Chapter 3 Process Cost Systems Test Prep

8 May 2023
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question
Which of the following most likely uses a process cost system? Purse manufacturer Oil refinery Automobile manufacturer Guitar manufacturer
answer
Oil refinery
question
Process and job order cost systems are similar in that each system records and summarizes product costs. classifies product costs as direct materials, direct labor, and factory overhead. allocates factory overhead costs to products. All of these choices are correct.
answer
All of these choices are correct.
question
The first step in preparing a cost of production report is to compute equivalent units of production. determine the units to be assigned costs. determine the cost per equivalent unit. allocate costs to units transferred out and partially completed units.
answer
determine the units to be assigned costs.
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The last step in preparing a cost of production report is to compute equivalent units of production. determine the units to be assigned costs. determine the cost per equivalent unit. allocate costs to units transferred out and partially completed units.
answer
allocate costs to units transferred out and partially completed units.
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The inventory cost method that most closely resembles the physical flow of inventory units is FIFO. LIFO. specific identification. average cost.
answer
FIFO
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The number of units in production during a period, whether completed or not, are known as partial units. whole units. equivalent units of production. None of these choices are correct.
answer
whole units.
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The journal entry to recognize depreciation on machinery would include a debit to Factory Overhead. debit to Accumulated Depreciation. credit to Factory Overhead. None of these choices are correct.
answer
debit to Factory Overhead.
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The journal entry to record the transfer from work in process to finished goods would include a debit to Work in Process. Finished Goods. Cost of Goods Sold. None of these choices are correct.
answer
Finished Goods.
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The quantity of the material output divided by the quantity of the material input gives you the yield. direct materials cost per equivalent unit. average cost per unit. None of these choices are correct.
answer
yield
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Compute the yield as a percentage rounded to two digits after the decimal, assuming 110 pounds of tea entered the Packaging Department and 103 pounds of tea were packaged. 1.07% 93.64% 6.36% None of these choices are correct.
answer
93.64%
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A management approach that focuses on reducing time and cost and eliminating poor quality is known as employee management. near-zero defects management. just-in-time processing. Kanban processing.
answer
just-in-time processing.
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In a just-in-time system, processing functions are combined into work centers, sometimes called assembly lines. departments. manufacturing cells. None of these choices are correct.
answer
manufacturing cells.
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For which of the following businesses would a process cost system be appropriate? a. custom furniture manufacturer b. beverage producer c. auto repair service d. specialty printer
answer
b. beverage producer
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Conversion costs are comprised of a. direct labor and direct materials. b. direct labor and factory overhead. c. direct labor and selling expenses. d. factory overhead and direct materials.
answer
b. direct labor and factory overhead.
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In a process cost system, the amount of work in process inventory at the end of a period is valued by a. All of these choices are correct. b. summing the costs remaining in each department account at the end of the period. c. summing all actual costs that flowed through the department from the beginning to the end of the period. d. summing estimated costs budgeted for the inventory during the period.
answer
b. summing the costs remaining in each department account at the end of the period.
question
In the manufacture of 10,000 units of a product, direct materials cost incurred was $135,700, direct labor cost incurred was $82,000, and applied factory overhead was $37,500. What is the total conversion cost? a. $82,000 b. $119,500 c. $135,700 d. $255,200
answer
b. $119,500
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Department Z had no work in process at the beginning of the period, 18,000 units were started during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (assuming the company uses FIFO): Direct materials $80,100 Direct labor 102,300 Factory overhead 37,140 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the units completed during the period? a. $205,600 b. $213,310 c. $134,400 d. $80,100
answer
a. $205,600
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The following production data were taken from the records of the Finishing Department for July: Inventory in process, June 1, 30% completed 5,000 units Transferred to finished goods during June 39,500 units Ending work in process during June 25%, completed 4,500 units Determine the total equivalent units for conversion costs, assuming that the first-in, first-out method is used to cost inventories. Assume that all direct materials are placed in process at the beginning of production. a. 39,000 units b. 39,125 units c. 44,000 units d. 39,500 units
answer
b. 39,125 units
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Equivalent units of production are a. All of these choices are correct. b. the number of units in production during a period, whether completed or not. c. the portion of whole units that are completed with respect to materials or conversion costs. d. the portion of whole units that are completed with respect to materials or selling costs.
answer
c. the portion of whole units that are completed with respect to materials or conversion costs.
question
Guardino Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000 respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000 respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000 and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for factory overhead is a. Work in Processā€”Department 1 150,000 Factory Overheadā€”Department 1 150,000 b. Work in Processā€”Department 1 125,000 Wages Payable 125,000 c. Factory Overheadā€”Department 1 150,000 Work in Processā€”Department 1 150,000 d. Work in Processā€”Department 1 70,000 Factory Overheadā€”Department 1 70,000
answer
a. Work in Processā€”Department 1 150,000 Factory Overheadā€”Department 1 150,000
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When materials are requisitioned and transferred in, all of the following accounts may be included on the journal entry except a. Materials. b. Work in Process. c. Factory Overhead. d. Finished Goods.
answer
d. Finished Goods.
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Which of the following measures would not help managers to control and improve operations? a. cost trends of a product b. marketing plan c. units produced per time period d. yield trends
answer
b. marketing plan
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Which of the following is not a use of the cost of production report? a. to help managers to improve operations b. to help managers isolate problems c. to help managers control operations d. to project production
answer
d. to project production
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Which of the following measures would not help managers to control and improve operations? a. commissions paid per time period b. cost changes for specific products c. unit production d. product yields
answer
a. commissions paid per time period
question
Conversion cost per equivalent unit is a. total conversion costs for the period divided by total equivalent units of direct materials cost for the period. b. total conversion costs for the period divided by total equivalent units of conversion costs for the period. c. total equivalent units of conversion costs for the period divided by total conversion costs for the period. d. total direct materials cost for the period divided by total equivalent units of conversion costs for the period.
answer
b. total conversion costs for the period divided by total equivalent units of conversion costs for the period.
question
In a just-in-time system a. workers typically identify better with the end product because of performing a single function. b. a worker is viewed as an expert in one function only. c. a worker typically performs only one function. d. workers typically identify better with the end product because of performing several functions.
answer
d. workers typically identify better with the end product because of performing several functions.
question
According to the just-in-time philosophy a. the product is "pushed through" the system in order to increase inventory. b. employees should be expert at one function rather than be cross-trained for multiple functions. c. finished goods should always be available in case a customer wants something. d. employees should be cross-trained for multiple functions.
answer
d. employees should be cross-trained for multiple functions.
question
Just-in-time operations attempt to significantly a. increase the push through effect of inventory management. b. increase inventory and simplify operations. c. eliminate waste and simplify operations. d. increase inspection time and moving time.
answer
c. eliminate waste and simplify operations.