all were completed except 1,000 units which were 70% completed as to conversion costs. Inventories are costed by the first-in, first-out method. Prepare a cost of production report for April.

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Question 52

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In a just-in-time system, processing functions are combined into work centers, sometimes called departments.

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B) False

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Question 53

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When a process cost accounting system records the purchase of materials, the Materials account is credited.

The cost of production report reports the cost of the goods sold.

Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO and rounds average cost per unit to two decimal places) : Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period?

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period for direct materials is:

Just-in-time operations attempt to significantly reduce

Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900. The total conversion costs for the period were:

Which of the following is NOT a way in which process and job order cost systems are similar?

The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are: The correct ordering of the steps is:

Industries that typically use process cost systems include chemicals, oil, metals, food, paper, and pharmaceuticals.

In the manufacture of 15,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,500. What is the total conversion cost?

The inventory at April 1, 2012, and the costs charged to Work in Process--Department B during April for Hawk Company are as follows: During April, all direct materials are transferred from Department A, the units in process at April 1 were completed, and of the 10,000 units entering the department, all were completed except 1,200 units which were 25% completed as to conversion costs. Inventories are costed by the first-in, first-out method. Prepare a cost of production report for April.

Kramer Company started its production operations on August 1. During August, the printing department completed 17,600 units. There were 4,400 units in ending inventory which were 80% complete with respect to materials and 10% complete with respect to conversion costs. During August, the department accumulated materials costs of $45,408 and conversion costs of $76,670. Required: a. Calculate the cost of the goods transferred out. b. What is the value of the ending inventory? Round intermediate computation to nearest cent.

Equivalent units should be computed separately for direct materials and conversion costs.

Which of the following best describes the effect on direct labor when management adopts a just-in-time environment?

The cost of materials transferred into the Bottling Department of Mountain Springs Water Company is $32,400, with $26,000 from the Purifying Department, plus additional $6,400 from the materials storeroom. The conversion cost for the period in the Bottling Department is $8,750 ($3,750 factory applied and $5,000 direct labor.) The total costs transferred to finished goods for the period was $31,980. The Bottling Department had a beginning inventory of $1,860.

Which of the following entities would probably use a process costing system?

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of

Gilbert Corporation had 25,000 finished units and 8,000 units were 35% complete. The equivalent units totaled 30,200.