61. A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.
62. In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.
63. In process costing, indirect materials are charged directly to Goods in Process Inventory.
64. If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:
|
Goods in Process Inventory, Painting Dept
|
70,000
|
|
|
Factory Overhead
|
|
70,000
|
65. If the predetermined overhead allocation rate is 85% of direct labor cost and the Polishing Department's direct labor cost for the reporting period is $20,000, the following entry would be made to record the allocation of overhead to the products processed in this department:
|
Factory Overhead
|
17,000
|
|
|
Goods in Process Inventory, Painting Dept
|
|
17,000
|
|
|
|
|
66. If the predetermined overhead allocation rate is 225% of direct labor cost and the Mixing Department's direct labor cost for the reporting period is $10,000, the following entry would be made to record the allocation of overhead to the products processed in this department:
|
Goods in Process Inventory, Mixing Dept
|
225,000
|
|
|
Factory Overhead
|
|
225,000
|
Reference: 16_01
Refer to the following table of cost information:
|
|
Goods in
|
|
Goods in
|
|
|
|
|
Process–
|
|
Process–
|
|
Finished
|
|
|
Pickling
|
|
Canning
|
|
Goods
|
|
|
|
|
|
|
|
|
Beginning inventory
|
$25,000
|
|
$ 7,500
|
|
$10,000
|
|
Costs incurred:
|
|
|
|
|
|
|
Direct materials
|
16,000
|
|
3,000
|
|
|
|
Direct labor
|
4,000
|
|
2,100
|
|
|
|
Overhead applied
|
6,000
|
|
4,200
|
|
|
|
Costs transferred out
|
(29,000
|
)
|
(35,000
|
)
|
|
|
Costs transferred in.
|
|
|
29,000
|
|
35,000
|
|
Cost of goods sold
|
______
|
|
_______
|
|
(39,000
|
|
Ending inventory
|
$22,000
|
|
$10,800
|
|
$ 6,000
|
|
|
|
|
|
|
|
67. The company uses the same predetermined overhead allocation rate (based on direct labor) for the Pickling and Canning Departments.
68. If the allocated overhead equaled the actual overhead, then total manufacturing costs incurred in both departments during the reporting period were $35,300.
69. If a department that applies process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, it must add 80,000 equivalent units of labor to complete them.
70. The number of equivalent units of production assigned to ending goods in process inventory should usually be equal to or less than the number of physical units in ending goods in process inventory.