process costing, if an abnormal loss arises, the process account is generally: a) debited with the scrap value of the abnormal loss units b) credited with the scrap value of the abnormal loss units c) debited with the full production cost of the abnormal loss units d) credited with the full production cost of the abnormal loss units

process costing, if an abnormal loss arises, the process account is generally: a) debited with the scrap value of the abnormal loss units b) credited with the scrap value of the abnormal loss units c) debited with the full production cost of the abnormal loss units d) credited with the full production cost of the abnormal loss units

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 28E: As goods are transferred from a prior process to a subsequent process, the following entry to record...

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As goods are transferred from a prior process to a subsequent process, the following entry to record the cost of abnormal spoilage would be made: a. debit Work in Process (subsequent department) and credit Work in Process (prior department) b. debit Abnormal Spoilage Loss and credit Work in Process (prior department) c. debit Finished Goods and credit Work in Process (prior department) d. debit Finished Goods and credit Abnormal Loss
If some units are normally lost during the manufacturing process and the remaining good units absorb the cost, what effect does this have on the unit cost of goods finished during the period and the cost of the work in process at the end of the period?
Which is nor needed to compute equivalent units of production? A. the percentage of completion for inventory still in process B. the number of units transferred out C. the number of units started and completed D. the material cost per unit
In a process account, abnormal losses are valued:A. at their scrap value.B. the same as good production.C. at the cost of raw materials.D. at good production cost less scrap value.
‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
USE FIFO a. total cost of units transferred - out b. the amount of Work in Process,end c. Cost of abnormal loss units
Prepare the abnormal loss/gain statement, clearly showing the amount transferred to the costing profit and loss account.
In a process costing system, the cost per equivalent unit must be computed before computing equivalent units. True False
f) ‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
Summarize the total costs to account for; calculate the cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
Assign costs of ending work in process inventory and the units transferred out.
Which statement is accurate concerning the FIFO method for assigning costs in a process costing system? a. FIFO method assumes the first costs incurred are transferred out. b. FIFO method merges costs from prior periods with costs from current periods. c. FIFO method assumes the first costs incurred are still in process. d. FIFO method treats units in process at the beginning of the period in the same manner as units in process at the end of the period.