College Acct 2- Chapter 5

Which of the following journal entries would be used to record direct labor costs in a company having two processing departments (Department 1 and Department 2)?

• Debit Work in Process; Credit Salaries & Wages Payable

• Debit WIP- Department 1; Debit WIP- Department 2; Credit Salaries & Wages Payable

• Debit Salaries & Wages Payable; Credit Work in Process

• Debit Salaries & Wages Expense; Credit Salaries & Wages Payable

In process costing, a separate work in process account is kept for each:

• processing department.

• cost category (i.e., materials, conversion cost).

• equivalent unit.

• individual order.

XYZ Inc. uses the weighted-average method in its process costing system. The Assembly Department is the second department in its production process. The data below summarize the department’s operations in March.

The Assembly Department’s cost per equivalent unit for conversion cost for March was $3.75. How much conversion cost was assigned to the units transferred out of the Assembly Department during March?

• $375,573.00

• $328,012.40

• $208,125.00

• $353,410.00

ABC Toy Corporation manufactures lizard dolls in two departments, Molding and Assembly. In the Molding Department, plastic is injected into a lizard-shaped mold. The dolls that come out of the molds are then transferred to the Assembly Department where hair is applied. ABC uses a weighted-average process cost system to collect costs in both departments.

On February 1, the Molding Department had 5,000 dolls in process. These dolls were 100% complete with respect to direct materials and 60% complete with respect to conversion cost. During February, Molding completed 85,000 dolls. On February 28, Molding had 6,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 30% complete with respect to conversion cost.

What account would ABC debit to record the transfer of dolls out of the Assembly Department?

• Finished Goods

• Manufacturing Overhead

• Work in Process -- Molding

• Work in Process -- Assembly

When computing the cost per equivalent unit, the weighted-average method of process costing considers:

• costs incurred during the current period only.

• costs incurred during the current period plus cost of ending work in process inventory.

• costs incurred during the current period plus cost of beginning work in process inventory.

• costs incurred during the current period less cost of beginning work in process inventory.

Xavier Beverage Co. uses a process costing system to collect costs related to the production of its chocolate flavored cola. The cola is first processed in a Mixing Department and is then transferred out and finished up in the Bottling Department. The finished cases of cola are then transferred to Finished Goods Inventory. The following information relates to the company’s two departments for the month of November.

How many cases of cola were completed and transferred to Finished Goods Inventory during November?

• 70,000

• 77,000

• 63,000

• 58,000

The Southwestern Corporation uses the weighted-average method in its process costing system. The company has only a single processing department. The company's ending work in process inventory on May 31 consisted of 18,000 units. The units in the ending work in process inventory were 100% complete with respect to materials and 60% complete with respect to labor and overhead. If the cost per equivalent unit for May was $3.25 for materials and $5.00 for labor and overhead, the total cost assigned to the ending work in process inventory was:

• $75,600

• $112,500

• $54,000

• $58,500

Darren Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $12,500. An additional 72,000 units were started into production during the month. There were 12,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $836,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

• $9.963

• $9.608

• $8.286

• $9.000

In which scenario is a process costing system most appropriate?

• When multiple distinct products or jobs are produced each period.

• When a single, uniform product is manufactured continuously through the production process.

• When services are provided, such as in a consulting firm.

• When the variable costing method is used.

In the cost reconciliation report under the weighted-average method, the "Total cost accounted for" equals:

• Cost of beginning work in process inventory + Cost of units transferred in

• Cost of ending work in process inventory + Cost added to production during the period

• Cost of beginning work in process inventory + Cost of units transferred out

• Cost of ending work in process inventory + Cost of units transferred out