Exam 21: Process Costing

The last department in a production process shows the following information at the end of the period: Beginning Work in Process 25,000 Ending Work in Process 240,000 Total units to be accounted for 50,000 How many units have been transferred out to finished goods during the period?

Conversion cost per unit equals $7.00. Total materials costs are $80000. Equivalent units are 20000. How much is the total manufacturing cost per unit?

A characteristic of products that are mass-produced in a continuous fashion is that

When manufacturing overhead costs are assigned to production in a process cost system they are debited to

Differences between a job order cost system and a process cost system include all of the following except the

Baker Winery manufactures a fine wine in two departments Fermenting and Bottling. In the Fermenting Department grapes are aged in casks for a period of 30 days. In the Bottling Department the wine is bottled and then sent to the finished goods warehouse. Labor and overhead are incurred uniformly through both processes. Materials are entered at the beginning of both processes. Cost and production data for the Fermenting Department for December 2016 are presented below: Production data Beginning work in process (gallons) 5,000 (40\%) Gallons started into production 79,000 Ending work in process (qallons) 8,000 (75\%) Instructions (a) Compute the equivalent units of production. (b) Determine the unit production costs. (c) Determine the costs to be assigned to units transferred out and ending work in process.

Companies often use a combination of a process cost and a job order cost system called operations costing.

A process with 1600 units of beginning work in process completed and transferred out 25000 units during a period. There were 10000 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How much is equivalent units of production for the period for material costs?

It is necessary to calculate equivalent units of production in a department because

The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July $190000 of materials costs and $137100 in conversion costs were charged to the department. The beginning work in process inventory was $93000 on July 1 comprised of $80000 of materials costs and $13000 of conversion costs. Other data for the month of July are as follows: Beginning work in process inventory, 7/1 25,000 units (40\% complete) Units completed and transferred out 70,000 units Ending work in process inventory, 7/31 30,000 units (30\% complete) Instructions Answer the following questions and show computations to support your answers. 1. How many physical units have to be accounted for in July? 2. What are the equivalent units of production for materials and for conversion costs for the month of July? 3. What is the total cost assigned to the 70000 units that were transferred out of the process in July? 4. What is the total cost of the July 31 inventory?

Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process-Fabricating $6030; Work in Process-Finishing $4100; and Finished Goods $5600. During the month the following transactions occurred: 1. Purchased $40000 of raw materials on account. 2. Incurred $75000 of factory labor. Wages are unpaid. 3. Incurred $50000 of manufacturing overhead; $40000 was paid and the remainder is unpaid. 4. Requisitioned materials for Fabricating $10000 and Finishing $8000. 5. Used factory labor for Finishing $60000 and Fabricating $15000. 6. Applied $45000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating. Instructions Journalize the transactions for the month.

Equivalent units of production must be calculated before the unit production costs can be computed.

A process with no beginning work in process completed and transferred out 35000 units during a period and had 14000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs?

Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system. (a) Purchased raw materials for $50000 on account. (b) Raw materials requisitioned for production were: Direct materials Mixing department \2 0,000 Finishing department 14,000 (c) Incurred labor costs of $\$ 74,000$ . (d) Factory labor used: Mixing department \ 44,000 Finishing department 30,000 (e) Manufacturing overhead is applied to the product based on machine hours used in each department: Mixing department-400 machine hours at $30 per machine hour. Finishing department-500 machine hours at $20 per machine hour. (f) Units costing $56000 were completed in the Mixing Department and were transferred to the Finishing Department. (g) Units costing $70000 were completed in the Finishing Department and were transferred to finished goods. (h) Finished goods costing $40000 were sold on account for $55000. Instructions Prepare the journal entries to record the preceding transactions for Lutz Company.

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

White Supplies' total material costs are $30000 and total conversion costs are $20000. Equivalent units of production for materials are 10000 and 5000 for conversion costs. Instructions Compute the unit costs for materials conversion costs and total manufacturing costs for the month.

Materials costs of $1200000 and conversion costs of $1530000 were charged to a processing department in the month of September. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process 20000 units were started into production in September and there were 5000 units in ending work in process that were 40% complete at the end of September. What was the total amount of manufacturing costs assigned to the 5000 units in the ending work in process?

Byrd Company decided to analyze certain costs for June of the current year. Units started into production equaled 14000 and ending work in process equaled 2000 units. With no beginning work in process inventory how much is the conversion cost per unit if ending work in process was 25% complete and total conversion costs equaled $52500?

When there is no beginning work in process and materials are entered at the beginning of the process equivalent units of materials are the same as the units started into production.

The basic similarities between job order cost and process cost systems include all of the following except the