GCU ACC650 Quiz 2 100% Correct Latest 2019

• Equivalent-unit calculations are necessary to allocate manufacturing costs between:

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cost of goods manufactured and beginning work in process.

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units sold and ending work in process.

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beginning work in process and units completed.

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cost of goods manufactured and cost of goods sold.

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units completed and ending work in process.

• Which of the following is true concerning cost drivers for the predetermined overhead rate in a process-costing system?

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Cost drivers are irrelevant in process-costing systems.

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If direct labor hours is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

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If direct material cost is the cost driver, direct labor and direct materials may be combined into the single element of prime cost.

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Predetermined overhead rates are not used in a process-costing system.

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If direct labor cost is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.

• Process costing would likely be used in all of the following industries except:

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chemicals.

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automobile repair.

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wood pulp production.

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petroleum refining.

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truck tire manufacturing.

• Corrigan, Inc. overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory. What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured, respectively?

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Overstated, none.

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Overstated, understated.

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None, none.

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None, overstated.

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Overstated, overstated.

• Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes:

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a credit to Work-in-Process Inventory for $86,000.

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a debit to Cost of Goods Sold for $432,000.

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a debit to Work-in-Process Inventory for $432,000.

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a debit to Finished-Goods Inventory for $86,000.

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a debit to Finished-Goods Inventory for $432,000.

• Oxford, Inc., which uses a process-cost accounting system, began operations on January 1 of the current year. The company incurs conversion cost evenly throughout manufacturing. If Oxford started work on 3,000 units during the period and these units were 70% of the way through manufacturing, it would be correct to say that the company has:

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2,100 completed units.

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900 equivalent units of production.

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3,000 equivalent units of production.

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3,000 physical units in production.

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900 in-process units.

• Harrington Industries, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Harrington should make a journal entry on December 31 that includes:

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a credit to Work-in-Process Inventory for $86,000.

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a credit to Work-in-Process Inventory for $432,000.

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a debit to Cost of Goods Sold for $432,000.

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a credit to Finished-Goods Inventory for $432,000.

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a debit to Finished-Goods Inventory for $86,000.

• Bratton Corporation had 6,500 units of work in process on April 1. During April, 19,100 units were completed and as of April 30, 5,100 units remained in production. How many units were started during April?

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None of the answers is correct.

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17,700.

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30,700.

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11,600.

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20,500.

• Mulligan, Inc., which uses a process-cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:

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a debit to Work-in-Process Inventory: Department A and a credit to Work-in-Process Inventory: Department B.

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a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.

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a debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.

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a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.

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a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

• All of the following statements about an operation-costing system are true except:

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direct-material cost is traced to each batch produced.

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conversion costs are applied to products on a departmental basis using a predetermined application rate.

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conversion activities are similar across product lines but direct materials differ significantly.

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batches of product pass sequentially through the same processes.

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direct material and conversion costs are traced to each batch of product produced.

• When calculating unit costs under the weighted-average process-costing method, the unit cost is based on:

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only costs in the period's beginning work-in-process inventory.

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a summation of the costs in the beginning work-in-process inventory plus costs incurred in the current period.

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only the current period's manufacturing costs.

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only costs incurred in previous accounting periods.

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a summation of the costs in the beginning work-in-process inventory plus costs to be incurred in the upcoming period.

• Forte Co., had 3,000 units of work in process on April 1 that were 60% complete. During April, 11,000 units were started and as of April 30, 4,000 units that were 40% complete remained in production. How many units were completed during April?

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12,200.

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11,000.

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10,000.

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None of the answers is correct.

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9,800.

• Gulliver, Inc., which uses a process-costing system, transfers completed production from Department no. 1 to Department no. 2 for further work. Which of the following best describes the account that would be debited to record this transfer?

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Work-in-Process Inventory: Department no. 1.

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Cost of Goods Transferred.

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Work-in-Process Inventory: Department no. 2.

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Finished-Goods Inventory: Department no. 1.

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Finished-Goods Inventory: Department no. 2.

• Which of the following data are needed to calculate total equivalent units under the weighted-average method?

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Work to complete beginning work in process, work-to-date on ending work in process.

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Work-to-date on ending work in process, units started during the period.

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Units completed, work to complete beginning work in process.

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Units completed during the period, work-to-date on ending work in process.

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Work to complete beginning work in process, units completed, and work done on ending work in process.

• Which of the following is a key document in a typical process-costing system?

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Departmental production report.

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Sequential product report.

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Production budget.

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Master schedule.

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Materials requirement report.

• In a process-costing system, manufacturing costs are accumulated by:

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department, only.

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department or process, and time period.

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department and time period, only.

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batch and time period.

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batch.

• When computing the conversion cost per equivalent unit under the weighted-average method of process costing, all of the following information would be needed except:

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the conversion cost incurred during the current accounting period.

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the conversion work performed during the current period on the beginning work-in-process inventory.

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the conversion work performed during the current period on the ending work-in-process inventory.

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the conversion cost in the beginning work-in-process inventory.

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the number of units completed during the current accounting period.

• Process costing is used to account for:

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finished goods that are refined and processed further.

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raw materials that are converted directly to finished goods.

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large numbers of identical products that are produced in a continuous manufacturing environment.

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small numbers of products that are produced in batches.

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large numbers of products that are produced in a non-repetitive process.

• Unit costs in a process-costing system are derived by using:

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equivalent units.

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in-process units.

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physical units.

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completed units.

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a measure of activity other than those listed above.

• Breight, Inc., which uses a process-costing system, transfers completed production from Department no. 1 to Department no. 2 for further work. Which of the following best describes the account that would be credited to record this transfer?

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Work-in-Process Inventory: Department no. 1.

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Finished-Goods Inventory: Department no. 1.

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Finished-Goods Inventory: Department no. 2.

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Cost of Goods Transferred.

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Work-in-Process Inventory: Department no. 2.