Exam 21: Process Costing

Many U.S. firms are switching to JIT processing because

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Cinder Company had the following department information for the month: Total materials costs \ 60,000 Equivalent units of materials 10,000 Total conversion costs \ 90,000 Equivalent units of conversion costs 20,000 How much is the total manufacturing cost per unit?

The Molding Department of Kennett Company has the following production data: beginning work in process 25000 units (60% complete) started into production 475000 units completed and transferred out 450000 units and ending work in process 50000 units (40% complete). Assuming materials are entered at the beginning of the process equivalent units for materials are:

Equivalent units of production measure the work done during the period expressed in fully ________________ units.

Benson Industries uses a process cost system. Products are processed first by Department A second by Department B and then they are transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October: Costs of units transferred in \ 120,000 Manufacturing costs added in Department B: Direct materials \ 50,000 Direct labor 12,000 Manufacturing overhead 19,000 \ 81,000 Total costs charged to Department B in October \ 201,0000 The cost of work in process in Department B at October 1 is $25000 and the cost of work in process at October 31 has been determined to be $30000. Instructions Prepare journal entries to record for the month of October: (a) The transfer of production from Department A to B. (b) The manufacturing costs incurred by Department B. (c) The transfer of completed units from Department B to the finished goods warehouse.

In the month of June a department had 20000 units in beginning work in process that were 70% complete. During June 90000 units were transferred into production from another department. At the end of June there were 10000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June were

Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process.

Activity-based costing (ABC) eliminates arbitrary assignments of overhead.

The Molding Department of Boswell Company has the following production data: beginning work process 40000 units (60% complete) started into production 730000 units completed and transferred out 690000 units and ending work in process 80000 units (40% complete). Assuming conversion costs are incurred uniformly during the process the equivalent units for conversion costs are:

Rework costs typically increase in just-in-time processing.

A primary driver of overhead costs in continuous manufacturing operations is:

The Slicing Department production process shows: Beginning Work in Process 10,000 Ending Work in Process 50,000 Total units to be accounted for 180,000 How many units were started into production in Department 1?

Muffy Painting Company has the following production data for March. Instructions Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process.

The Nitrogen Fixation Department of Tomco Company began the month of December with beginning work in process of 4000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 12000 units. Ending work in process contains 10000 units that are 100% complete as to materials and 40% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December.

Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

In the month of June a department had 20000 units in beginning work in process that were 70% complete. During June 90000 units were transferred into production from another department. At the end of June there were 10000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?

A company that produces motion pictures would likely use a process cost system.

Lawrence Leather Goods recently instituted just-in-time management of its inventories. The accounting department carefully modified all its reports to reflect these changes. Required: Prepare a short memo to production department managers briefly explaining the primary changes they will see on the production cost report.

In a process cost system labor costs incurred may be captured on time tickets.