Select the best answer 1. Which of the following characteristics applies to proc
ID: 2543362 • Letter: S
Question
Select the best answer 1. Which of the following characteristics applies to process costing? a. Differentiated products are provided on a special order basis. b. Cost are accumulated by department. c. Cost are accumulated by jobs. d. Direct labor workers must keep detailed records as to the jobs on which they worked. 2. All of the following could be included in the cost of a product located in the final production department of a multi-step process except: a. The costs of materials, labor and overhead identifiable with that department. b. Marketing and distribution costs. c. The costs of service departments that have been allocated to production departments. d. The costs of prior production departments. 3. Daniel LLC incurred cost of $43,000 for material, $26,000 for labor, and $23,000 for factory overhead. There no beginning or ending work in process. 5,000 units were completed and transferred out. The unit cost labor is: a. $ 8.60 b. S 5.20 c. $ 18.40 d. $ 4.60 4. Daniel LLC incurred cost of $43,000 for material, $26,000 for labor, and $23,000 for factory overhead. There no beginning or ending work in process. 5,000 units were completed and transferred out. The cost per u is: IS: a. S 8.60 b. S 5.20 c. $ 18.40 d. $ 4.60 . The number of whole units that could have been completed during a period, using the production costs incurred during that period is called: a. Standard production. b. Equivalent production. c. Total units. d. Manufactured units. All of the following are characteristics of a production report except: a. It includes the number of units completed during the period. b. It includes the costs incurred by the department during the period. c. It includes the number of units in ending work-in-process and the estimated stage of completion. d. The department manager completes the report on a monthly basis. The cost of an equivalent unit is equal to:Explanation / Answer
Solution:
1)
The correct option is b. Cost are accumulated by department
Process costing is used when nearly identical units are mass produced. It is a method for collecting and assigning manufacturing cost to the units produced. In this method the costs are accumulated by department.
2)
The correct option is b. Marketing and distribution cost
Product cost is a cost of making the product. It includes direct material costs, direct labor and manufacturing overhead and the overheads of service department, allocated to production department.
Marketing and distribution cost is not a part of product cost. It is selling expense, hence not included in product cost.
3)
Unit cost labor = Total Labor Cost incurred / Total Units completed and transferred out
= $26,000 / 5,000 Units
= $5.20 per unit
The correct option is b. $5.20 per unit
4)
The cost per unit = Total Manufacturing Cost / Total Units completed and transferred out
Total Manufacturing Cost = Direct materials 43,000 + labor $26,000 + Factory Overhead $23,000
= $92,000
The cost per unit = Total Manufacturing Cost $92,000 / Total Units completed and transferred out 5,000 Units
= $18.40
The correct option is c. $18.40
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