Question 1

Operation costing is a hybrid type of accounting system that combines features of job-order and process-cost accounting.
Required:
A.Briefly discuss the similarities and differences of an operation-costing system and a job-order cost system.
A.Similarities: Materials are unique to the individual batches or products being produced in both systems.The cost,therefore,is assigned by batch as in job costing.Differences: Processing and the incurrence of conversion costs is the same for each batch in operation costing.In job costing the different batches of product incur different processing steps.
B.Briefly discuss the similarities and differences of an operation-costing system and a process-cost system.
B.Similarities: Batches of products go through essentially the same manufacturing processes in both systems.Conversion costs can be assigned in a manner similar to that used in process-costing systems.Differences: Each batch of product in an operation-costing system uses different direct materials.In a process system,the direct materials are the same.

Accepted Answer

A.Similarities:Materials are unique to t...

Question 2

Professor Jones is concerned that her students do not understand the concept of equivalent units.She has therefore prepared the following questions,to appear on an upcoming examination:
Equivalent units are used in a process-costing accounting system.
A.Equivalent units are needed as a measure of production volume.At the end of the period,manufacturing costs must be spread over the units produced,and it is incorrect to combine fully completed units with those that are still in production (akin to adding apples and oranges).Separate totals are needed because materials are often introduced at specific points in production whereas conversion is often introduced uniformly throughout manufacturing.
A.Explain the need for equivalent units and why separate equivalent-unit totals are calculated for direct materials and conversion cost.
B.If an examination of goods in production at the end of the period revealed 12,000 units that are,on average,75% complete,would it be correct to say that 9,000 units were finished during the period? Why?
Required:
Prepare a complete answer key that can be used in grading the examination questions.
B.No.The units are still in production,so none of them are fully completeD.It would be correct to say that the firm has done the work equivalent to manufacturing 9,000 finished units.

Accepted Answer

A.Equivalent units are needed as a measu...

Question 3

Barnett,Inc. ,which uses a process-costing system,transfers completed production from Department no.1 to Department no.2 for further work.Which of the following best describes the account that would be credited to record this transfer?

Accepted Answer

A)  Cost of Goods Transferred.
B)  Finished-Goods Inventory: Department no.1.
C)  Finished-Goods Inventory: Department no.2.
D)  Work-in-Process Inventory: Department no.1.
E)  Work-in-Process Inventory: Department no.2.F) D) and E)
G) A) and E)

Question 4

The cost of goods completed is:

Accepted Answer

A)  $312,000.
B)  $414,000.
C)  $520,000.
D)  $634,000.
E)  some other amount.F) C) and D)
G) A) and D)

Question 5

The flow of costs through the manufacturing accounts is essentially the same in both process costing and job-order costing.

Accepted Answer

A) True 
 B)False

Question 6

The cost of the company's ending work-in-process inventory is:

Accepted Answer

A)  $26,640.
B)  $44,400.
C)  $56,400.
D)  $74,000.
E)  some other amount.F) D) and E)
G) A) and E) C

Question 7

Equivalent-unit calculations are necessary to allocate manufacturing costs between:

Accepted Answer

A)  units completed and ending work in process.
B)  beginning work in process and units completed.
C)  units sold and ending work in process.
D)  cost of goods manufactured and beginning work in process.
E)  cost of goods manufactured and cost of goods sold.F) C) and E)
G) C) and D)

Question 8

All of the following statements about an operation-costing system are true except:

Accepted Answer

A)  direct material and conversion costs are traced to each batch of product produced.
B)  direct-material cost is traced to each batch produced.
C)  conversion costs are applied to products on a departmental basis using a predetermined application rate.
D)  batches of product pass sequentially through the same processes.
E)  conversion activities are similar across product lines but direct materials differ significantly.F) B) and E)
G) A) and E)

Question 9

Operation costing might be used to determine the cost of all of the following products except:

Accepted Answer

A)  sweaters.
B)  automobiles.
C)  living-room sofas.
D)  dishwashing detergent.
E)  high-definition (H
D)  and surround-sound cables.F) A) and C)
G) None of the above

Question 10

Muhares,which uses a process-costing system,adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing.The following selected information was taken from the company's accounting records:
Total equivalent units of materials: 8,000
Total equivalent units of conversion: 7,400
Units started and completed during the period: 6,500
On the basis of this information,the ending work-in-process inventory's stage of completion is:

Accepted Answer

A)  80%.
B)  70%.
C)  60%.
D)  40%.
E)  some other percentage not listed abovE.F) None of the above
G) A) and B)

Question 11

Which of the following best describes the procedures used in operation costing to assign direct-material and conversion costs to production?

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice D
E)  Choice EF) A) and D)
G) A) and C) B

Question 12

Which of the following is a key document in a typical process-costing system?

Accepted Answer

A)  Departmental production report.
B)  Master schedule.
C)  Production budget.
D)  Sequential product report.
E)  Materials requirement report.F) C) and D)
G) A) and B)

Question 13

Kendra Corporation uses a process-cost accounting system.The company adds direct materials and direct labor at the start of its production process;overhead cost is incurred evenly throughout manufacturing.The firm has no beginning work-in-process inventory;its ending work in process is 40% complete.Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?

Accepted Answer

A)  Materials,100%;labor,100%;overhead cost,40%.
B)  Materials,100%;labor,100%;overhead cost,100%.
C)  Materials,100%;labor 40%;overhead cost,40%.
D)  Materials,40%;labor,40%;overhead cost,60%.
E)  Materials,40%;labor,40%;overhead cost,100%.F) None of the above
G) C) and E)

Question 14

The cost of the ending work in process is:

Accepted Answer

A)  $54,000.
B)  $78,000.
C)  $114,000.
D)  $195,000.
E)  some other amount.F) B) and E)
G) A) and E) C

Question 15

Companies that use a process-cost accounting system would:

Accepted Answer

A)  establish a separate Work-in-Process Inventory account for each manufacturing department.
B)  establish a separate Finished-Goods Inventory account for each manufacturing department.
C)  pass completed production directly to Cost of Goods Sold.
D)  charge goods produced with actual overhead amounts rather than applied overhead amounts.
E)  eliminate the need for the Finished-Goods Inventory account.F) A) and D)
G) All of the above

Question 16

Operation costing tends to parallel job-order costing with respect to the treatment of conversion cost.

Accepted Answer

A) True 
 B)False

Question 17

Operation costing:

Accepted Answer

A)  tends to parallel job-order costing with respect to the treatment of conversion cost.
B)  tends to parallel process costing with respect to the treatment of conversion cost.
C)  tends to parallel process costing with respect to the treatment of direct materials.
D)  would likely be used by a manufacturing plant that produces one model of a single product.
E)  is commonly known as a joint-costing system.F) C) and D)
G) A) and B)

Question 18

Companies that use a process-cost accounting system would establish a separate Work-in-Process Inventory account for each manufacturing department.

Accepted Answer

A) True 
 B)False

Question 19

Yes! Co. ,had 3,000 units of work in process on April 1 that were 60% complete.During April,11,000 units were started and as of April 30,4,000 units that were 40% complete remained in production.How many units were completed during April?

Accepted Answer

A)  10,000.
B)  9,800.
C)  11,000.
D)  12,200.
E)  None of thesE.F) B) and E)
G) A) and B)

Question 20

Which of the following are needed under weighted-average process costing to calculate the cost of goods completed during the period?

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice D
E)  Choice EF) A) and E)
G) A) and D)

Exam 4: Process Costing and Hybrid Product-Costing Systems

Correct Answer
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A.Similarities:Materials are unique to t...
View Answer

Correct Answer
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A.Equivalent units are needed as a measu...
View Answer

Barnett,Inc. ,which uses a process-costing system,transfers completed production from Department no.1 to Department no.2 for further work.Which of the following best describes the account that would be credited to record this transfer?

Correct Answer
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The cost of goods completed is:

Correct Answer
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The flow of costs through the manufacturing accounts is essentially the same in both process costing and job-order costing.

Correct Answer
verified

The cost of the company's ending work-in-process inventory is:

Correct Answer
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C

Equivalent-unit calculations are necessary to allocate manufacturing costs between:

Correct Answer
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All of the following statements about an operation-costing system are true except:

Correct Answer
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Operation costing might be used to determine the cost of all of the following products except:

Correct Answer
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Correct Answer
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Which of the following best describes the procedures used in operation costing to assign direct-material and conversion costs to production?

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B

Which of the following is a key document in a typical process-costing system?

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The cost of the ending work in process is:

Correct Answer
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C

Companies that use a process-cost accounting system would:

Correct Answer
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Operation costing tends to parallel job-order costing with respect to the treatment of conversion cost.

Correct Answer
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Operation costing:

Correct Answer
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Companies that use a process-cost accounting system would establish a separate Work-in-Process Inventory account for each manufacturing department.

Correct Answer
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Yes! Co. ,had 3,000 units of work in process on April 1 that were 60% complete.During April,11,000 units were started and as of April 30,4,000 units that were 40% complete remained in production.How many units were completed during April?

Correct Answer
verified

Which of the following are needed under weighted-average process costing to calculate the cost of goods completed during the period?

Correct Answer
verified

Exam 4: Process Costing and Hybrid Product-Costing Systems

Correct AnswerverifiedA.Similarities:Materials are unique to t...View AnswerShow Answer

Correct AnswerverifiedA.Equivalent units are needed as a measu...View AnswerShow Answer

Barnett,Inc. ,which uses a process-costing system,transfers completed production from Department no.1 to Department no.2 for further work.Which of the following best describes the account that would be credited to record this transfer?

Correct AnswerverifiedShow Answer

The cost of goods completed is:

Correct AnswerverifiedShow Answer

The flow of costs through the manufacturing accounts is essentially the same in both process costing and job-order costing.

Correct AnswerverifiedShow Answer

The cost of the company's ending work-in-process inventory is:

Correct AnswerverifiedC

Equivalent-unit calculations are necessary to allocate manufacturing costs between:

Correct AnswerverifiedShow Answer

All of the following statements about an operation-costing system are true except:

Correct AnswerverifiedShow Answer

Operation costing might be used to determine the cost of all of the following products except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following best describes the procedures used in operation costing to assign direct-material and conversion costs to production?

Correct AnswerverifiedB

Which of the following is a key document in a typical process-costing system?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The cost of the ending work in process is:

Correct AnswerverifiedC

Companies that use a process-cost accounting system would:

Correct AnswerverifiedShow Answer

Operation costing tends to parallel job-order costing with respect to the treatment of conversion cost.

Correct AnswerverifiedShow Answer

Operation costing:

Correct AnswerverifiedShow Answer

Companies that use a process-cost accounting system would establish a separate Work-in-Process Inventory account for each manufacturing department.

Correct AnswerverifiedShow Answer

Yes! Co. ,had 3,000 units of work in process on April 1 that were 60% complete.During April,11,000 units were started and as of April 30,4,000 units that were 40% complete remained in production.How many units were completed during April?

Correct AnswerverifiedShow Answer

Which of the following are needed under weighted-average process costing to calculate the cost of goods completed during the period?

Correct AnswerverifiedShow Answer

Correct Answer
verified
A.Similarities:Materials are unique to t...
View Answer

Correct Answer
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A.Equivalent units are needed as a measu...
View Answer

Correct Answer
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C

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B

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C

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