acc 205 quiz 2

1. Question
: (TCO F) For which situation(s)
below would an organization be more likely to use a job-order costing system of
accumulating product costs rather than a process costing system?

Student Answer: A steel factory that processes iron ore into
steel bars

A factory that processes sugar and other
ingredients into black licorice

A costume maker that makes specialty costumes
for figure skaters

All of these

2. Question : (TCO F) Process costing would be appropriate for each of
the following except:

Student Answer: custom furniture manufacturing.

oil refining.

grain milling.

newsprint production.

Instructor Explanation: Chapter 4

3. Question : (TCO F) Unizat Corporation uses the weighted-average
method in its process costing system. The following information pertains to one
of the company’s processing departments for a recent month:

	Units	Material Cost
Beginning work in process	30,000	$22,000
Started during the month	80,000	$72,000
Units completed	85,000
Ending work in process	25,000

All materials are added at the beginning of the process. The
cost per equivalent unit for materials is closest to:

Student Answer: $0.86

$0.90

$1.10

$1.18

4. Question : (TCO F) Which of the following accounts is debited when
direct labor is recorded?

Student Answer: Work in process

Salaries and wages expense

Salaries and wages payable

Manufacturing overhead

5. Question : (TCO F) During December at Ingrim Corporation, $74,000 of
raw materials were requisitioned from the storeroom for use in production.
These raw materials included both direct and indirect materials. The indirect
materials totaled $6,000. The journal entry to record the requisition from the
storeroom would include a:

Student Answer: debit to Raw Materials of $74,000.

debit to Work in Process of $68,000.

credit to Manufacturing Overhead of $6,000.

debit to Work in Process of $74,000.

Instructor Explanation: Chapter 3

6. Question : (TCO F) Wedd Corporation had $35,000 of raw materials on
hand on May 1. During the month, the company purchased an additional $68,000 of
raw materials. During May, $92,000 of raw materials were requisitioned from the
storeroom for use in production. These raw materials included both direct and
indirect materials. The indirect materials totaled $5,000. The debits to the
Work in Process account as a consequence of the raw materials transactions in
May total:

Student Answer: $92,000.

$0.

$68,000.

$87,000.

Instructor Explanation: Chapter 3

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1. Question : (TCO F) Some companies use process costing and some use
job-order costing. Which method a company uses depends on its industry. A
number of companies in different industries are listed below:

i. Custom boat builder

ii. Frozen cranberry juice processor

iii. Concrete block manufacturer

iv. Winery that produces a number of varietal wines

v. Aluminum refiner that makes aluminum ingots from bauxite
ore

For each company, indicate whether the company is most
likely to use job-order costing or process costing.

2. Question : (TCO F) Job 728 was recently completed. The following data
have been recorded on its job cost sheet:

Direct materials $81,000

Direct labor hours 1,220
labor hours

Direct labor wage rate $15
per labor-hour

Machine Hours1,520
machine hours

Number of units completed 4,400
units

The company applies manufacturing overhead on the basis of
machine-hours. The predetermined overhead rate is $16 per machine-hour.

Compute the unit product cost that would appear on the job
cost sheet for this job.

3. Question : (TCO F) Miller Company manufactures a product for which
materials are added at the beginning of the manufacturing process. A review of
the company’s inventory and cost records for the most recently completed year
revealed the following information:

Units Materials Conversion

Work in process. Jan. 1 (80% complete with respect to
conversion costs) 100,000$100,000 $157,500

Units started into production 500,000

Costs added during the year:

Materials $650,000

Conversion $997,500

Units completed during the year 450,000

The company uses the weighted-average cost method in its
process costing system. The ending inventory is 50% complete with respect to
conversion costs.

Required:

i. Compute the equivalent units of production and the cost
per equivalent units for materials and for conversion costs.

ii. Determine the cost transferred to finished goods.

iii. Determine the amount of cost that should be assigned to
the ending work in process inventory.

4. Question : (TCO F) Weisinger Corporation has provided the following
data for the month of January:

Inventories Beginning Ending

Raw
materials $28,000$29,000

Work In
process $16,000$14,000

Finished
goods $42,000$54,000

Additional Information

Raw
material purchases $56,000

Direct
labor costs $87,000

Manufacturing
overhead cost incurred $51,000

Indirect
materials included in manufacturing overhead costs incurred $3,000

Manufacturing
overhead cost applied to work in process $55,000

Prepare a Schedule of Cost of Goods Manufactured and a
Schedule of Cost of Goods Sold in good form.

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