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Exam 18: Process Costing

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Question 1

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The Assembling Department of Oberon,Inc.had 11,000 units in process on December 1 and received 30,400 units from the Sewing Department.During the month,it completed 20,700 units and transferred them to the Packaging Department.Calculate the number of units accounted for by the Assembling Department for December.The company uses the FIFO method.

A) 20,700 units
B) 41,400 units
C) 11,000 units
D) 30,400 units

E) All of the above
F) B) and C)

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Question 2

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The Assembly Department of Intuitive,Inc. ,manufacturer of computers,had 4,500 units of beginning inventory in September,and 3,000 units were transferred to it by the Production Department.The Assembly Department completed 1,500 units during the month and transferred them to the Packaging Department.Calculate the total number of units accounted for by the Assembly Department if it had 6,000 units in ending inventory.The weighted-average method is used.

A) 6,000 units
B) 3,000 units
C) 4,500 units
D) 7,500 units

E) A) and D)
F) B) and D)

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Question 3

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Morewell,Inc.used a predetermined overhead allocation rate to allocate $80,000 and $50,000 of indirect costs to Coloring Department and Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.

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

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

The cost of units sold is recorded by debiting Cost of Goods Sold and crediting ________.

Anthony Products manufactures a line of desk chairs.Anthony's production operations are divided into two departments - Department 1 and Department 2.The company uses a process costing system.Anthony incurred the following costs during the year to produce 25,700 chairs: $\begin{array} { | l | l | } \hline \text { Department 1 } & \$ 863,500 \\\hline \text { Department 2 } & \$ 287,000 \\\hline\end{array}$ If Anthony sells 22,600 chairs during the year,what will be the cost per chair produced? (Round your answer to two decimal places. )

A textile manufacturing company is most likely to use job order costing to arrive at the cost per unit of textile manufactured and sold to customers.

The first-in,first-out (FIFO) method creates better month-to-month cost comparisons than the weighted-average method ________.

When indirect materials are issued to production,the Raw Materials Inventory account is credited.

Cost amounts that are transferred out of one department become the transferred in cost for the next department.

Under the first-in,first-out (FIFO) method,the cost of equivalent units of production is calculated by ________.

A production cost report shows only the calculations for the physical flow of products.

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

The ________ account is credited to adjust for underallocated overhead costs.

Under the first-in,first-out (FIFO)method,prior period costs are not merged with current period costs.

A process costing system is generally used by companies that produce homogeneous products.

Which of the following statements correctly describes the term "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.

Conversion costs include ________.