Exam 3: Process Costing

The journal entry to record the sale of goods includes:

Prepare the journal entries to record the following transactions for Kilts & More,a company that produces hand-sewn kilts to Americans celebrating at Irish Festivals around the country. a.Purchased $140,000 of material (3,500 yards)in cash. b.Issued $120,000 of material (3,000 yards)into production. c.Paid $45,000 cash in production labor costs. d.Applied overhead at the predetermined rate of $12 per yard. e.Incurred $42,000 of actual overhead costs,paid in cash.(Assume any difference between actual and applied overhead costs is adjusted directly to cost of goods sold. ) f.Completed 5,000 kilts.(Approximately $51,000 of inventory remains in process,so the cost of each kilt is approximately $______. ) g.Sold 4,500 kilts at $80.00 per unit.(All proceeds were collected in cash. ) h.Disposed of any over- or under-applied overhead cost.

Every unit that passes through the production process must have been counted in which category of physical units at some point?

The process costing production report can be prepared using either the weighted-average method or the last-in,first-out (LIFO)method.

Process costing is used to calculate the cost of homogenous goods or services.

Consider a winery that employs eight people who work 40 hours per week (full time),four people who work 20 hours per week,and one person who works 10 hours per week.How many full-time equivalent employees does the winery employ?

The process costing production report is used to determine how much manufacturing cost to transfer out of Finished Goods Inventory and into Cost of Goods Sold.

Conversion costs consist of:

Cost per equivalent unit is calculated separately for direct materials and for conversion costs.

Under process costing when the product is through the last production process,the journal entry for total manufacturing cost includes a debit to Work in Process Inventory and a credit to Finished Goods Inventory.

Equivalent units for materials may differ from the equivalent units for conversion costs.

TryFit Co.uses process costing to account for the production of energy food bars.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs.April costs were $36,000 for materials and $40,000 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 value of units completed and transferred out using the weighted average method would be closest to:

Which of the following statements is not correct with respect to Fetzer Vineyards' sustainability efforts?

For a firm that uses the weighted average method of process costing,which of the following must be true?

Kramer Corp.began the current period with 4,000 units in process that were 100% complete as to materials and 60% complete as to conversion.Costs of $7,500 in direct materials and $4,700 in conversion costs were incurred in manufacturing those units in the previous period.Kramer ended the current period with 20,000 units completed and 5,000 units still in process.Work in process was 100% complete as to materials and 70% complete as to conversion costs.Kramer incurred $67,500 in direct materials costs,$7,000 in direct labor costs,and $40,000 in manufacturing overhead costs during the period. Required: Using the weighted average method,compute the following: a.Equivalent units of production for materials b.Equivalent units of production for conversion c.Cost per equivalent unit for materials d.Cost per equivalent unit for conversion e.Cost assigned to ending Work in Process Inventory f.Cost assigned to goods completed and transferred out

Under the weighted-average method,the only partially completed units that need to be addressed are the units in beginning inventory.

Complete the following chart by reconciling the number of physical units.The months listed are sequential,and for the same department.

Equivalent units are tracked separately for which two categories of costs?

Sanger 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 1,000 units that were 40% completed.10,000 units were started into the process during January.On January 31,the inventory consisted of 500 units that were 70% completed.What would be the equivalent units for direct materials cost using the FIFO method?

Trout,Inc.prepared the following production report: Additional information: Trout adds direct materials at the beginning of the process,while conversion costs are incurred uniformly throughout the process.At the beginning of the period,Work in Process Inventory was 40% complete.At the end of the period,Work in Process Inventory was 70% complete. Required: Fill in the missing amounts.