Exam 4: Process Costing

Black Company uses the weighted-average method in its process costing system. company's ending work in process inventory consists of 5,000 units, 80% complete with respect to materials and 50% complete with respect to labour and overhead. If the total dollar value of the inventory is $60,000 and the cost per equivalent unit for labour and overhead is $8.00, the cost per equivalent unit for materials must be?

Reference: 04-06 The information below was obtained from the records of the first processing department of Christine Corporation for the month of July. The company uses the weighted-average method in its process costing system. Units Labour and Overhead (Percentage Complete) Work in process inventory, July 1 20,000 40\% Started during the month 70,000 Completed during the month 80,000 Work in process inventory, July 31 ? 25\% All materials are added at the beginning of the manufacturing process. -The equivalent units of production for labour and overhead for the month are

Reference: 04-01 A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is applied. There was no beginning work in process inventory in the Forming Department in May. The Forming Department began manufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming Department for the month of May were as follows: Direct materials \ 33,000 Conversion costs \ 17,000 A total of 8,000 bats were completed and transferred to the Finishing Department during May. The ending work in process inventory was 100% complete with respect to direct materials and 25% complete with respect to conversion costs. The company uses the weighted-average method of process costing. -The cost of the units transferred to the Finishing Department during May was

Assuming that the company uses the weighted-average cost method, what is the cost per equivalent unit for material costs for the month in the Blending Department

Job-order costing would be more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.

The following journal entry would be made in a process costing system when units that have been completed with respect to the work done in Processing Department Z are transferred from Processing Department Z to Processing Department Y: Work in Process, Department Y Work in Process, Department Z

The Nichols Company uses the weighted-average method in its process costing system. The company recorded 29,500 equivalent units of production for conversion costs for November in a particular department. There were 6,000 units in the ending work in process inventory on November 30, 75% complete with respect to conversion costs. The November 1 work in process inventory consisted of 8,000 units, 50% complete with respect to conversion costs. A total of 25,000 units were completed and transferred out Of the department during the month. The number of units started during November in the department was?

Reference: 04-02 Adam Company uses the weighted-average method in its process costing system. The following information for the Assembly Department was obtained from the accounting records for September (all materials are added at the beginning of the process): Number of Units Labour and Overhead (Percentage Complete ) Work in process inventory, Sept. 1 60,000 15\% Transferred in during the month 105,000 Work in process inventory, Sept. 30 40,000 20\% Transferred In Materials Labour \& Overhead Beginning work in process inventory \ 60,000 \ 30,000 \ 16,000 Cost added during the month \ 115,500 \ 63,000 \ 320,000 -The "Cost to be accounted for" section of the production report for the month will show a total amount equal to?

If a business wishes to track the costs of completing units in beginning work in process, the weighted-average method should be used.

In a process cost system, the cost of completed production in Department 1 is transferred to Department 2 by which of the following entries?

Reference: 04-05 The following data relate to the Blending Department of Tru-Colour Paint Company 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 Blending Department. -Assuming that Tru-Colour Paint Company uses the weighted-average method, the equivalent units of production for conversion costs would be?

The first step in determining the cost of goods completed and ending inventory valuation using process costing is to calculate equivalent units of production.

Overland, Inc. company's work in process inventory on April 30 consists of 25,000 units.

Reference: 04-04 The activity in Nolan Company's Blending Department for the month of April is given below: Number of Units Labour and Overhead (Percentage Complete) Work in process inventory, April 1 8,000 50\% Started into process during the month 50,000 Work in process inventory, April 30 10,000 70\% All materials are added at the beginning of processing in the Blending Department. -The equivalent units of production for labour and overhead for the month, using the weighted-average method, are?

Reference: 04-09 Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: Units Beginning work in process inventory 16,000 Started into production during May 100,000 Completed during May 92,000 Ending work in process inventory 24,000 The beginning work in process inventory was $60 \%$ complete with respect to materials and $20 \%$ complete with respect to conversion costs. The ending work in process inventory was $90 \%$ complete with respect to materials and $40 \%$ complete with respect to conversion costs. The costs were as follows: Conversion Materials Beginning work in process inventory \ 54,560 \ 35,560 Costs incurred during May \ 468,000 \ 574,040 -Using the FIFO method, the equivalent units for materials are closest to

Reference: 04-09 Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: Units Beginning work in process inventory 16,000 Started into production during May 100,000 Completed during May 92,000 Ending work in process inventory 24,000 The beginning work in process inventory was $60 \%$ complete with respect to materials and $20 \%$ complete with respect to conversion costs. The ending work in process inventory was $90 \%$ complete with respect to materials and $40 \%$ complete with respect to conversion costs. The costs were as follows: Conversion Materials Beginning work in process inventory \ 54,560 \ 35,560 Costs incurred during May \ 468,000 \ 574,040 -Using the FIFO method, the total cost of units in ending work in process is ?( Round th? per unit value to the nearest cent and do not round other intermediate calculations )

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 is the total value of the ending work in process inventory in the Blending Department

Reference: 04-03 Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work in process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labour and overhead. The cost per equivalent unit was $2.50 for materials and $6.25 for labour and overhead. -The "Cost to account for" section of the production report for October will show a total amount equal to

Jawson Company uses the weighted-average method in its process costing system. Operating data for the Painting Department for the month of April appear below: Units Percentage complete Beginning work in process inventory 6,300 10\% Transferred in from the prior department during April 65,600 Ending work in process inventory 4,600 70\% What were the equivalent units of production for conversion costs in the Painting Department for April?

If a business has substantial amounts of manufactured inventory, both the first-in-first-out (FIFO)method and the weighted-average method will be very useful in assessing cost control.