Solucionario de contabilidad d costo 15edic. chapter 5

CHAPTER 5

Questions

1. The two basic systems of cost accounting are the job order cost system and the proc-ess cost system. The job order cost system may be used advantageously when goods are produced in lots of predetermined quantity usually based on customers' specifications. The process cost system may be used advantageously when goods are produced continuously as inthe case of mass production industries.
2. Job Order Cost System
items b, c, f
Process Cost System
items a, d, e, g, h
3. In a job order cost system, (a) costs are ac-cumulated by specific jobs or orders, and (b) unit costs are calculated at the time the job or order is finished. In a process cost sys-tem, (a) costs are accumulated by proc-esses or departments, and (b) unitcosts are calculated at the end of a given period, usually a month, for each process or department.
4. The term "unit cost" refers to the average cost of producing each unit manufactured during a given period; the term "job cost" refers to the cost of producing each job completed or fully manufactured during a given period. A job may consist of any num-ber of units.
5. a. In accounting formaterials under a job
order cost system, the costs, as deter-mined from materials requisitions, are charged to specific jobs (direct materials) or to factory overhead (indirect materials). Under a process cost system, these costs are charged to the de-partments to which the materials were issued.
b. The cost of labor under a job order cost system is charged to specific jobs worked on(direct labor) or to factory overhead (indirect labor). The cost of labor under a process cost system is charged to the departments in which the work was done.
c. The factory overhead charged to jobs is usually based on a predetermined rate under a job order cost system. Under a process cost system, these costs are gathered and distributed to departments, and a predetermined rate for eachdepartment is used to apply overhead to Work in Process.
6. The primary objective in accumulating costs by departments is to determine the amount of manufacturing expenses to be borne by the product as it passes through each de-partment or process. This facilitates better control by making available unit costs of production for each department, which can then be compared to unit costs in prior periodsand to budgeted costs for the current period.
7. "Equivalent production" represents the number of whole units that could have been completed during the period, given the amount of work that was performed. For example, if 1,000 units are completed during the period and there are 500 units in process estimated to be one-half completed at the end of the period, equivalent production in whole units is1,250 units [ 1,000 + (500 x .50) ].
8. It is necessary to estimate the stage of com-pletion of work in process at the end of the accounting period so that the costs incurred during the period may be properly allocated between the goods finished during the pe-riod and those in process at the end of the period.
9. If the estimate of the stage of completion of work in process is too high, thefigure repre-senting equivalent production would be overstated and, therefore, the unit cost for the month would be too low. As a result, the uncompleted units would absorb more than their appropriate share of total costs and the goods finished would be charged for less than the correct amount of costs. The unit cost of finished goods would be understated.
10. The production report shows the numberof units (1) in process at the beginning of the period, as well as the stage of completion, (2) placed in process or received from a prior department during the period, (3) completed or transferred to a subsequent department during the period, and (4) in process at the end of the period, as well as the stage of completion.
11. The four main sections of a cost of production summary are (1) the...