Exam 4: Process Costing

Reference: 04-07 The information below was obtained from the records of the first processing department of Moore Company for the month of May. The company uses the weighted-average method in its process costing system. Units Labour and Overhead (Percentage Complete) Work in process, May 1 10,000 40\% Units started 64,000 Completed and transferred out 60,000 Work in process, May 31 14,000 70\% All materials are added at the beginning of the process. -The equivalent units of production for labour and overhead for the month of May were

Reference: 04-11 The following data relate to the Forming Department of Jimbob Co. for a recent month: Number of Units Conversion Costs (Percent Complete) Beginning work in process inventory 9,000 60\% Units started into production 45,000 - Units completed and transferred out 46,000 - Ending work in process inventory 8,000 25\% All materials are added prior to the beginning of work in the Forming Department. -Assuming that Jimbob Co. materials would be?

David Company uses the weighted-average method in its process costing system.

Sarver Company uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March. Units Percentage complete Beginning work in process inventory 7,100 70\% Transferred in from the prior department during March 61,000 Ending work in process inventory 4,600 30\% The Fitting Department's production report indicates that the cost per equivalent unit for conversion cost for March was $8.24. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?

Materials Conversion Cost Work in process, beginning \ 8,000 \ 6,000 Current added during January \ 40,000 \ 32,000 Equivalent units of production 100,000 95,000 Cost per equivalent unit \ 0.48 \ 0.40 Units completed and transferred to the next department 90,000 units Work in process, ending 10,000 units Materials are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. What cost would be recorded for the ending work in process inventory?

Lucas Company uses the weighted-average method in its process costing system.

In process costing, the same equivalent units figure is always used for both materials and conversion costs.

Using the first-in-first-out (FIFO)method, the material and conversion costs in opening work in process at the beginning of a period are considered in determining the costs per equivalent unit for that period.

In a processing system where labour costs represent a significant portion of total processing costs, it may be useful to track the three categories of processing costs separately - materials, labour and manufacturing overhead costs.

Instead of using a job cost sheet, production reports are prepared for each department (or process)to accumulate costs of production and to account for units worked on.

In the accounting for costs in a process costing system, which statement below is most correct as to when costs are added in processing departments?

Reference: 04-08 Information about units processed and processing costs incurred during a recent month in the Blending Department of a manufacturing company follow: Number of Units Conversion Costs (Percent Completion) Beginning work in process inventory 11,000 35\% Units started into production 120,000 - Units completed and transferred out 114,000 - Ending work in process inventory 17,000 30\% The beginning work in process inventory included $11,000 of conversion cost and $ 12,000 in material costs. During the month, the Department incurred an additional $290,000 in conversion costs and $ 143,000 in material costs. All materials are added at the beginning of production in each department. -Assuming that the company uses the weighted-average cost method, what are the equivalent units of production for conversion costs for the Blending Department for the month?

Assuming that there was no beginning work in process inventory, and the ending work in process inventory is 50% complete with respect to conversion costs, the number of equivalent units of production with respect to conversion costs under the weighted-average method would be?

In process costing, costs are accumulated in processing departments, rather than by job.

Job-order costing is used in manufacturing companies and process costing is used in service firms.

Process costing would be appropriate for each of the following except

In a sequential manufacturing system (all units produced flow in the same direction through all departments), the production report of the final department will include all manufacturing costs of units produced.

Reference: 04-12 GK Manufacturing had inventory at May 1 of 5,000 units which were 70% complete as to conversion costs. The May 1 inventory had total costs of $ 69,900 which included $ 21,500 direct materials, $ 38,775 direct labour and $ 9,625 factory overhead. Costs added to work in process in May were as follows: Direct materials \ 298,800 Direct labour \ 540,800 Factory overhead \ 135,400 During May, 49,200 units were completed, including those in inventory on May 1. On May 30, the inventory of work in process consisted of 5,600 units which were 3/8 completed as to conversion costs. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process. -What were the equivalent units of production for conversion costs for May

Glo Co., a manufacturer of combs, uses the weighted-average method in its process costing system. The company sold 125,000 units during the month of April. There is only one processing department. The following additional information is provided: Inventory at April 1: Work in process None Finished goods 37,500 units Inventory at April 30: Work in process (75\% complete as to conversion costs) 8,000 units Finished goods 30,000 units What were the equivalent units of production for conversion costs for April?

In a process cost system, transferred-in costs represent