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Exam 4: Process Costing and Hybrid Product-Costing Systems

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Question 41

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Which of the following choices correctly shows how costs are accumulated in a process-costing system?

A) Choice A
B) Choice B
C) Choice C
D) Choice D
E) Choice E

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Question 42

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In a process-costing system,manufacturing costs are accumulated by:

A) batch.
B) batch and time period.
C) department.
D) department and time perioD.
E) department or process,and time period.

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Question 43

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Operation costing is a popular type of accounting system,one that combines selected features of job-order and process-cost accounting. Required: A.Briefly discuss the basic features that are associated with an operation-costing system. A.Operation costing is used by firms that produce different models of similar products.The products go through essentially the same manufacturing process,so conversion costs can be assigned in a manner similar to that used in process-costing systems.Materials,on the other hand,are unique to the individual goods being produced and,accordingly,the cost is assigned by batch (or in a manner similar to that used in job costing). B.A sweater manufacturer produces multiple versions of its single product: sweaters.The garments likely incur roughly the same labor and overhead cost,with the major difference among models being in the areas of fabric,color,and patterns (i.e. ,materials).Thus,the material cost will often differ and the manufacturer should take these differences into account,not spread costs equally over all units produced as would be done in a process-cost-type of procedure. B.Explain why a sweater manufacturer may have a need for an operation-costing system.

Using the weighted-average method of process costing,the equivalent units of conversion activity total:

Willingham uses a process-costing system for its single product,which is manufactured from Material X and Material Y.X and Y are introduced to the product as follows: Material X: Added at the beginning of manufacturing Material Y: Added at the 75% stage of completion The company started and completed 40,000 units during the period,and had an ending work-in-process inventory amounting to 8,000 units,20% complete.Which of the following choices correctly expresses the total equivalent units of production for Material X and Material Y?

When determining the cost of a manufactured good under an operation-costing system,a company would:

The equivalent units of direct materials for April total:

Peach Company uses a weighted-average process-costing system.Company records disclosed that the firm completed 40,000 units during the month and had 10,000 units in process at month-end,20% complete.Conversion costs associated with the beginning work-in-process inventory amounted to $231,000,and amounts that relate to the current month totaled $966,000.If conversion is incurred uniformly throughout manufacturing,Peach's equivalent-unit cost is:

Which of the following statements about operation costing is (are) true? I.Conversion costs are accumulated by department. II.Direct material costs are accumulated by batch. III.Operation costing is a hybrid product-costing system.

Ohio,Inc. ,which uses a process-cost accounting system,began operations on January 1 of the current year.The company incurs conversion cost evenly throughout manufacturing.If Ohio started work on 3,000 units during the period and these units were 70% of the way through manufacturing,it would be correct to say that the company has:

Corruption,Inc.overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory.What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured,respectively?

A considerable portion of the text's process-costing presentation illustrated the proper way to allocate manufacturing costs to the units completed during the period and the ending work-in-process inventory.For companies that have a single manufacturing department,the journal entry to recognize completed production involves a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.What journal entry,if any,is needed for these same companies to properly account for ending work in process?

Xin Co. ,had 3,000 units of work in process on April 1 that were 60% complete.During April,10,000 units were completed and as of April 30,4,000 units that were 40% complete remained in production.How many units were started during April?

Gilberto adds materials at the beginning of production and incurs conversion cost uniformly throughout manufacturing.Consider the data that follow. Conversion cost in the beginning work-in-process inventory totaled $120,000,and August conversion cost totaled $270,000.Assuming use of the weighted-average method,which of the following choices correctly depicts the number of equivalent units for materials and the conversion cost per equivalent unit?

Which of the following statements is false?

Using the weighted-average method of process costing,the cost per unit of conversion activity is:

On May 1,Dawdle Company had a work-in-process inventory of 10,000 units.The units were 100% complete for material and 30% complete for conversion,with respective costs of $30,000 and $1,850. During the month,150,000 units were completed and transferred to finished goods.The May 31 ending work-in-process inventory consisted of 10,000 units that were 100% complete with respect to materials and 80% complete with respect to conversion. Costs added during the month were $330,000 for materials and $503,750 for conversion. Required: Using the weighted-average method,calculate: A.total equivalent units for material and conversion. B.the cost per equivalent unit for material and conversion. C.the cost transferred to finished goods. D.the cost of ending work in process.

EnviroSmart Chemical Company refines a variety of petrochemical products.The following data pertain to the firm's Baton Rouge plant: