Accounting Principles , Tenth Edition

Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Chapter 21 Process Costing - all with Video Answers

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Chapter Questions

Problem 1

Which of the following items is not characteristic of a process cost system?
a. Once production begins, it continues until the finished product emerges.
b. The products produced are heterogeneous in nature.
c. The focus is on continually producing homogeneous products.
d. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead.

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Problem 2

Indicate which of the following statements is not correct.
a. Both a job order and a process cost system track the same three manufacturing cost elements-direct materials, direct labor, and manufacturing overhead.
b. A job order cost system uses only one work in process account, whereas a process cost system uses multiple work in process accounts.
c. Manufacturing costs are accumulated the same way in a job order and in a process cost system.
d. Manufacturing costs are assigned the same way in a job order and in a process cost system.

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Problem 3

In a process cost system, costs are assigned only:
a. to one work in process account.
b. to work in process and finished goods inventory.
c. to work in process finished gookk and cost of goods sold.
d. to work in process accounts.

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Problem 4

In making the journal entry to assign raw materials costs, a company:
a. debits Finished Goods Inventory.
b. often debits two or more work in process accounts.
c. generally credits two or more work in process accounts.
d. credits Finished Goods Inventory.

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Problem 5

In a process cost system, manufacturing overhead:
a. is assigned to finished goods at the end of each accounting period.
b. is assigned to a work in process account for each job as the job is completed.
c. is assigned to a work in process account for each production department on the basis of a predetermined overhead rate.
d. is assigned to a work in process account for cach production department as overhead costs are incurred.

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04:32

Problem 6

Conversion costs are the sum of:
a. fixed and variable overhead costs
b. labor costs and overhead costs.
c. direct material costs and overhead costs
d. direct labor and indirect labor costs.

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Problem 7

The Mixing Department's output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process $60 \%$ complete as to materials and conversion costs. Beginning inventory is 1,000 units, $40 \%$ complete as to materials and conversion costs. The equivalent units of production are:
a. 22.600 .
c. 24,000 .
b. 23,000 .
d. 25,000 .

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Problem 8

In RYZ Company, there are zero units in beginning work in process, 7,000 units started into production, and 500 units in ending work in process $20 \%$ completed. The physical units to be accounted for are:
a. 7,000 .
c. 7,600 .
b. 7360 .
d. 7,340 .

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Problem 9

Stock Company has 2,000 units in beginning work in process, 20\% complete as to conversion costs, 23,000 units transferred out to finished goods, and 3,000 units in ending work in process $33 \% \%$ complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. Equivalent units for materials and conversion costs are, respectively:
a. $22,000,24,000$.
c. $26,000,24,000$.
b. $24,000,26,000$.
d. $26,000,26,000$.

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Problem 10

Fortner Company has no beginning work in process; 9,000 units are transferred out and 3,000 units in ending work in process are one-third finished as to conversion costs and fully complete as to materials cost. If total materials cost is $$\$ 60,000$$, the unit materials cost is:
a. $$\$ 5.00$$.
c. $$\$ 6,00$$.
b. $$\$ 5.45$$ rounded.
d. No correct answer is given.

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Problem 11

Largo Company has unit costs of $$\$ 10$$ for materials and $$\$ 30$$ for conversion costs. If there are 2,500 units in ending work in process, $$40 \%$$ complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is:
a. $$\$ 45,000$$.
c. $$\$ 75,000$$.
b. $$\$ 55,000$$
d. $$\$ 100,000$$.

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Problem 12

A production cost report
a. is an external report.
b. shows costs charged to a department and costs accounted for.
c. shows equivalent units of production but not physical units.
d. contains six sections

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Problem 13

In a production cost report, units to be accounted for are calculated as:
a. Units started into production + Units in ending work in process.
b. Units started into production - Units in beginning work in process.
c. Units transferred out + Units in beginning work in process
d. Units started into production + Units in beginning work in process.

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Problem 14

Just-in-time processing (JT):
a. strives to eliminate inventories.
b. uses a pull approach in manufacturing.
c. Neither of the above.
d. Both (a) and (b).

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Problem 15

The sequence of activities in just-in-time processing begins when the manufacturer:
a. orders raw materials from a supplier.
b. issues raw materials to work in process inventory.
c. receives a sales order from a customer.
d. calculates its predetermined overhead rates.

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Problem 16

Activity-based costing-
a. assumes that the cost of a product is equal to the sum of the costs of all activities performed to manufacture it.
b. has become more widespread as overhead costs have been decreasing relative to materials and labor costs.
c. is similar to a conventional cost accounting system in accounting for direct labor and manufacturing overhead but differs in regard to direct materials.
d. uses a single unit-level basis to allocate overhead costs to products.

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Problem 17

Activity-based costing ( $A B C$ ):
a. can be used only in a process cost system.
b. focuses on units of production.
c. focuses on activities performed to produce a product.
d. uses only a single basis of allocation.

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Problem 18

The overhead rate for Machine Setups is $\$ 100$ per setup. Products $A$ and $B$ have $\$ 0$ and 60 setups, respectively. The overhead assigned to each proxluct is:
a. Product A \$8,000. Product B \$8,000.
b. Product A \$8,000. Product B \$6,000.
c. Product A \$6,000, Product B \$6,000.
d. Product A \$6,000, Product B \$8,000.

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