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Exam 20: Process Cost Systems

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Question 81

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

A) True
B) False

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Question 82

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Conversion and direct materials are generally both added at the end of the production process.

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B) False

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Question 83

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In a process costing system, costs flow into finished goods inventory only from the work in process inventory of the last manufacturing process.

In lean manufacturing, processing functions are combined into work centers, sometimes called departments.

If 10,000 units that were 40% completed were in process on November 1, 80,000 units were completed during November, and 12,000 units were 20% completed on November 30, the number of equivalent units of production for November was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)​

Use this information about the Assembly Department to answer the questions that follow. ? The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows: ? All direct materials are placed in process at the beginning of the process, and the average cost method is used to cost inventories. ? -The number of equivalent units of production for the period for materials if the average cost method is used to cost inventories was

Equivalent production units are generally determined for

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.?The correct ordering of the steps is

Equivalent units are the sum of direct materials used and direct labor incurred.

Yield measures the ratio of the materials output quantity to the materials input quantity.

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

Use this information about Department F to answer the questions that follow. Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for materials and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710. -If the average cost method is used, the materials cost per unit (rounded to the nearest cent) would be

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

Which of the following would use a process costing system?

If 30,000 units of materials enter production during the first year of operations, 25,000 of the units are finished, and 5,000 are 50% completed, the number of equivalent units of production would be 28,500.

Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period. During the period, 30,000 units of direct materials were added, 32,000 units were completed, and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was

In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost?

The direct materials costs and direct labor costs incurred by a production department are referred to as conversion costs.

A form prepared periodically for each processing department summarizing the units for which the department is accountable and the units to be assigned costs and the costs charged to the department and the allocation of these costs is termed a

The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is