LO 5.1Which of the following production characteristics is better suited for process costing and not job order costing?
- Each product batch is distinguishable from the prior batch.
- The costs are easily traced to a specific product.
- Costs are accumulated by department.
- The value of work in process is the direct material used, the direct labor incurred, and the overhead applied to the job in process.
LO 5.1A process costing system is most likely used by which of the following?
- airplane manufacturing
- a paper manufacturing company
- an accounting firm specializing in tax returns
- a hospital
LO 5.1Which of the following is a conversion cost?
- raw materials
- direct labor
- sales commissions
- direct material used
LO 5.2Which is not needed to compute equivalent units of production?
- the percentage of completion for inventory still in process
- the number of units transferred out
- the number of units started and completed
- the material cost per unit
LO 5.2What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000?
LO 5.2Which of the following lists contains only conversion costs for an inflatable raft manufacturing corporation?
- vinyl for raft, machine operator, electricity, insurance
- machine operator, electricity, depreciation, plastic for air valves
- machine operator, electricity, depreciation, insurance
- vinyl for raft, electricity, insurance, plastic for air valves
LO 5.3Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1,000 units were in ending inventory?
LO 5.3The initial processing department had a beginning inventory of 750 units and an ending inventory of 1,350 units, and it started 9,500 units into production. How many were transferred out to the next department?
LO 5.4The costs to be accounted for consist of which of the following?
- costs of the units added during the period
- costs of the units in ending inventory
- costs of the units started and transferred during the period
- costs of the units in the beginning inventory and costs added during the period
LO 5.4Which of the following is the step in which materials, labor, and overhead are detailed?
- determining the units to which costs are assigned
- determining the equivalent units of production
- determining the cost per equivalent units
- allocating the costs to the units transferred out and the units partially completed
LO 5.5The journal entry to record the $500 of work in process ending inventory that consists of $300 of direct materials, $50 of manufacturing overhead, and $150 of direct labor is which of the following?
LO 5.5In a process costing system, which account shows the overhead assigned to the department?
- cost of goods sold
- finished goods inventory
- raw material inventory
- work in process inventory