Business 1B Sec ON 1 Week 3 Quiz

Business 1B Sec ON 1 Week 3 Quiz| chatbot las positas  community college

Question 1

Hybrid costing systems can only be applied to manufacturing.

·         True ,

·         False

 

Question 2

The FIFO method computes equivalent units and cost per equivalent unit based only on production activity in the current period.

·         True 

·         False

 

Question 3

In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

·         True ,

·         False

 

Question 4

The Finishing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry:

 

Account Title      Debit     Credit

Finished Goods Inventory            74,000  

Work in Process Inventory—Finishing                   74,000

Group starts True or False

·         True

·         False

 

Question 5

A candy manufacturer completed and sold 84,000 units at a price of $2.50 per unit in July. If the cost to produce one unit of candy during July is $1.75, then total gross profit on candy sales in April equals $63,000.

·         True ,

·         False

 

Question 6

During the current month, a company’s packaging department transferred 100,000 units and $350,000 of production costs to finished goods. This means the cost to produce one unit during the current month is $3.50.

·         True ,

·         False

 

Question 7

A company incurred $50,000 of indirect labor costs in production. The journal entry to record this production activity includes a credit to Factory Overhead for $50,000.

·         True

·         False

 

Question 8

Companies use predetermined overhead rates to apply overhead and can use different rates for different departments.

·         True

·         False

 

Question 9

A production cost report for a production department using the weighted-average method accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

·         True

·         False

 

Question 10

Equivalent units of production are always the same as the total number of physical units finished during the period.

·         True

·         False

 

Question 11

If the predetermined overhead allocation rate is 245% of direct labor cost, and the Baking Department's direct labor cost for the reporting period is $10,000, the following entry would be made to record the allocation of overhead to the products processed in this department:

 

Account Title      Debit     credit

Work in Process Inventory—Baking         24,500  

Factory Overhead                           24,500

Group starts True or False

·         True 

·         False

 

Question 12

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding department:

 

 

                Units     Direct materials Percent Complete          Conversion Percent Complete

Beginning work in process inventory       25,000   100%     55%

Units started and completed      110,000                 

Units completed and transferred out     135,000                 

Ending work in process inventory             30,000   100%     30%

 

Production cost information for the Molding department follows.

 

Beginning work in process                           

Direct materials                $ 43,000               

Conversion         48,850   $ 91,850

Costs added this period                                

Direct materials                $ 287,000            

Conversion         599,150 $ 886,150

 

Calculate the equivalent units of production for direct materials.

                 

·         144,000

·         165,000

·         110,000

·         130,250

·         Item 13

 

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing department:

 

Equivalent units of production—direct materials               110,000 EUP

Equivalent units of production—conversion        95,000   EUP

Costs in beginning Work in Process—direct materials      $ 49,100               

Costs in beginning Work in Process—conversion               $ 36,000               

Costs incurred in February—direct materials       $ 414,000            

Costs incurred in February—conversion                $ 519,750            

 

The cost per equivalent unit of production for direct materials is:

                 

·         $4.97    

·         $4.21

·         $5.85

·         $9.26  

·         $5.05

 

 

 

Question 13

Dazzle, Incorporated produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record overhead applied during June is:

 

Direct materials used     $ 87,000

Direct labor used              160,000

Predetermined overhead rate (based on direct labor)    155%

Goods transferred to finished goods      432,000

Cost of goods sold           444,000

Credit sales         810,000

·         Debit Work in Process Inventory $160,000; credit Cash $160,000.              

·         Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.    

·         Debit Factory Overhead $248,000; credit Cash $248,000.               

·         Debit Work in Process Inventory $160,000; credit Factory Wages $160,000.          

·         Debit Work in Process Inventory $160,000; credit Factory Overhead $160,000.

 

Question 15

An ice cream manufacturer makes ice cream in two processes, Mixing and Packaging. During April, its first month of business, the Packaging department transferred 200,000 units and $700,000 of production costs to finished goods. What is the cost to produce one unit of ice cream during April?

·         $3.80.

·         $3.90.

·         $3.70.

·         $3.60.

·         $3.50.

Question 16

·         In a process costing system, direct material costs incurred are recorded:              

·         Indirectly to a Work in Process Inventory account from Factory Overhead.          

·         Directly to a Finished Goods Inventory account.               

·         Directly to a Work in Process Inventory account.              

·         Directly to a Cost of Goods Sold account.             

·         Indirectly to a Finished Goods Inventory account from Factory Overhead.

 

Question 17

A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 100% complete for materials and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and conversion $5.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period.            

·         $132,000.            

·         $93,775.              

·         $87,725.              

·         $146,575.

·         $176,000.

 

Question 18

A company that applies process costing is most frequently characterized by:      

·         Repetitive production and low production volume.         

·         Low standardization and high production volume.

·         Repetitive production and unique products.

·         Custom orders and mass production.

·         Similar products and high production volume.

 

Question 19

Compute the direct materials cost per equivalent unit for the Production department using the weighted-average method.

 

                Units     Direct Materials Percent Complete          Conversion Percent Complete

Beginning work in process inventory       25,000   100%     55%

Units started and completed      110,000                 

Units completed and transferred out     135,000                 

Ending work in process inventory             30,000   100%     30%

 

Production cost information for the Production department follows.

 

Beginning work in process                           

Direct materials                $ 93,500               

Conversion         107,000 $ 200,500

Costs added this period                                

Direct materials                $ 253,000            

Conversion         329,000 $ 582,000            

·         $2.40.   

·         $2.57.   

·         $2.48.   

·         $2.10.   

·         $1.53.

 

Question 20

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating department:

 

 

                Units     Direct materials Percent Complete          Conversion Percent Complete

Beginning work in process inventory       80,000   60%        20%

Units started and completed      250,000                 

Units completed and transferred out     330,000                 

Ending work in process inventory             30,000   40%        10%

 

 

Production cost information for the Fabricating department follows.

 

 

Beginning work in process                           

Direct materials                $ 98,760               

Conversion         79,700   $ 178,460

Costs added this period                                

Direct materials                $ 646,800            

Conversion         919,300 1,566,100

 

Calculate the cost per equivalent unit for direct materials.             

·         $2.33    

·         $2.18    

·         $1.89    

·         $2.20    

·         $2.59

 

Question 21

A company uses the FIFO method for inventory costing. At the beginning of a period it reported the following data:

 

                Units     Conversion Percent Complete

Beginning work in process           20,000   40%

Units started this period               167,000

Units completed and transferred out     165,000

Ending work in process  22,000   75%

 

Compute the department’s number of equivalent units of production for conversion.

 

 

·         187,000.              

·         173,500.              

·         181,500.              

·         165,000.              

·         145,000.

 

Question 22

A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.               

·         6,500 units.        

·         5,500 units.        

·         10,500 units.      

·         13,000 units.      

·         9,000 units.

 

Question 23

Prepare a physical unit flow reconciliation with the following information.

 

Blending Process              Units of Product

Beginning work in process inventory       160,000

Units started this period               335,000

Units completed and transferred out     365,000

Ending work in process inventory             130,000

 

Physical unit flow reconciliation

Units to account for:                       Units accounted for:      

Beginning work in processselected answer correct           160,000selected answer correct                Completed and transferred outselected answer correct        365,000selected answer correct

Units started this periodselected answer correct              335,000selected answer correct                Ending work in processselected answer correct                130,000selected answer correct

not attempted  495,000 not attempted  495,000

               

 

Question 24

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A process manufacturer reports the following:

 

                Units     Conversion

                                Percent Complete

Beginning work in process inventory       194,000 85%

Units started this period               420,000

Units completed and transferred out     450,000

Ending work in process inventory             164,000 35%

Compute the total equivalent units of production for conversion. The company uses the weighted average method.

Equivalent units of production: Weighted average method

                Units     Conversion

                                Percent Complete           EUP

Completed and transferred outselected answer correct                450,000selected answer correct                100%selected answer correct  450,000selected answer correct

Ending work in processselected answer correct 164,000selected answer correct                100%selected answer incorrect                164,000selected answer incorrect

Total      614,000                 614,000

 

*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

 

Item 25

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Carlberg Company has two manufacturing departments, Assembly and Painting. The Assembly department started 12,000 units during November. The following production activity in both units and costs refers to the Assembly department’s November activities.

 

Assembly Department  Units     Percent Complete for Direct Materials   Percent Complete for Conversion

Beginning work in process inventory       3,000     60%        40%

Units started this period               12,000                   

Units completed and transferred out     10,000                   

Ending work in process inventory             5,000     85%        35%