GCU ACC650 2019 October Week 2 Quiz Latest

ACC650 Managerial Accounting

Week 2 Quiz

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

•units completed and ending work in process.

•beginning work in process and units completed.

•units sold and ending work in process.

•cost of goods manufactured and beginning work in process.

•cost of goods manufactured and cost of goods sold.

•Which of the following is true concerning cost drivers for the predetermined overhead rate in a process-costing system?

•Predetermined overhead rates are not used in a process-costing system.

•If direct material cost is the cost driver, direct labor and direct materials may be combined into the single element of prime cost.

•If direct labor hours is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

•If direct labor cost is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

•Cost drivers are irrelevant in process-costing systems.

•Process costing would likely be used in all of the following industries except:

•petroleum refining.

•chemicals.

•truck tire manufacturing.

•wood pulp production.

•automobile repair.

•Corrigan, Inc. overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory. What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured, respectively?

•Overstated, overstated.

•Overstated, understated.

•Overstated, none.

•None, overstated.

•None, none.

•Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes:

•a debit to Cost of Goods Sold for $432,000.

•a debit to Finished-Goods Inventory for $432,000.

•a debit to Work-in-Process Inventory for $432,000.

•a debit to Finished-Goods Inventory for $86,000.

•a credit to Work-in-Process Inventory for $86,000.

•Oxford, Inc., which uses a process-cost accounting system, began operations on January 1 of the current year. The company incurs conversion cost evenly throughout manufacturing. If Oxford started work on 3,000 units during the period and these units were 70% of the way through manufacturing, it would be correct to say that the company has:

•3,000 physical units in production.

•2,100 completed units.

•900 in-process units.

•900 equivalent units of production.

• 3,000 equivalent units of production.

• Harrington Industries, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Harrington should make a journal entry on December 31 that includes:

•a debit to Cost of Goods Sold for $432,000.

•a credit to Finished-Goods Inventory for $432,000.

•a credit to Work-in-Process Inventory for $432,000.

•a debit to Finished-Goods Inventory for $86,000.

•a credit to Work-in-Process Inventory for $86,000.

•Bratton Corporation had 6,500 units of work in process on April 1. During April, 19,100 units were completed and as of April 30, 5,100 units remained in production. How many units were started during April?

•11,600.

•17,700.

•20,500.

• 30,700.

•None of the answers is correct.

• Mulligan, Inc., which uses a process-cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:

•a debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.

•a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.

•a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.

•a debit to Work-in-Process Inventory: Department A and a credit to Work-in-Process Inventory: Department B.

•a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

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

•direct material and conversion costs are traced to each batch of product produced.

•direct-material cost is traced to each batch produced.

•conversion costs are applied to products on a departmental basis using a predetermined application rate.

•batches of product pass sequentially through the same processes.

•conversion activities are similar across product lines but direct materials differ significantly.

•When calculating unit costs under the weighted-average process-costing method, the unit cost is based on:

•only the current period's manufacturing costs.

•only costs in the period's beginning work-in-process inventory.

•a summation of the costs in the beginning work-in-process inventory plus costs incurred in the current period.

•only costs incurred in previous accounting periods.

•a summation of the costs in the beginning work-in-process inventory plus costs to be incurred in the upcoming period.

•Forte 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?

•10,000.

• 9,800.

•11,000.

•12,200.

•None of the answers is correct.

•Gulliver, 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 debited to record this transfer?

•Cost of Goods Transferred.

•Finished-Goods Inventory: Department no. 1.

•Finished-Goods Inventory: Department no. 2.

•Work-in-Process Inventory: Department no. 1.

•Work-in-Process Inventory: Department no. 2.

•Which of the following data are needed to calculate total equivalent units under the weighted-average method?

•Work-to-date on ending work in process, units started during the period.

•Units completed during the period, work-to-date on ending work in process.

•Work to complete beginning work in process, work-to-date on ending work in process.

•Work to complete beginning work in process, units completed, and work done on ending work in process.

•Units completed, work to complete beginning work in process.

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

•Departmental production report.

•Master schedule.

•Production budget.

•Sequential product report.

•Materials requirement report.

•In a process-costing system, manufacturing costs are accumulated by:

•batch.

•batch and time period.

•department, only.

•department and time period, only.

•department or process, and time period.

•When computing the conversion cost per equivalent unit under the weighted-average method of process costing, all of the following information would be needed except:

•the number of units completed during the current accounting period.

•the conversion work performed during the current period on the ending work-in-process inventory.

•the conversion work performed during the current period on the beginning work-in-process inventory.

•the conversion cost in the beginning work-in-process inventory.

•the conversion cost incurred during the current accounting period.

•Process costing is used to account for:

•large numbers of identical products that are produced in a continuous manufacturing environment.

•small numbers of products that are produced in batches.

•raw materials that are converted directly to finished goods.

•finished goods that are refined and processed further.

•large numbers of products that are produced in a non-repetitive process.

•Unit costs in a process-costing system are derived by using:

•in-process units.

•completed units.

•physical units.

•equivalent units.

•a measure of activity other than those listed above.

•Breight, 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?

•Cost of Goods Transferred.

•Finished-Goods Inventory: Department no. 1.

•Finished-Goods Inventory: Department no. 2.

•Work-in-Process Inventory: Department no. 1.

•Work-in-Process Inventory: Department no. 2.