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Exam 3: Process Costing and Analysis

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Question 31

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Prepare the required general journal entry to record the following transactions for the Flaherty Company. (a.)Incurred $95,000 of factory labor cost which is paid in cash. (b.)Used $42,000 of direct labor in the grinding department, and $36,000 of direct labor in the sifting department. (c.)Used $17,000 of indirect labor.

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Question 32

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A hybrid costing system would be most appropriate when:

A) A manufacturer is able to standardize processes while at the same time attempting to cater to individual customer needs.
B) Large quantities of identical products are being produced.
C) The volume of production is low and costs are high.
D) There is no standardization of units of production.
E) The volume of production is low and standardized products are produced.

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Question 33

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In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

In process cost accounting, the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

The last step in the four-step accounting procedure for process costing is the calculation of equivalent units of production.

In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

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:

In some circumstances, a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

What total cost should be assigned to the units that were in process at the end of August?

The weighted-average method of process costing computes the cost per equivalent unit based solely on the current period's EUPs and costs.

Which of the following is not one of the four steps in accounting for production activity in a period?

A unique feature of process costing systems is the use of a single Goods in Process Inventory control account.

An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:

The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, which reconciles _____________________ with the _____________________.

Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

A company's January 1 goods in process inventory contained 30,000 units that were one-fourth complete with respect to direct labor.The beginning inventory was completed this year and another 120,000 units were started.Of those started, 80,000 were finished and the remaining 40,000 were left one-fifth complete.Using FIFO, calculate the equivalent units of production for the year.

Which of the following pair of journal entries correctly records the current month's activity where the company had $42,060 in total factory labor costs that were paid in cash with $32,400 of this total for direct labor?

Match the following terms 1 to 7 with the definitions (a)through (g).

Refer to the following information about the Painting Department in the Richardson Factory for the month of June: -If FIFO has been used, how many equivalent units of materials were added to all units processed during June? How many equivalent units of labor and overhead were added to all units processed during June?

If Department J uses $40,000 of direct materials and Department K uses $70,000 of direct materials, the following journal entry would be recorded by the process cost accounting system: