Exam 14: Process-Costing Systems

Hybrid- costing systems use a combination of:

Explain what happens in a backflush- costing system when the amount of actual conversion cost in a period exceeds the amount applied to the products completed that period.

Dusty Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: Direct material s added \ 336,000 Direct labor 460,800 Factory overhead 230,200 Total costs to account for \ 1,027,200 There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs.The entry to record the units completed and transferred to Finishing includes a:

Why is "work done in the current period only" a key measurement of equivalent units?

Jimbo Company uses a job- order- cost system and had the following data available: Beginning direct- materials inventory \ 26,000 Beginning WIP inventory 64,000 Beginning finished- goods inventory 58,000 Direct mat erial s purchased on account 148,000 Direct mat erial s requisitioned 82,000 Direct-labor cost incurred 130,000 Fact ory overhe ad incurred 146,000 Cost of goods completed 292,000 Cost of goods sold 256,000 Overhead application rate 125\% (as a percent of direct- labor cost) The journal entry to record the factory overhead costs incurred would include a:

Jake the Snake Company manufactures tape dispensers. Its Assembly department had the following output and costs: Units started and completed 70,000 Started and in process 10,000 These units had all materials added but were only 60% complete as far as conversion costs. Direct materials costs were $480,000; conversion costs were $240,000. The cost of one completed unit in the Assembly department is:

Process costing averages costs over large numbers of nearly identical products.

Equivalent units are computed to assign cost to partially completed units.

The weighted- average process- costing method adds the cost of all work done in the current period to the:

Managers need to know product costs to make ongoing decisions such as which products to emphasize or de- emphasize and the pricing of products.

Summit County Hospital uses a job- cost system for all patients who have surgery. In March, the pre- operating room (PRE- OP) and operating room (OR) had budgeted allocation bases of 4,000 nursing hours and 2,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $168,000 and $132,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $1,200,000 and 15,000 nursing hours for the month. For patient Mr. Spike Smith, actual hours incurred were eight and four hours, respectively, in the PRE- OP and OR rooms. He was in the hospital for 4 days (96 hours). Other costs related to Mr. Spike Smith were: PRE-OP OR In-room Costs Costs Costs Patient medicine \ 200 \ 500 \ 2,400 Direct nursing time 1,000 2,000 3,000 The hospital uses a budgeted overhead rate for applying overhead to patient stays. What is the total cost of the stay of patient Spike Smith?

would be part of the entry to record the sale of goods.

Outlines Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: Work- in- process inventory, June 1 Units 15,000 units Direct materials (100\% complete) \ 34,000 Conversioncosts( 30\% complete) \ 14,000 Units started in June 65,000 units Units completed in June 62,000 units Work-in-process inventory,June 30 18,000 units (100\% complete as to materials and 60\% complete as to conversioncosts) Direct materials added in June \ 285,000 Conversioncostsadded in June \ 210,000 The unit cost for materials is:

Pappa Don's makes frozen pizzas. All direct materials are introduced at the start of the process. Conversion costs are incurred evenly throughout the process. In February there was no beginning WIP inventory, but 485,000 units were started. At the end of February, there were 90,000 units still in process at the 70% stage of completion. Total costs incurred during February amounted to $1,212,500 for materials and $3,664,000 for conversion costs. Compute the following: a. Units completed and transferred b. Equivalent units of materials and conversions c. Cost per equivalent unit of materials and conversion d. Cost of a completed unit

In backflush costing, any remaining balance in the conversion costs account at the end of an accounting period is charged to:

Cable Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: Direct materials added \ 336,000 Direct labor 460,800 Factory overhead 230,200 Total costs to account for \ 1,027,200 There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The cost of a finished unit is:

A document that shows all costs for a particular product, service, or batch of products

Identify which one of the following statements is true.

Vicious Company produces plastic cups in a one- department process. The following information is available: Work-in- process inventory, beginning 0 Unitsstarted 60,000 Units complete and transferred out 48,000 Work-in- process inventory,ending 12,000 Direct materials added \2 40,000 Direct labor \1 65,600 Factory overhead \8 2,800 The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of one completed unit is:

"Job costs are accumulated for purposes of inventory valuation and income determination." State two other purposes.