Exam 3: Process Costing

The manufacturing cost that is transferred from one production process to another (for example,from production to packaging)is called the:

To reconcile the number of physical units using the weighted average method of process costing,one must determine whether the units were:

Hamilton,Inc.manufactures units in two processes: Production and Finishing.All direct materials are added at the beginning of the Production process,while conversion costs are incurred evenly throughout the period for both Production and Finishing.Hamilton employs three inspectors: Kasey,Chad,and Lexi.Kasey inspects direct materials before they are added to Production (two pieces of direct materials per unit).Chad inspects units when the Production process is finished,after which they are immediately transferred to Finishing.Lexi inspects units at the end of the Finishing process.This period,none of the materials or units failed inspection.At the beginning of the period,5,000 units had only "Inspected by Kasey" tags on them (these units were 70% complete),and 2,000 units had "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 60% complete).At the end of the period,7,000 units had only "Inspected by Kasey" tags on them (these units were 50% complete).1,000 units had only "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 90% complete),and 19,000 units had tags from all three inspectors on them (these units were 100% complete).In the Finishing Department,Hamilton incurred $38,000 in direct materials costs and $76,000 in conversion costs in the current period.Beginning Work in Process Inventory for the Finishing Department carried a value of $4,000 in direct materials and $3,600 in conversion costs. Required: Using the weighted average method,determine the number of physical units: a.in beginning Work in Process in Production during the period. b.started in Production during the period. c.transferred from Production to Finishing during the period. d.in ending Work in Process in Production during the period. e.in beginning Work in Process in Finishing during the period. f.in ending Work in Process in Finishing during the period. g.completed in Finishing during the period. Using the weighted average method,determine the number of equivalent units: h.for direct materials for Production i.for conversion for Production j.for direct materials for Finishing k.for conversion for Finishing Using the weighted average method,determine the cost per equivalent unit: l.for direct materials for Finishing m.for conversion for Finishing

Under the FIFO method,physical units must be broken down into:

An equivalent unit is a measure used to convert costs incurred in the previous period to costs incurred in the current period.

The total cost of Work in Process incurred in one department during the period must be allocated between costs transferred to the next department and costs transferred to Finished Goods.

Brody Corp.uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory for January consisted of 1,300 units that were 40% completed.13,000 units were started into the process during January.On January 31,the inventory consisted of 650 units that were 70% completed.What would be the equivalent units for conversion cost using the weighted average method?

At its highest level,the production report provides what?

An equivalent unit is calculated by:

Prepare the journal entries to record each of the following transactions for Jason Co. a.Purchased $40,000 of raw materials on credit. b.Issued $37,600 of raw materials into production. c.Paid $28,000 cash in production labor costs. d.Incurred $30,000 of actual overhead costs,paid in cash. e.Applied $27,000 of overhead cost. f.Completed 6,600 units with a cost of $13.50 per unit. g.Sold on account 6,000 units at $18.00 per unit.The cost of the units sold was $(fill in)________. h.Disposed of any over- or under-applied overhead cost.

Sierra Co.has provided the following information: Using the weighted average method of process costing,complete each of the following: a.How many units were completed and transferred to Finished Goods? b.Calculate equivalent units. c.Calculate cost per equivalent unit.Round your answers to four decimal places. d.What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount. e.Calculate the cost of the ending Work in Process.Round your answer to a whole dollar amount.

Caston Corp.uses a FIFO process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory for January consisted of 1,000 units that were 40% completed with respect to conversion costs.10,000 units were started into the process during January.On January 31,the inventory consisted of 500 units.Equivalent units for conversion costs were 10,450.What percentage complete was the ending inventory on January 31 with respect to conversion costs?

Which of the following is not a step in preparing a production report?

Vista Co.has provided the following information: Using the weighted average method of process costing,complete each of the following: a.How many units were completed and transferred to Finished Goods? b.Calculate equivalent units. c.Calculate cost per equivalent unit.Round your answers to four decimal places. d.What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount. e.Calculate the cost of the ending Work in Process.Round your answer to a whole dollar amount.

Complete the following chart by reconciling the number of physical units for each department using the weighted-average method.

The key difference between a process costing production report prepared using one of the two acceptable methods is how they deal with any units and costs that are in ending Work in Process Inventory.

Under the FIFO method,the units completed during the period must be allocated between beginning units in process and units started and completed.

Which of the following relationships is correct?

Livingston Co.uses process costing to account for the production of elastic bands.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs.April costs were $72,000 for materials and $80,000 for conversion costs.During April 8,000 units were completed.Ending work in process inventory was 4,000 units (100% complete for materials,50% for conversion).The cost per equivalent unit for conversion costs using the weighted average method would be:

Stangol Co.uses process costing to account for the production of highlighter pens.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Cost per equivalent unit has been calculated to be $8.80 for conversion costs and $7.1667 for materials.12,000 units were worked on during the period.Ending inventory still in process was 4,000 units (100% complete for materials,50% for conversion).The value of ending inventory using the weighted average method would be closest to: