Hou Company applies factory overhead to its production departments on the basis of 90% of direct
labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing
Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production
departments is:
a.
Debit Goods in Process Inventory - Assembly $112,500; debit Goods in Process Inventory -
Finishing $31,500; credit Factory Overhead $144,000.
b.
Debit Factory Payroll $144,000; credit Cash $144,000.
c.
Debit Factory Overhead $144,000; credit Factory Payroll $144,000.
d.
Debit Factory Overhead - Assembly $112,500; debit Factory Overhead - Finishing $31,500; credit
Goods in Process Inventory $144,000.
e.
Debit Factory Overhead $144,000; credit Goods in Process Inventory - Assembly $112,500; credit
Goods in Process - Finishing $31,500.
A company uses the weighted average method for inventory costing. During a period, a production
department had 20,000 units in beginning goods in process inventory which were 40% complete; the
department completed and transferred 165,000 units. At the end of the period, 22,000 units were in
the ending goods in process inventory and are 75% complete. Compute the number of equivalent
units produced by the department.
a.
165000
b.181500
c.
145000
d.
187000
e.
173500
A company uses the FIFO method for inventory costing. During a period, a production department
had 20,000 units in beginning goods in process inventory which were 40% complete; the department
completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending
goods in process inventory and are 75% complete. Compute the number of equivalent units
produced by the department.
a.
181500
b.
187000
c.
165000
d.
145000
e.
173500
Which of the following is not one of the four steps in accounting for production activity and assigning
costs during a period under a process cost system?
a.
Determine over or underapplied overhead.
b.
Determine the physical flow of units.
c.
Assign and reconcile costs.
d.
Compute equivalent units of production.
e.
Compute the cost per equivalent unit.
During March, the production department of a process manufacturing system completed a number
of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were
in process at the beginning of March and 110,000 were started and completed in March. March's
beginning inventory units were 100% complete with respect to materials and 55% complete with
respect to labor. At the end of March, 30,000 additional units were in process in the production
department and were 100% complete with respect to materials and 30% complete with respect to
labor. The production department incurred direct materials cost of $253,000 and its beginning
inventory included materials cost of $93,500. Compute the direct materials cost per equivalent unit
for the department using the weighted-average method.
a.
$2.57.
b.
$2.40.
c.
$1.53.
d.
$2.10.
e.
$2.48.
The Machining Department started the current month with a beginning goods in process inventory
of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct
labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of
$109,000 was transferred out of the department to the next phase in the process. The ending
balance of the Goods in Process Inventory account for the Machining Department is:
a.
56000
b.
13000
c.
165000
d.
59000
e.
110000
Which of the following statements is most accurate?
a.
The weighted average method uses the stage of completion of the current period's beginning goods
in process inventory account in calculating equivalent units.
b.
The FIFO method of calculating equivalent units of production merges the work and the costs of the
beginning inventory with the work and the costs done during the current period.
c.
In process costing, estimating the degree of completion of units is usually more accurate for
conversion costs than for direct materials.
d.
It is not possible for there to be a significant difference between the cost of completed units
between the weighted average and the FIFO methods.
e.
The weighted average method focuses on the total costs and total equivalent units completed to
date; this is the major difference between the weighted average method and the FIFO method of
calculating equivalent units of production.
Source
Quantity sourced
Price of material per cwt
(1 Cwt = 100 pounds)
Loss Factor
Junk
40,000 pounds
$1.0
60%
Laundries
60,000 pounds
$3.0
25%
The weighted average cost of material per cwt of output from the two sources is:
a.
2.5 $
b.
3.4
c.
d.
Processes
Source
Wash and Dry
Grade
Cut
Pack
Junk
50,000 pounds
50,000
37500
25000
Laundry
60000
50000
40000
Textile
75000
60000
Labor Hours
1000 @ $1.1 per hour
3000 @ $1.1 per hour
600 @ $1.1 per hour
Which of the following statement(s) is/are correct?
a.
Cutting cost per cwt of output is higher than Grading cost per cwt of output
b.
Cutting cost per cwt of output of Laundry source is higher for the Laundry source than for Junk
source
c.
Packing cost per cwt of output is the same for Junk and Laundry source
d.
Grading cost per cwt of output of the Junk Source is more than for Laundry source
During March, the production department of a process manufacturing system completed a number
of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were
in process at the beginning of March and 110,000 were started and completed in March. March's
beginning inventory units were 100% complete with respect to materials and 55% complete with
respect to labor. At the end of March, 30,000 additional units were in process in the production
department and were 100% complete with respect to materials and 30% complete with respect to
labor. Compute the number of equivalent units with respect to both materials and direct labor
respectively for March using the FIFO method.
a.
165,000; 144,000.
b.
140,000; 130,250.
c.
135,000; 119,000.
d.
165,000; 165,000.
e.
144,000; 144,000.
