Exam 20: Process Cost Accounting

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. The total conversion costs transferred out of the Canning Department should be:

Which of the following products is least likely to be produced in a process operations system?

Process and job order manufacturing operations both combine materials,labor,and overhead items in the process of producing products.

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

Using conversion cost per equivalent unit is appropriate for many business that use process costing because:

When direct labor and overhead enter the production process at different rates,it is appropriate to use a conversion cost per equivalent unit.

Direct labor and indirect labor are recorded,respectively,to:

In a process costing system,the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

The fourth step in accounting for production activity in a period is to prepare a cost reconciliation,which reconciles __________________ with the ___________________. Answers must appear in this order.

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August.Minnesota Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00,and the cost per equivalent unit of labor and overhead is $22.00.Compute the cost that should be assigned to the ending Work in Process inventory for August.

In a process costing system,factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor.A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period.Using the weighted-average method,the equivalent units of production with regard to direct labor were:

In a process costing system costs are measured upon completion of each job.

Prepare the required general journal entries to record the following transactions for the Ringer Company. a.Purchased $40,000 of raw materials on account. b.Used $12,000 of direct materials in the production department. c.Used $5,000 of indirect materials.

In process costing,the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

Equivalent units of production refer to the number of units that could have been started and completed given the costs incurred during the period.

During April,the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April.April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor.At the end of April,30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor.The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month.Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

The managers of process operations focus on the series of repetitive processes,or steps,resulting in a noncustomized product or service.

Hybrid systems contain features of both process and job order operations.

Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75.A total of 250,000 units of product were completed and transferred out as finished goods during the month,and 36,000 of equivalent units remained unfinished at the end of the month.The amount that should be reported in Finished Goods Inventory is: