ACCT 2302 Chapter 3 Smart Book PDF

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ACCT 2302 CHAPTER 3 SMARTBOOK A company’s beginning work in process contained 200 units that were 20% complete. Those units were completed and transferred to finished goods. During the period 4,300 units were started. Of the units started, 4,000 were transferred to finished goods. The 300 units in ending work in process were 30% complete. Using the weighted-average method, the equivalent units of production equals __________. 4,290 A production report includes __________. BOTH UNIT AND COST INFORMATION A production report presents __________. BOTH COSTS TO BE ACCOUNTED FOR AND COSTS ACCOUNTED FOR All costs other than direct materials and direct labor that are incurred to produce a product are called indirect costs or (MANUFACTURING OVERHEAD) An equivalent unit is a measure used to convert (PARTIALLY) completed units into the equivalent of a full unit. Both process costing and job order costing assign __________ costs to products. DIRECT LABOR; MANUFACTURING OVERHEAD; DIRECT MATERIALS Conversion costs include __________. MANUFACTURING OVERHEAD; DIRECT LABOR Cost of goods completed is transferred from work in process inventory to __________. FINISHED GOODS INVENTORY Cost transferred from Work in Process (WIP) Inventory to Finished Goods (FG) Inventory __________. MAY BE CALLED COST OF GOODS COMPLETED; REMAIN IN FG INVENTORY UNTIL GOODS ARE SOLD; MAY BE CALLED COST OF GOODS MANUFACTURED Costs that are moved from one production process to another are called (TRANSFERRED-IN) costs. Equivalent units of production are needed to __________. PROPERLY PREPARE GAAP-BASED FINANCIAL STATEMENTS; DETERMINE THE COST OF PARTIALLY COMPLETED UNITS Equivalent units of production under the weighted-average method equal __________. EQUIVALENT UNITS IN ENDING WORK IN PROCESS PLUS UNITS TRANSFERRED OUT

For a juice maker, grapes would be considered a(n) (DIRECT MATERIAL) For a toy maker, rent, utilities, and insurance are all part of (MANUFACTURING OVERHEAD) Given $40,000 of current costs, $3,000 of costs in beginning inventory, and 500 equivalent units, the costs per equivalent using the weighted-average method is ($86) Given the following, compute the conversion cost per equivalent unit using the weighted-average method. Conversion costs in beginning inventory $5,000. Conversion costs added in the current period $40,000. A total of 1,000 units were completed and transferred out during the period. The 500 units in ending inventory are 50% complete. $36 In order to track the cost of partially completed units, they must be converted into a(n) (EQUIVALENT) number of fully completed units. Information about the number of units and costs that flow through a manufacturing process during an accounting period is provided on the (PRODUCTION REPORT) Once production is completed, total manufacturing costs are transferred to __________. FINISHED GOODS INVENTORY Place the steps in order as needed to prepare a production report using the weighted-average method. 1. RECONCILE THE NUMBER OF PHYSICAL UNITS; 2. CONVERT PHYSICAL UNITS INTO EQUIVALENT UNITS; 3. CALCULATE COST PER EQUIVALENT UNIT; 4. RECONCILE THE TOTAL COST OF WORK IN PROCESS INVENTORY; 5. PREPARE THE REPORT Reconciling the total cost of Work in Process Inventory is the __________ step in preparing a production report using the weighted-average method. FOURTH The difference between (units in beginning inventory + units started) and units completed is __________. UNITS IN ENDING INVENTORY The first step in preparing a weighted-average production report is __________. RECONCILE THE NUMBER OF PHYSICAL UNITS The formula to reconcile the number of physical units the company worked on during the period is units in __________. BEGINNING INVENTORY + UNITS STARTED = UNITS COMPLETED + UNITS IN ENDING INVENTORY The foundation of a process costing system is the (PRODUCTION REPORT)

The key difference between the weighted average method and the FIFO method is how they deal with units and costs __________. IN BEGINNING WORK IN PROCESS INVENTORY The production report __________. PROVIDES INFORMATION TO RECORD MANUFACTURING COSTS IN THE ACCOUNTING SYSTEM The total cost of work in process inventory __________. IS DIVIDED BETWEEN ENDING INVENTORY AND COSTS TRANSFERRED TO THE NEXT PROCESS OR FINISHED GOODS; INCLUDES BEGINNING WORK IN PROCESS PLUS CURRENT COSTS To calculate cost per equivalent unit using the weighted-average method, add the cost of (BEGINNING) inventory to current costs and divide by (EQUIVALENT) units. True or False: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of the beginning inventory. TRUE True or False: When using process costing, direct labor costs are often combined with manufacturing overhead into a single cost category. TRUE Using the weighted-average method, if work in process inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period, there are a total of (340) equivalent units of production. What is a key difference between process and job order costing? UNDER PROCESS COSTING, IT MAKES NO SENSE TO TRY TO IDENTIFY MATERIALS, LABOR, AND OVERHEAD COSTS WITH A PARTICULAR CUSTOMER ORDER What is the formula for the cost per equivalent unit using the weightedaverage method? (BEGINNING INVENTORY + CURRENT COSTS) / EQUIVALENT UNITS When customers purchase products, the manufacturing costs associated with the products are transferred to __________. COST OF GOODS SOLD When production is completed in the last processing department, the units are transferred to the (FINISHED GOODS) Inventory account. When products are sold, manufacturing costs are transferred to __________. COST OF GOODS SOLD When using process costing, __________. A SEPARATE PRODUCTION REPORT IS PREPARED FOR EACH PROCESS

When using process costing, costs are accumulated by __________. MAJOR PROCESS When using process costing, major material inputs used in production that can be traced to the product are __________. DIRECT MATERIALS Which of the following are similarities between job order costing and process costing? THE SAME BASIC INVENTORY ACCOUNTS ARE USED FOR BOTH COSTING SYSTEMS; THE FLOW OF COSTS THROUGH THE INVENTORY ACCOUNTS IS BASICALLY THE SAME FOR BOTH COSTING SYSTEMS; THE PURPOSE IS TO ASSIGN DIRECT MATERIAL, DIRECT LABOR, AND MANUFACTURING OVERHEAD TO PRODUCTS Which of the following is not a method that can be used to prepare process costing production reports? LAST-IN, FIRST-OUT (LIFO) METHOD Which of the following products would be more suitable for process costing than job order costing? GASOLINE; BREAKFAST CEREAL; SUNSCREEN Which of the following statements are true regarding process costing production reports? MANAGERS CAN USE PRODUCTION REPORTS TO MONITOR AND CONTROL PRODUCTION COSTS; PRODUCTION REPORTS PROVIDE INFORMATION ACCOUNTANTS NEED TO RECORD MANUFACTURING COSTS INTO THE ACCOUNTING SYSTEM; PRODUCTION REPORTS ARE USED TO DETERMINE HOW MUCH COST TO TRANSFER FROM ONE PROCESS TO THE NEXT Which of the following statements are true? UNDER THE WEIGHTEDAVERAGE METHOD, BEGINNING INVENTORY COSTS ARE TREATED JUST LIKE COSTS ADDED DURING THE CURRENT PERIOD; COSTS THAT MOVE FROM ONE PROCESS TO ANOTHER ARE CALLED TRANSFERRED-IN COSTS Which of the following statements is true regarding process costing? A SEPARATE PRODUCTION REPORT IS PREPARED FOR EACH MAJOR PROCESS...