Exam 21: Process Costing

Activity-based costing (ABC) can be used only with process cost systems.

Production costs chargeable to the Sanding Department in July in Magnum Company are $25,000 for materials, $17,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 15,000 for conversion costs. Instructions Compute the unit costs for materials and conversion costs.

An important assumption in using ABC is that:

Wilkinson Company has gathered the following information. Instructions (a) Compute equivalent units of production for materials and for conversion costs. (b) Determine the unit costs of production. (c) Show the assignment of costs to units transferred out and in process.

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.

At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows: Instructions (a) Compute the physical units for July. (b) Compute the equivalent units of production for materials and conversion costs for September.

In the month of June, a department had 12,000 units in beginning work in process that were 70% complete. During June, 48,000 units were transferred into production from another department. At the end of June there were 6,000 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 conversion costs for June were

In a process cost system, unit costs are determined using a

The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 425,000 units, completed and transferred out 400,000 units, and ending work in process 50,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

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

Conversion cost per unit equals $9.00. Total materials costs are $60,000. Equivalent units are 20,000. How much is the total manufacturing cost per unit?

The total units to be accounted for is computed by adding

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

In the month of June, a department had 12,000 units in beginning work in process that were 70% complete. During June, 48,000 units were transferred into production from another department. At the end of June there were 6,000 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?

Zibba Company enters materials at the beginning of the process. In January, there was no beginning work in process, but there were 200 units in the ending work in process inventory. The number of units completed equals the number of

Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 5,000 units of ending work in process at 80% completion and 14,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?

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

In order to compute the physical unit flow, a company must first compute unit production costs.

The Slicing Department production process shows: How many units were started into production in Department 1?

Lowman Painting Company has the following production data for March: $\bullet$ Beginning work in process, 2,000 units $\bullet$ Units transferred out, 42,000 $\bullet$ Units in ending work in process, 8,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs.