Question : 17.2   Contrast the journal entries for a process-costing system when : 1186093

 

17.2   Contrast the journal entries for a process-costing system when there is and when there is not ending work-in-process inventory using the weighted-average method of inventory valuation.

 

1) Production costs are divided into three classifications: administrative costs, direct materials, and conversion costs in process costing.

 

2) Process-costing journal entries and job-costing journal entries are similar with respect to direct materials and conversion costs.

 

3) The accounting (for a bakery) entry to record the transfer of rolls from the mixing department to the baking department is:

 

Work in Process-Mixing Department

Work in Process-Baking Department

 

 

4) Process-costing journal entries and job-costing journal entries are similar except for the multiple work-in-process accounts in the job-costing system.

 

5) A key feature in process costing is that

A) total costs are divided by total equivalent units.

B) total units are multiplied by total costs.

C) (total costs times percentage allocated to each unit) are divided by total units.

D) (total units multiplied by the percentage allocated to each unit) is multiplied by total costs.

E) total units are multiplied by individual costs.

6) When a bakery transfers goods from the Baking Department to the Decorating Department, the accounting entry is:

A)

Work in Process — Baking Department

Work in Process — Decorating Department

 

B)

Work in Process — Decorating Department

Accounts Payable

 

C)

Work in Process — Decorating Department

Work in Process-Baking Department

 

D)

Work in Process — Baking Department

Accounts Payable

 

E)

Finished Goods – Decorating Department

Work in Process-Baking Department

 

 

7) Excalibur Ltd. began operations on October 1 of the current year. Its production requires that direct materials are added at the beginning of the process and conversion costs are incurred uniformly. Direct materials costs for October were $380,000 and conversion costs were $1,750,000. There were 80,000 units started during the month. The ending inventory was 25,000 units which were 60% complete. The cost per equivalent unit for direct materials was:

A) $4.75

B) $15.20

C) $5.85

D) $5.43

E) $7.92

8) Excalibur Ltd. began operations on October 1 of the current year. Its production requires that direct materials are added at the beginning of the process and conversion costs are incurred uniformly. Direct materials costs for October were $380,000 and conversion costs were $1,750,000. There were 80,000 units started during the month. The ending inventory was 25,000 units which were 60% complete. The cost per equivalent unit for conversion was:

A) $25.00

B) $21.88

C) $70.00

D) $116.67

E) $16.67

Use the information below to answer the following question(s).

 

Father Time Clock Shop manufactures clocks on an automated assembly line. It utilizes two cost categories: direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.

 

Data for the Assembly Department are:

 

Work in process, beginning inventory

250 units

Direct materials (100% complete)

 

Conversion costs (50% complete)

 

 

 

Units started during June

800 units

Work in process, ending inventory

150 units

Direct materials (100% complete)

 

Conversion costs (75% complete)

 

 

 

Work in process, beginning inventory

 

Direct materials

$180,000

Conversion costs

$270,000

Direct materials costs added during June

$1,000,000

Conversion costs added during June

$1,000,000

 

9) Which of the following entries would be made to record the issue of direct materials in the Testing Department, under process-costing?

A) debit to Testing Department assets

B) debit to Testing Department Materials Inventory

C) debit to Work in Process – Testing Department

D) credit to Direct Materials

E) credit to Work in Process – Testing Department