Exam 5: Process Costing

Figure 5-4 The following information is available for Department X for August: Work in progress, August 1 Materials £8,000 Conversion costs £15,000 Costs added during August: Materials £28,000 Conversion costs £25,000 Equivalent units of production (weighted average): Materials 4,000 Conversion 5,000 -Refer to Figure 5-4. Department X's cost per equivalent unit for materials using the weighted average method would be

Conversion costs do NOT include

Unit cost of materials for a department using the FIFO method of process costing is found by taking the total cost of materials issued to the department during the year divided by

Star, Inc., manufactures a product that passes through two processes: mixing and packaging. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for June follows: Work in progress, June 1 : Units (30\% complete) 15,000 Direct materials £4,000 Direct labour £3,000 Overhead £2,376 During June, 100,000 units were completed and transferred to packaging. The following costs were incurred by the mixing department during June: Direct materials £50,000 Direct labour 30,000 Overhead 12,000 At June 30, 8,000 units that were 70 per cent complete remained in the mixing department. Use the weighted average method, and round unit costs to two decimal places. a.Determine equivalent units of production for June. b.Determine June's total costs to account for. c.Determine total cost per equivalent unit of production. d.Determine the cost of goods transferred to the packaging department. e.Determine the cost of June's ending work in progress for the mixing department.

Beginning inventory consisted of 1,000 units with costs of £21,000. All materials and 60 per cent of labour and overhead were added in the prior period. In addition, another 8,000 units were started and completed. Unit costs are materials, £6.00; labour, £15.00; overhead, £9.00. What is the total cost of goods transferred out using FIFO?

Figure 5-1 The Flanders Ltd. produces a product that passes through two processes. During June, the first department transferred 15,000 units to the second department. Materials are added uniformly in the second process. The following information was provided about the second department's operations during June: Units, beginning work in progress $\quad$$\quad$ 5,000 Units, ending work in progress $\quad$$\quad$$\quad$ 7,000 -Refer to Figure 5-1. The Flanders Corporation's units started in the second department during April would be

Figure 5-6 Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for April follows: Work in progress, April 1: Units (35\% complete) 5,000 Direct materials £24,000 Direct labour £30,000 Overhead £10,000 During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: Direct materials £90,000 Direct labour 120,000 Overhead 30,000 Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30. -Refer to Figure 5-6. Kramer's total costs to account for would be

Figure 5-5 The following information is available for Department A for the month of July: Units Cost Work in progress, July 1 ( 60\% complete) 5,000 Direct materials £12,000 Conversion Total work in progress, July 1 £30,000 Started in production during July 20,000 Costs added: Direct materials £36,000 Conversion 52,000 Total costs added during July £88,000 Work in progress, July 31, (40% complete) 2,000 Materials are added at the beginning of the process. (Round to two decimal places.) -Refer to Figure 5-5. Department A's cost per equivalent unit of production for conversion using the weighted average method would be

Figure 5-3 Units Work in progress, May 1 (10\% complete) 2,000 Started in May 17,000 Work in progress, May 31 (20\% complete) 3,000 Materials and conversion are incurred uniformly throughout the progress. -Refer to Figure 5-3. Units started and completed using the weighted average method would be

Figure 5-7 The Corn Ltd. produces a product that passes through two processes. During April, the first department transferred 40,000 units to the second department. The cost of the units transferred was £60,000. Materials are added uniformly in the second process. The following information was provided about the second department's operations during April: Units, beginning work in progress $\quad$$\quad$ 8,000 Units, ending work in progress $\quad$$\quad$$\quad$ 11,000 -Refer to Figure 5-7. Units started in the second department during April for Corn Ltd. would be

Figure 5-3 Units Work in progress, May 1 (10\% complete) 2,000 Started in May 17,000 Work in progress, May 31 (20\% complete) 3,000 Materials and conversion are incurred uniformly throughout the progress. -Refer to Figure 5-3. The total units of production to be accounted for would be

Figure 5-6 Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for April follows: Work in progress, April 1: Units (35\% complete) 5,000 Direct materials £24,000 Direct labour £30,000 Overhead £10,000 During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: Direct materials £90,000 Direct labour 120,000 Overhead 30,000 Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30. -Refer to Figure 5-6. Kramer's cost of goods transferred to the molding department during April would be

Simplicity is the main advantage of which of the following process costing methods?

If costs of manufacturing inputs fluctuate from period to period, which of the following methods is more useful for cost control?

In a process used by Kane Company, conversion cost is incurred uniformly throughout the process. Material is added at the end of the process. Which of the following statements is true?

Figure 5-3 Units Work in progress, May 1 (10\% complete) 2,000 Started in May 17,000 Work in progress, May 31 (20\% complete) 3,000 Materials and conversion are incurred uniformly throughout the progress. -Refer to Figure 5-3. Equivalent units of production for conversion using the weighted average method would be

The following amounts were selected from the production report of Chandon Corporation: Actual units in production 42,000 Equivalent units (materials) 42,000 Equivalent units (conversion) 39,000 Cost per equivalent unit (materials) £1.10 Cost per equivalent unit (conversion) £0.90 Chandon uses the weighted average method in preparing its production reports. Chandon's total production cost to be accounted for must have been

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

Dedo Company purchased £4,000 of raw materials and used £3,750. The entry to record the requisition of direct materials for the Mixing Department would be A) Raw Materials 3,750 Work in Progress--Mixing Department 3,750 B) Materials Expense 4,000 Raw Materials 4,000 C) Work in Progress--Mixing Department 3,750 Raw Materials 3,750 D) Work in Progress--Mixing Department 4,000 Raw Materials 4,000

Figure 5-3 Units Work in progress, May 1 (10\% complete) 2,000 Started in May 17,000 Work in progress, May 31 (20\% complete) 3,000 Materials and conversion are incurred uniformly throughout the progress. -Refer to Figure 5-3. Equivalent units of production for materials using the weighted average method would be