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Chapter 16: Q3QS (page 744)

For each of the following products and services, indicate whether it is more likely produced in a process operation (P) or a job order operation (J).

1. Beach toys

2. Concrete swimming pool

3. iPhones

4. Wedding reception

5. Custom suits

6. Juice

7. Tattoos

8. Guitar picks

Short Answer

Expert verified
  1. P
  2. J
  3. P
  4. J
  5. J
  6. P
  7. J
  8. P

Step by step solution

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01

Explanation of beach toys

Process operations refer to the manufacturing process in which there are multiple activities or processes involved in the production.In case of beach toys, manufacturing the toys involves multiple activities; hence it will be classified under process operation.

02

Explanation of concrete swimming pool

Job operation refers to the manufacturing process in which product is manufactured by considering the requirement and specification of the customers. In the case of concrete swimming pool, the making will vary as per the requirement of the customer; hence it will be related as job operation,

03

 Explanation of iPhones

Manufacturing of iPhones requires multiple activities or process like procurement of raw materials, processing, software part etc., hence will be treated as process operation.

04

 Explanation of wedding receptions

Wedding reception parties are planned as per the requirement of the customer, on which the total cost to be charged is based, hence it is part of job operation.

05

 Explanation of custom suits

Custom suits are made as per the requirements or customizations of the customers; hence it is part of job order.

06

 Explanation of juice

Juice production requires multiple processes such as procurement of raw materials, sorting, processing or extraction of juice, filtrations and so on. Thus, it is a part of process operations.

07

 Explanation of tattoos

Tattoos are made as per the requirements such as type or design of the customers; hence it is a part of job operations.

08

 Explanation of guitar picks

Guitar picks are manufactured with multiple activities, and are produced in large quantities; hence it is part of process operations.

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Most popular questions from this chapter

Dengo Co. makes a trail mix in two departments: roasting and blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. During October, the roasting department completed and transferred 22,200 units to the blending department. Of the units completed, 3,000 were from beginning inventory and the remaining 19,200 were started and completed during the month. Beginning work in process was 100% complete with respect to direct materials and 40% complete with respect to conversion. The company has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. Information on the roasting department’s costs of beginning work in process inventory and costs added during the month follows

Cost

Direct Materials

Conversion

Of beginning work in process inventory

\( 9,900

\) 110,970

Added during the month

248,400

1,082,970

Required

  1. Prepare the roasting department’s process cost summary for October using the FIFO method.
  2. Prepare the journal entry dated October 31 to transfer the cost of completed units to the blending department.

Analysis Component

3. The company provides incentives to department managers by paying monthly bonuses based on their success in controlling costs per equivalent unit of production. Assume that a production department underestimates the percentage of completion for units in ending inventory with the result that its equivalent units of production for October are understated. What impact does this error have on the October bonuses paid to that department’s managers? What impact, if any, does this error have on November bonuses?

List the four steps in accounting for production activity in a

reporting period (for process operations).

Refer to the information in Exercise 16-14. Prepare journal entries dated June 30 to record:

(a) raw materials purchases,

(b) direct materials usage,

(c) indirect materials usage,

(d) direct labor usage,

(e) indirect labor usage,

(f) other overhead costs,

(g) overhead applied, and

(h) payment of total payroll costs.

Refer to the information in QS 16-10. Prepare the November 30 journal entry to record the transfer of units (and costs) from the assembly department to the painting department. Use the weighted-average method.

The focus in a job order costing system is the job or batch.

Identify the main focus in process costing.
See all solutions

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