Question & Answer: 1. Which type of company is most likely to use a process costing system? A. Construction company B. Accounting firm C. Chemical produ…..

1. Which type of company is most likely to use a process costing system? A. Construction company B. Accounting firm C. Chemical producer D. Automobile repair sopleted work on 8,000 units, at a cost of $20 per unittion 2. The Assembly Department eted work on 8,0 at a cost of $20 per unit, and 7.000 of sold for $50 each. What is the journal entry to record the transfer of production these units were from the Assembly Department? Debit 160,000 Accounts and Explanations Credit Finished Goods Inventory WIP - Assembly Department WIP- Assembly Department Finished Goods Inventory 160,000160,000 160,000 Cost of Goods Solo 140,000 WIP - Assembly Department 140,000 ZWIP-Assembly Department 140,00040.000 D. costof Goods Sold includes

1. Which type of company is most likely to use a process costing system? A. Construction company B. Accounting firm C. Chemical producer D. Automobile repair sopleted work on 8,000 units, at a cost of $20 per unittion 2. The Assembly Department eted work on 8,0 at a cost of $20 per unit, and 7.000 of sold for $50 each. What is the journal entry to record the transfer of production these units were from the Assembly Department? Debit 160,000 Accounts and Explanations Credit Finished Goods Inventory WIP – Assembly Department WIP- Assembly Department Finished Goods Inventory 160,000160,000 160,000 Cost of Goods Solo 140,000 WIP – Assembly Department 140,000 ZWIP-Assembly Department 140,00040.000 D. costof Goods Sold includes

Expert Answer

 

1. Answer: Option C. Chemical producer

Process costing is mostly used when there is mass production of similar or identical goods. Hence the same is most likely to be used by a chemical producer.

2. Answer: Option A.

Dr. Finished Goods Inventory $160,000

Cr. WIP – Assembly Department $160,000

(8000 units x $20)

B, C, and D are incorrect.

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