Answer the following statements true (T) or false (F)
1. The Work-in-Process Inventory account of a department is credited when overallocation of manufacturing overhead occurs in that department. Process costing is used.
2. A predetermined overhead allocation rate is used to allocate direct materials costs to various processes or departments. Process costing is used.
3. The adjusting entry for overallocated or underallocated manufacturing overhead is usually prepared at the beginning of the accounting period. Process costing is used.
4. The production cost report for Department 1 shows that $159,000 was assigned to the 38,000 units transferred to Department 2. This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process—Department 1. Process costing is used
5. The production cost report for Department 1 shows that $154,000 was assigned to the 36,000 units transferred to Department 2. This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process—Department 2. Process costing is used.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
Explanation:
Work-in-Process—Department 2 159,000
Work-in-Process—Department 1 159,000
5. TRUE
Explanation:
Work-in-Process—Department 2 154,000
Work-in-Process—Department 1 154,000
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