1. 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? (Points : 5)
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. Luft Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:
Units Percent Complete with respect to Conversion
Beginning work in process inventory 11,000 90%
Started in production during June 58,000
Ending work in process inventory 17,000 10%
According to the company’s records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred in the department during the month.
What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)
3. Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:
Units Material Cost
Work in process on October 1 6,000 $3,000
Units started in October 50,000 $25,560
Units completed and transferred to next Department during October 44,000
What was the materials cost of work in process at on October 31?
4. Which of the following accounts is debited when direct labor is recorded? (Points : 5)
Work in process
Salaries and wages expense
Salaries and wages payable
5. Stickles Corporation incurred $79,000 of actual Manufacturing Overhead costs during August. During the same period, the Manufacturing Overhead applied to Work in Process was $75,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: (Points : 5)
debit to Manufacturing Overhead of $79,000.
credit to Manufacturing Overhead of $79,000.
credit to Work in Process of $75,000.
debit to Work in Process of $75,000.
6. Valles Corporation had $22,000 of raw materials on hand on February 1. During the month, the company purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a: (Points : 5)
credit to Raw Materials of $97,000.
debit to Raw Materials of $97,000.
credit to Raw Materials of $75,000.
debit to Raw Materials of $75,000.