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Exam 12: Job-Order, Process, and Hybrid Costing Systems

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Question 1

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What are materials requisition forms, and how are they used in a job-order cost system?

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A materials requisitio...

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What source documents would be used in preparing a job cost sheet?

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All of the following are asset exchange events except:

Indicate whether each of the following statements about process costing systems is true or false.The use of a predetermined overhead rate is not required with process costing because the method calculates an average unit cost.When manufacturing overhead is applied to units of product, total assets do not change.For Morris Company, the cost per equivalent whole unit was $3.58. If the ending work in process was 8,000 units 85% complete, the total cost assigned to these units would be $28,640.A company with three processing departments generally would calculate a cost per equivalent whole unit for each department.With a process costing system, a company will not have to deal with underapplied or overapplied overhead.

Trenton Company is a manufacturing company with several processing departments. The company uses a process cost system. When goods are complete, the product cost transferred to finished goods inventory includes the sum of product costs from all the processing departments.

Job-order cost systems are used by many service businesses; process cost systems are not applicable to service businesses.

During the current accounting period, O'Hare Company paid $2,300 for selling and administrative expenses. Payment of cash for selling and administrative expenses is:

Which of the following is not an approach to compute equivalent whole units?

Indicate whether each of the following statements is true or false.A work ticket is used to keep track of an employee's time for a given time period, as well as the amount of time spent on individual jobs.When a job is finished, the job cost sheet shows all the costs associated with the job.Use of a predetermined overhead rate is needed for a company using a process cost system but not for a company using a job-order cost system.A company using a job-order cost system generally would maintain three inventory accounts: Raw Materials Inventory, Work in Process Inventory, and Manufacturing Overhead.Applying overhead to products is an asset exchange transaction.

A hybrid cost system contains:

Which event results in the transfer of product costs from the balance sheet to the income statement?

Steele Manufacturing Company reported the following work in process inventory account activity measured in units. The ending inventory was estimated to be 70% to be complete.Beginning inventory 20,000 Started 90,000 Ending inventory 15,000 What is the number of equivalent whole units in Steele's ending work in process inventory?

Which of the following statements regarding a process cost system is false?

In a job-order cost system, the inventory accounts generally are maintained on a perpetual basis.

O'Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. On January 1, O'Hare purchased $3,000 of raw materials with cash. The entry to record the purchase of raw materials would:

Link Company uses a process cost system and the weighted average method. During the year the company completed 1,300 units of product. Ending inventory consisted of 400 units that were 50% complete. The total dollar cost associated with production of inventory was $90,000. The cost per equivalent whole unit would be which of the following?

The entry to record the completion of a job in a job costing system would cause:

Generally accepted accounting principles (GAAP) prohibit the use of a hybrid cost system.

The work in process account for Chambers Company contained the following entries: Debit of $80,000 for direct raw materials Debit of $120,000 for direct labor Debit of $60,000 for manufacturing overhead Ending balance, $84,000, associated with Job #2 The company uses a job-order cost system. Work was only performed on two jobs during the period. The beginning balance in work in process was zero. What was the cost of Job #1, which was started and completed during the period?

Select the correct formula for computing equivalent units for the period under the weighted average approach.