CHAPTER 16 ACCT 202 Definition Flashcards

Process operations

The mass production of similar products in a continuous flow of sequential processes is referred to as (Blank)

Both job order and process systems

Direct materials, direct labor, and overhead costs are commonly associated with which production system?

total number of units accounted for.

The total number of physical units to account for equals the:

Direct labor + applied overhead

Conversion cost is

Costs of beginning work in process
+Costs added this period
=Total costs
÷Equivalent units of production

= Cost per equivalent unit of production

How to calculate cost per equivalent unit of production

units completed and transferred to finished goods
units in ending work in process inventory

In Step 4, the EUP from Step 2 and the cost per EUP from Step 3 are used to assign costs to the:

Physical flow of units.
Equivalent units of production.
Costs per equivalent unit of production.
Assignment of total costs to units worked on in the period.

The process cost report summary summarizes:

raw materials inventory.

Raw materials which will be used as direct materials are initially included in

Debit to Raw Materials Inventory
Credit to Accounts Payable

The journal entry to purchase materials on credit for factory use includes which of the following?

Debit to Work in Process Inventory
Credit to Factory Wages Payable

The journal entry to assign costs of direct labor used in production includes which two of the following?

Debit to Factory Overhead
Credit to Factory Utilities Payable

The journal entry to record the use of utilities in a factory includes which of the following:

Debit to Finished Goods Inventory
Credit to Work in Process Inventory

The journal entry to transfer completed products from production to finished goods inventory includes which two of the following?

Just-in-time Production

A trend where inventory levels can be minimal and raw materials are not ordered or received until needed is called:

Companies are increasingly trying to standardize processes while attempting to meet individual customer needs.

What is the best rationale for why many companies use a hybrid costing system?

Production of special-order products; also called customized production.

What is Job order production

Football Fields
Financial Statement analysis
Custom Patio
Audio of financial statements
Uses job cost sheets.
Uses only one Work in Process Inventory account.

Examples of Job order operation

Paint Cans
Headphones
Trail mix
Beach towels
Suntan lotion
Transfers costs between multiple Work in Process Inventory accounts.
Uses mass production of standardized products.

Examples of Process operation

Measures cost per unit of product or service.
Transfers costs from a Work in Process Inventory account to a Finished Goods Inventory account.

Examples of process and job order operation (BOTH)

Computes equivalent units only on production activity in the current period.

FIFO method

Holds costs of finished products until sold to customers.

Finished Goods Inventory account

Holds costs of materials until they are used in production or as factory overhead.

Raw Materials Inventory account

Describes the activity and output of a production department for a period.

Production cost report

Notifies the materials manager to send materials to a production department.

Materials requisition

Used when materials move continuously through a manufacturing process.

Materials consumption report

Holds indirect costs until assigned to production.

Factory Overhead account

The weighted average method combines the costs of beginning inventory with the costs incurred during the current period to compute a single average cost per equivalent unit, which is then used to value both units completed and ending inventory.

Weighted-average method