Question : 71. In the same time period, it possible that a : 1256547

 

 

71. In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

 

 

72. If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor also must be 100.

 

 

73. Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

 

 

 

 

 

 

74. If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

 

 

75. One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit.

 

 

76. Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

 

 

 

 

77. All costs of the processes in a process costing system ultimately pass through the Cost of Goods Sold account.

 

 

78. The Packing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry: 

 

Finished Goods Inventory

74,000

 

 

Goods in Process Inventory, Packing Dept

 

74,000

 

 

Reference: 16_02

Refer to the following table of cost information: 

 

 

Goods in

 

Goods in

 

 

 

 

 

Process–

 

Process–

 

Finished

 

 

 

Pushing

 

Shoving

 

Goods

 

 

 

 

 

 

 

 

 

 

Beginning inventory

$100,000

 

$150,000

 

$  90,000

 

 

Costs incurred:

 

 

 

 

 

 

 

Direct materials

40,000

 

50,000

 

 

 

 

Direct labor

120,000

 

70,000

 

 

 

 

Overhead applied

60,000

 

105,000

 

 

 

 

Costs transferred out

(250,000

)

(495,000

)

 

 

 

Costs transferred in

 

 

250,000

 

495,000

 

 

Cost of goods sold

________

 

_______

 

(525,000

)

 

Ending inventory

$  70,000

 

$130,000

 

$  60,000

 

 

 

 

 

 

 

 

 

 

 

79. The following journal entry would be made to record the use of direct labor in the reporting period covered by the information: 

 

Goods in Process Inventory, Pushing Dept

120,000

 

 

Goods in Process Inventory, Shoving Dept

70,000

 

 

Factory Payroll

 

190,000

 

 

 

80. If the predetermined overhead allocation rates were based on direct labor costs, the rates for the Pushing and Shoving Departments were 50% and 150%, respectively.

 

 

 

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