acc 205 quiz 2
1. Question : (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?
Student Answer: A steel factory that processes iron ore into steel bars
A factory that processes sugar and other ingredients into black licorice
A costume maker that makes specialty costumes for figure skaters
All of these
2. Question : (TCO F) Process costing would be appropriate for each of the following except:
Student Answer: custom furniture manufacturing.
Instructor Explanation: Chapter 4
3. Question : (TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company's processing departments for a recent month:
Beginning work in process
Started during the month
Ending work in process
All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:
Student Answer: $0.86
4. Question : (TCO F) Which of the following accounts is debited when direct labor is recorded?
Student Answer: Work in process
Salaries and wages expense
Salaries and wages payable
5. Question : (TCO F) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a:
Student Answer: debit to Raw Materials of $74,000.
debit to Work in Process of $68,000.
credit to Manufacturing Overhead of $6,000.
debit to Work in Process of $74,000.
Instructor Explanation: Chapter 3
6. Question : (TCO F) Wedd Corporation had $35,000 of raw materials on hand on May 1. During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total:
Student Answer: $92,000.
Instructor Explanation: Chapter 3
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1. Question : (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:
i. Custom boat builder
ii. Frozen cranberry juice processor
iii. Concrete block manufacturer
iv. Winery that produces a number of varietal wines
v. Aluminum refiner that makes aluminum ingots from bauxite ore
For each company, indicate whether the company is most likely to use job-order costing or process costing.
2. Question : (TCO F) Job 728 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $81,000
Direct labor hours 1,220 labor hours
Direct labor wage rate $15 per labor-hour
Machine Hours1,520 machine hours
Number of units completed 4,400 units
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $16 per machine-hour.
Compute the unit product cost that would appear on the job cost sheet for this job.
3. Question : (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000$100,000 $157,500
Units started into production 500,000
Costs added during the year:
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory.
4. Question : (TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $28,000$29,000
Work In process $16,000$14,000
Finished goods $42,000$54,000
Raw material purchases $56,000
Direct labor costs $87,000
Manufacturing overhead cost incurred $51,000
Indirect materials included in manufacturing overhead costs incurred $3,000
Manufacturing overhead cost applied to work in process $55,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
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