71. In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.
72. If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor also must be 100.
73. Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.
74. If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.
75. One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit.
76. Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.
77. All costs of the processes in a process costing system ultimately pass through the Cost of Goods Sold account.
78. The Packing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry:
|
Finished Goods Inventory
|
74,000
|
|
|
Goods in Process Inventory, Packing Dept
|
|
74,000
|
Reference: 16_02
Refer to the following table of cost information:
|
|
Goods in
|
|
Goods in
|
|
|
|
|
|
Process–
|
|
Process–
|
|
Finished
|
|
|
|
Pushing
|
|
Shoving
|
|
Goods
|
|
|
|
|
|
|
|
|
|
|
Beginning inventory
|
$100,000
|
|
$150,000
|
|
$ 90,000
|
|
|
Costs incurred:
|
|
|
|
|
|
|
|
Direct materials
|
40,000
|
|
50,000
|
|
|
|
|
Direct labor
|
120,000
|
|
70,000
|
|
|
|
|
Overhead applied
|
60,000
|
|
105,000
|
|
|
|
|
Costs transferred out
|
(250,000
|
)
|
(495,000
|
)
|
|
|
|
Costs transferred in
|
|
|
250,000
|
|
495,000
|
|
|
Cost of goods sold
|
________
|
|
_______
|
|
(525,000
|
)
|
|
Ending inventory
|
$ 70,000
|
|
$130,000
|
|
$ 60,000
|
|
|
|
|
|
|
|
|
|
79. The following journal entry would be made to record the use of direct labor in the reporting period covered by the information:
|
Goods in Process Inventory, Pushing Dept
|
120,000
|
|
|
Goods in Process Inventory, Shoving Dept
|
70,000
|
|
|
Factory Payroll
|
|
190,000
|
80. If the predetermined overhead allocation rates were based on direct labor costs, the rates for the Pushing and Shoving Departments were 50% and 150%, respectively.