Reference no: EM13356035

Objective Questions on Process Costing System & Overheads allocation

1. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows:

April 1, work in process:

Materials cost. 3000 units                    -                       $7,500

Conversion cost , 3000 units     2/3 completed     -       6,000

Materials added during april, 10000 units           -       26,000

Conversion costs during April                                -       31,000

Goods finished during April 11500 units                 -       --

April 30 work in process 1500 units

½ completed                                                        -              --

All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for April is:

a.$2.50

b.$2.60

c.$5.50

d.$2.26

2. Summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for:

a.finished goods and cost of goods sold

b.work in process and factory overhead

c.work in process and cost of goods sold

d.work in process and finished goods

3. Which of the following is not a characteristic of a process cost system?

a.The system may use several Work-in-Process accounts.

b.Manufacturing costs are grouped by departments.

c.The system allocates costs between completed and partially completed units within a department.

d.The system measures costs for each completed job.

4. The Collins Company forecasts that total overhead for the current year will be $12,000,000 and that total machine hours will be 200,000 hours. Year to date, the actual overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the Collins Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) the overhead is over/under applied by?

a.$4,000,000 under

b.$2,000,000 under

c.$2,000,000 over

d.$4,000,000 over

5. Which of the following statements is false?

a.There is no overlap between financial and managerial accounting.

b.Managerial accounting does not need to conform to GAAP.

c.Managerial accounting sometimes relies on past information.

d.Financial accounting must conform to GAAP.

6. Which of the following is the correct flow of manufacturing costs?

a.Cost of goods sold, raw materials, work in process, finished goods.

b.Raw materials, work in process, finished goods, cost of goods sold.

c.Raw materials, finished goods, cost of goods sold, work in process.

d.Work in process, finished goods, raw materials, cost of goods sold.

7. At the end of the fiscal year, the balance in Factory Overhead is small. This balance would normally be:

a.transferred to Work in Process

b.transferred to Cost of Goods Sold

c.transferred to Finished Goods

d.allocated between Work in Process and Finished Goods

8. The cost of production of completed and finished goods during the period amounted to $400,000, and the finished products shipped to customers had total production costs of $337,000. From the following, select the entry to record the transfer of costs from finished goods to cost of goods sold.