Objective 17.5
1) In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under ________.
A) standard costing
B) FIFO costing
C) weighted-average costing
D) operations costing
2) Which of the following best describes transferred-in costs in process costing?
A) These costs are incurred in previous departments that are carried forward to subsequent departments.
B) These costs are transferred in to the company by an external vendor.
C) These costs are incurred in transferring raw materials and labor from the place of availability to the factory.
D) These costs cannot be controlled by an organization as they are transferred to the organization from the market participants.
3) Transferred-in costs are treated as if they are ________.
A) conversion costs added at the beginning of the process
B) costs of beginning inventory added at the beginning of the process
C) direct labor costs added at the beginning of the process
D) a separate direct material added at the beginning of the process
4) Direct Disk Drive Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for June 20X5:
Work in process, beginning inventory25,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period165,000 units
Completed and transferred out185,000 units
Work in process, ending inventory5,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
How many units must be accounted for during the period?
A) 215,000 units
B) 190,000 units
C) 169,500 units
D) 140,000 units
5) Direct Disk Drive Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for August 20X5:
Work in process, beginning inventory150,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period450,000 units
Completed and transferred out400,000 units
Work in process, ending inventory200,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
Calculate equivalent units for conversion costs using the FIFO method.
A) 401,500 units
B) 350,000 units
C) 300,000 units
D) 395,000 units
6) The journal entry for transfer from Department B to finished goods is:
Work in Process—Department B
Finished Goods Control
7) In a series of interdepartmental transfers, each department is regarded as separate and distinct for accounting purposes.
8) When calculating the costs to be transferred using the FIFO method, we should not include costs assigned in the previous period to units that were in process at the beginning of the current period but are now included in the units transferred.
9) Transferred-in costs are always 100 percent complete at the beginning of the process in the new department.
10) Transferred-in costs are costs incurred in previous departments that are carried forward as the product’s cost when it moves to a subsequent process in the production cycle.
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