Question : 71. Hou Company applies factory overhead to its production departments the : 1225567

71. Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is: 

A. Debit Factory Overhead – Assembly $112,500; debit Factory Overhead – Finishing $31,500; credit Goods in Process Inventory $144,000.

B. Debit Factory Overhead $144,000; credit Goods in Process Inventory – Assembly $112,500; credit Goods in Process – Finishing $31,500.

C. Debit Factory Overhead $144,000; credit Factory Payroll $144,000.

D. Debit Goods in Process Inventory – Assembly $112,500; debit Goods in Process Inventory – Finishing $31,500; credit Factory Overhead $144,000.

E. Debit Factory Payroll $144,000; credit Cash $144,000.

72. Which of the following characteristics applies to process cost accounting but not to job order cost accounting? 

A. Use of a predetermined overhead rate.

B. Identifiable lots of production.

C. Equivalent units of production.

D. Labor time ticket for each employee.

E. Use of a single Goods in Process Inventory account.

73. A measure of the productivity of a process with respect to its use of direct materials, direct labor, or overhead, and an expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period, is called: 

A. Manufacturing overhead.

B. Units in process.

C. A job cost sheet.

D. Equivalent units of production.

E. Process cost summary.

74. Equivalent units of production are equal to: 

A. The number of units that could have been completed if all effort had been applied to units that were started and completed during a period.

B. The number of finished units actually produced during a period.

C. The number of units introduced into the process during a period.

D. The number of units still in process at the end of a period.

E. Physical units that were started and completed during a period.

75. Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment? 

A. In most manufacturing environments, it is not possible to conduct a physical count of units.

B. Companies often use a combination of a process costing and job order costing systems.

C. In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process.

D. All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period.

E. In most cases, there is no difference between physical units and equivalent units of production.

76. Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system? 

A. Determine over or underapplied overhead.

B. Determine the physical flow of units.

C. Compute equivalent units of production.

D. Compute the cost per equivalent unit.

E. Assign and reconcile costs.

77. Which of the following statements is most accurate? 

A. In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials.

B. The weighted average method uses the stage of completion of the current period’s beginning goods in process inventory account in calculating equivalent units.

C. The weighted average method focuses on the total costs and total equivalent units completed to date; this is the major difference between the weighted average method and the FIFO method of calculating equivalent units of production.

D. The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period.

E. It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods.

78. A production department’s output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending goods in process inventory. The units in ending goods in process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning goods in process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method. 

A. 10,000 units.

B. 10,300 units.

C. 15,000 units.

D. 15,300 units.

E. 10,700 units.

79. The Machining Department started the current month with a beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is: 

A. $13,000.

B. $56,000.

C. $59,000.

D. $110,000.

E. $165,000.

80. A company uses a process cost accounting system. Its Assembly Department’s beginning inventory consisted of 50,000 units, 3/4 complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are 1/4 complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is: 

A. $0.14.

B. $0.16.

C. $0.17.

D. $0.30.

E. $0.37.