ACCT 505 real quiz 1 by charlie an 20160911 - Question 1...

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Question 1. 1. (TCO B) Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted average method, the number of equivalent units of production with respect to conversion costs would be (Points : 5) the same as the units completed. less than the units started during the period. the same as the units started during the period. less than the units completed. Question 2. 2. (TCO B) Which of the following companies would be most likely to use a process costing system rather than a job-order costing system? (Points : 5) Crude oil refining Shipbuilding A costume maker that makes specialty costumes for figure skaters A law firm Question 3. 3. (TCO B) 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. Materials are 100% complete with respect to beginning and ending work in process inventory. Information concerning operations in the forming department in October follows. What was the materials cost of work in process on October 31? 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 (Points : 5) $3,060 $6,000
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$6,120 $5,520 Question 4. 4. (TCO B) Which of the following accounts is debited when direct labor is recorded? (Points : 5) Manufacturing overhead Salaries and wages expense Salaries and wages payable Work in process Question 5. 5. (TCO B) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a (Points : 5) debit to raw materials of $74,000. debit to work in process of $68,000. credit to manufacturing overhead of $6,000. debit to work in process of $74,000. Question 6. 6. (TCO B) 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. debit to raw materials of $75,000. credit to raw materials of $75,000. Page 2
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Question 1. 1. (TCO B) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. Several companies in different industries are listed below. i. Specialty coffee roaster (roasts small batches of specialty coffee beans) ii. Custom aircraft builder iii. Brick manufacturer iv. Microbrewery that produces a number of specialty beers v. Steel company making chain link fences from iron ore vi. Breakfast cereal manufacturer For each company, indicate whether the company is most likely to use job-order costing or process costing.
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