Exam 5: Process Costing

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

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Question 1

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Urban Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2011 are as follows: Production data: In process, beginning of month (20% converted) 1,000 units Started during February 5,000 units Completed and transferred to finished goods 4,500 units In process, end of month (60% converted) 1,500 units Manufacturing costs: Work in progress, beginning £14,730 Materials £45,000 Direct labour cost £102,960 Factory overhead cost £51,480 Required: Prepare a cost of production report for February 2011. Use FIFO process costing.

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Summary of units in process:
Beginning
1,000
Units started
5,000
In process
6,000
Completed
(4,500)
Ending
1,500
Equivalent units in process:
Materials
Conversion
Units completed
4,500
4,500
Add: Eq. units in end. inv.
1,500
900
Equivalent units in process
6,000
5,400
Less: Eq. units in beg. inv.
1,000
200
Equivalent units manufactured
5,000
5,200
Total costs to be accounted for:
Materials
Conversion
Total
Beginning WIP
£ 14,730
Current costs
£45,000
£154,440
_199,440
Total costs in process
£214,170
Costs per equivalent unit
£9.00
£ 29.70
£38.70
Accounting for total costs:
Transferred out:
Beginning WIP:
Beginning balance
£ 14,730
Add: Conversion (800 * 29.70)
__23,760
£ 38,490
Started and finished (3,500 * 38.70)
_135,450
Total transferred out
£173,940
Ending WIP:
Materials (1,500 *£9.00)
£ 13,500
Conversion (900 *£29.70)
__26,730
Ending WIP
__40,230
Total cost accounted for
£214,170

Equivalent units of production are

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Question 3

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When computing equivalent units of production, the method that combines partially completed units in beginning inventory with current period production is the

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Question 4

If beginning inventory contained 2,000 units of product that were judged to be 40 per cent complete as to labour, the equivalent units of production for labour during the current period under the FIFO method for these 2,000 units are

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Question 5

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?

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Question 6

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

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Question 7

Process costing is complicated by

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Question 8

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

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Question 9

Burgundy Manufacturing uses a process cost system and computes cost using the weighted average method. During the current period, the beginning work-in-progress inventory cost was £13,525. Manufacturing cost added was £57,000. If Burgundy's ending work-in-progress inventory was valued at £15,100, then cost of goods transferred must have been

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Question 10

The Packing Department receives goods produced in previous departments. The costs transferred into the Packing Department are treated as

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Question 11

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

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Question 12

Conversion costs consist of

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Question 13

Beginning inventory for the month contained 2,000 units that were 45 per cent complete with respect to materials. During the month, 18,000 units were completed and transferred out. Ending inventory contained 2,500 units, 20 per cent complete with respect to materials. The weighted average equivalent units of production for materials for the month would be

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Question 14

Conversion costs do NOT include

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Question 15

Lee Company began making lipstick in October 2011 using a single-step process. Lee incurred £42,000 for materials and £48,640 for conversion during the month. There were 21,000 cases of lipstick started in October and 3,000 cases unfinished (40 per cent complete) at the end of the period. All materials were added at the beginning of the production process. What is the unit cost for materials for Lee using the FIFO method?

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Question 16

The following information pertains to Jones Company: Units Work-in-progress inventory, March 1 (30% complete) 20,000 Units transferred in 50,000 Work-in-progress inventory, March 31 (60% complete) 16,000 Materials are added at the start of the progress. How many equivalent units for conversion costs would there be using the FIFO method?

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Question 17

Equivalent production expresses all activity of the period in terms of

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Question 18

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?

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Question 19

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

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Question 20

Showing 1 - 20 of 29

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

Equivalent units of production are

When computing equivalent units of production, the method that combines partially completed units in beginning inventory with current period production is the

If beginning inventory contained 2,000 units of product that were judged to be 40 per cent complete as to labour, the equivalent units of production for labour during the current period under the FIFO method for these 2,000 units are

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

Process costing is complicated by

The Packing Department receives goods produced in previous departments. The costs transferred into the Packing Department are treated as

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

Conversion costs consist of

Conversion costs do NOT include

Equivalent production expresses all activity of the period in terms of

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?

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

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost Assignment

Accounting Entries for a Job Costing System

Joint and By-Product Costing

Income Effects of Alternative Cost Accumulation Systems

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Activity-Based Costing

Pricing Decisions and Profitability Analysis

Decision-Making Under Conditions of Risk and Uncertainty

Capital Investment Decisions: Appraisal Methods

Capital Investment Decisions: the Impact of Capital Rationing, Taxation, Inflation and Risk

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis 1

Standard Costing and Variance Analysis 2: Further Aspects

Divisional Financial Performance Measures

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Management Accounting

Cost Estimation and Cost Behaviour

Quantitative Models for the Planning and Control of Stocks

The Application of Linear Programming to Management Accounting

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