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ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

ACCT-505 Managerial Accounting_Week 2 Job Order and Process Costing Systems – Quiz

Set 1

1. Question : (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?

: A steel factory that processes iron ore into steel bars

A factory that processes sugar and other ingredients into black licorice
A costume maker that makes specialty costumes for figure skaters
All of these

2. Question : (TCO F) Process costing would be appropriate for each of the following except:

: custom furniture manufacturing.

oil refining.

grain milling.

newsprint production.

3. Question : (TCO F) Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:
Units Material Cost
Work in process on October 1 6,000 $3,000
Units started in October 50,000 $25,560
Units completed and transferred to next Department during October 44,000

What was the materials cost of work in process at on October 31?

4. Question : (TCO F) In a job-order costing system, the use of direct materials that have been previously purchased is recorded as a debit to:

: Raw Materials Inventory.

Work in Process Inventory

Finished Goods Inventory

Manufacturing Overhead

5. Question : (TCO F) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a:

: debit to Raw Materials of $74,000.

debit to Work in Process of $68,000.

credit to Manufacturing Overhead of $6,000.

debit to Work in Process of $74,000.

6. Question : (TCO F) Valles Corporation had $22,000 of raw materials on hand on February 1. During the month, the company purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a:

: credit to Raw Materials of $97,000.

debit to Raw Materials of $97,000.

credit to Raw Materials of $75,000.

debit to Raw Materials of $75,000.

1. Question : (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:

i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)

For each company, indicate whether the company is most likely to use job-order costing or process costing.

2. Question : (TCO F) Job 484 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $57,240
Direct labor hours 1,692 DLHs
Direct labor wage rate $12 per DLHS
Number of units completed 3,600 units

The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $24 per direct labor-hour.

Compute the unit product cost that would appear on the job cost sheet for this job.

3. Question : (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company’s inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650,000
Conversion $997,500
Units completed during the year 450,000

The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.

Required:

i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.

ii. Determine the cost transferred to finished goods.

iii. Determine the amount of cost that should be assigned to the ending work in process inventory.

4. Question : (TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $28,000 $29,000
Work In process $16,000 $14,000
Finished goods $42,000 $54,000

Additional Information
Raw material purchases $56,000
Direct labor costs $87,000
Manufacturing overhead cost incurred $51,000
Indirect materials included in manufacturing overhead costs incurred $3,000
Manufacturing overhead cost applied to work in process $55,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

Set 2

Question 1. 1. (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system? (Points : 5)
A steel factory that processes iron ore into steel bars
A factory that processes sugar and other ingredients into black licorice
A costume maker that makes specialty costumes for figure skaters
All of these

Question 2. 2. (TCO F) Luft Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

Units Percent Complete with respect to Conversion
Beginning work in process inventory 11,000 90%
Started in production during June 58,000
Ending work in process inventory 17,000 10%

According to the company’s records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.) (Points : 5)
$8.070
$7.891
$5.928
$4.584

Question 3. 3. (TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company’s processing departments for a recent month:

Units Material Cost
Beginning work in process 30,000 $22,000
Started during the month 80,000 $72,000
Units completed 85,000
Ending work in process 25,000

All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to: (Points : 5)
$0.86
$0.90
$1.10
$1.18

Question 4. 4. (TCO F) Which of the following accounts is debited when direct labor is recorded? (Points : 5)
Work in process
Salaries and wages expense
Salaries and wages payable
Manufacturing overhead

Question 5. 5. (TCO F) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a: (Points : 5)
debit to Raw Materials of $74,000.
debit to Work in Process of $68,000.
credit to Manufacturing Overhead of $6,000.
debit to Work in Process of $74,000.

Question 6. 6. (TCO F) During February, Degan Inc. transferred $60,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,000. The journal entries to record these transactions would include a: (Points : 5)
debit to Finished Goods of $65,000.
credit to Cost of Goods Sold of $65,000.
credit to Work in Process of $60,000.
credit to Finished Goods of $60,000.

Page 2
Question 1. 1. (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:

i. Custom boat builder
ii. Frozen cranberry juice processor
iii. Concrete block manufacturer
iv. Winery that produces a number of varietal wines
v. Aluminum refiner that makes aluminum ingots from bauxite ore

For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15)

Question 2. 2. (TCO F) Job 728 was recently completed. The following data have been recorded on its job cost sheet:

Direct materials $81,000
Direct labor hours 1,220 labor hours
Direct labor wage rate $15 per labor-hour
Machine Hours 1,520 machine hours
Number of units completed 4,400 units

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $16 per machine-hour.

Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)

Question 3. 3. (TCO F) Harmon Company uses the weighted-average method in its process costing system. The Curing Department of Harmon Company reported the following information for the month of November.
Units Percentage complete with respect to conversion
Work in process, November 1 10,000 80%
Units started 28,000
Completed and transferred out 30,000
Work in process, November 30 8,000 30%

Costs for November Materials Conversion
Work in process, November 1 $34,500 $48,600
Added during the month $146,000 $194,400

All materials are added at the beginning of the process.

Required: Compute the following items using the weighted-average method:

i. The equivalent units of production for materials.

ii. The cost per equivalent unit for conversion.

iii. The total cost assigned to units transferred out of the Curing Department during November.

iv. The cost assigned to work in process inventory as of November 30. (Points : 15)

Question 4. 4. (TCO F) Hunsicker Corporation has provided the following data for the month of January:

Inventories Beginning Ending
Raw materials $30,000 $33,000
Work In process $20,000 $18,000
Finished goods $52,000 $60,000

Additional Information
Raw material purchases $63,000
Direct labor costs $92,000
Manufacturing overhead cost incurred $75,000
Indirect materials included in manufacturing overhead costs incurred $6,000
Manufacturing overhead cost applied to work in process $69,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
(Points : 15)

Set 3

1. Question : (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is:
Student Answer:
the same as the number of units put into production.
less than the number of units put into production.
the same as the number of units completed.
less than the number of units completed.

2. Question : (TCO F) Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?
Student Answer:
Fast food restaurant
Shipbuilding
Crude oil refining
Candy making
3. Question : (TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company’s processing departments for a recent month:
Units Material Cost
Beginning work in process 30,000 $22,000
Started during the month 80,000 $72,000
Units completed 85,000
Ending work in process 25,000

All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:

4. Question : (TCO F) Which of the following accounts is debited when direct labor is recorded?
Student Answer:
Work in process
Salaries and wages expense
Salaries and wages payable
Manufacturing overhead

5. Question : (TCO F) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a:
Student Answer:
debit to Raw Materials of $74,000.
debit to Work in Process of $68,000.
credit to Manufacturing Overhead of $6,000.
debit to Work in Process of $74,000.

6. Question : (TCO F) During February, Degan Inc. transferred $60,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,000. The journal entries to record these transactions would include a:

Student Answer:
debit to Finished Goods of $65,000.
credit to Cost of Goods Sold of $65,000.
credit to Work in Process of $60,000.
credit to Finished Goods of $60,000.

Page 2
1. Question : (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
For each company, indicate whether the company is most likely to use job-order costing or process costing.

2. Question : (TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $61,050
Direct labor hours 1,332 labor hours
Direct labor wage rate $14 per labor-hour
Machine Hours 1,480 machine hours
Number of units completed 3,700 units
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. Compute the unit product cost that would appear on the job cost sheet for this job.

3. Question : (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company’s inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650,000
Conversion $997,500
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory.

4. Question : (TCO F) Burkhammer Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Work in Process Finished Goods Cost of Goods Sold Total
Direct Materials $2,260 $12,180 $81,480 $95,920
Direct Labor $1,900 $14,500 $97,000 $113,400
Manufacturing overhead applied $1,590 $6,890 $44,520 $53,000
Total $5,750 $33,570 $223,000 $262,320
Manufacturing overhead for the month was underapplied by $9,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
Determine the cost of work in process, finished goods, and cost of goods sold AFTER allocation of the underapplied or overapplied overhead for the period.

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ACCT 505 Week 2

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