Exam 21: Process Costing

In the month of April a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $60000 of materials costs and $45000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April 10000 units were completed and transferred to the finished goods inventory and there were 2000 units that were 25% complete in the ending work in process inventory on April 30. During April manufacturing costs charged to the department were: Materials $1380000; Conversion costs $1 530000. The cost assigned to the units transferred to finished goods during April was

Given below are the production data for Department No. 1 for the first month of operation: Costs charged to Department 1: Materials \ 12,000 Labor 2,600 Overhead 15,900 During this first month of operations 4000 units were started into production; 3500 units were transferred out; and the remaining 500 units are 100% completed with respect to materials and 40% complete with respect to conversion costs. Instructions Compute the following: (a) Unit materials cost. (b) Equivalent units of conversion costs. (c) Unit conversion cost. (d) Total cost of 500 units in process at end of month. (e) Total cost of 3500 units transferred out.

Separate _________________ accounts are maintained for each production department or manufacturing process in a process cost system.

Which of the following is a limitation of activity-based costing?

In the month of April a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $60000 of materials costs and $45000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April 10000 units were completed and transferred to the finished goods inventory and there were 2000 units that were 25% complete in the ending work in process inventory on April 30. During April manufacturing costs charged to the department were: Materials $1380000; Conversion costs $1530000. The cost assigned to the units in the ending work in process inventory on April 30 was

In a process cost system unit costs are determined using a

Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

There are no units in process at the beginning of the period 1500 units in process at the end of the period that are 40% complete and 15000 units transferred out during the period. Based on this information there were 14400 equivalent units of production during the period.

Equivalent units for materials total 40000. There were 32000 units completed and transferred out. Equivalent units for conversion costs equal 36000. How much are the physical units for conversion costs if ending work in process is 50% complete?

Madison Industries has equivalent units of 8000 for materials and for conversion costs. Total manufacturing costs are $128000. Total materials costs are $96000. How much is the conversion cost per unit?

Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

In a process cost system units to be accounted for in a department are equal to the

Total physical units to be accounted for are equal to the units

Hanker Company had the following department data on physical units: Work in process, beginning 3,000 Completed and transferred out 18,000 Work in process, ending 2,400 Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?

Romero Company-Perth Division is a new state of the art production facility that manufactures landing gears for airplanes. The September 30th ending work in process is comprised of labor and overhead and is approximately 60% complete. All materials are assumed to be 100% complete. Total materials costs during the period totaled $840000. Instructions As the new plant accountant you are asked to complete the production cost report which appears as follows:

In a process cost system a production cost report is prepared

The total costs accounted for in a production cost report equal the

Dolly's Dream Homes Inc. manufactures doll houses in a continuous process. Various customizing features and furnishings are added at the end of the process to create the various models that are sold. The basic design and floor plans of all the houses are identical however. During the most recent month the lumber used in trimming the houses was inadvertently recorded as direct materials. At month end when the error was discovered Susie Rief the accountant was told by the accounting manager Karen Tate not to bother with correcting the error because the dollar amount of the error was not "worth it." Susie believes that the dollar amount is not as important as the quality of the reports. She wonders whether she would be committing an unethical act if she were to make the changes anyway despite her superior's telling her not to. Required: 1. Who are the stakeholders in this situation? 2. Was it unethical for the company to ask that the error not be corrected? Explain briefly. 3. Would it be unethical for Susie to correct the error? Explain briefly.

Hardy Company manufactures a single product by a continuous process involving two production departments. The records indicate that $140000 of direct materials were issued to and $200000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 5000 in Department 1. Work in process in the department at the beginning of the period totaled $35000; and work in process at the end of the period was $25000. Instructions Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2.

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?