After posting all actual factory overhead and applying factory overhead to production departments in a process costing system:
answer
There may be over or underapplied overhead.
question
During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. Beginning goods in process inventory overhead costs were $6,000. If the weighted-average method is used and $14,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory?
answer
$2,143
EU = 50,000 + (10,000 x .6) = 56,000
EU in ending inventory = (10,000 x .6) = 6,000
Overhead allocated to ending inventory: (6,000/56,000) x ($14,000 + 6,000) = $2,143
question
Direct labor and indirect labor are recorded, respectively, to:
answer
Goods in Process and Factory Overhead.
question
A department had 65 units which were 20% complete in beginning Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?
answer
83
77 + (30 x .2) = 83
question
A department had 12,500 units that were 20% complete in beginning Goods in Process Inventory. During the current period 60,000 units were transferred in. Ending Goods in Process Inventory was 15,000 units that were 70% complete. Assume this company uses the weighted-average method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced with respect to direct material?
answer
68,000
Units Completed and Transferred Out = Beginning Inventory + Units Transferred In - Ending Inventory.
Units Completed and Transferred Out = 12,500 + 60,000 - 15,000 = 57,500
Equivalent Units = 57,500 + (15,000)(.7) = 68,000
question
Which of the following five types of products is least likely to be produced in a process manufacturing system?
Oil paintings.
Calculators.
Slacks for casual wear.
Compact disks.
Baseball hats.
answer
Oil paintings.
question
An expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period is called:
answer
Equivalent units of production.
question
A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:
answer
Process cost accounting system.
question
The purchase of raw materials on account in a process costing system is recorded with a:
answer
Debit to Raw Materials Inventory and a credit to Accounts Payable.
question
The Filtering Department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: direct materials, $77,000; direct labor, $44,000; and factory overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 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 Filtering Department is:
