Exam 17: Process Cost Systems

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.​ -The journal entry to record the flow of costs into Department 1 during the period for applied overhead is

If 10,000 units that were 40% completed are in process at November 1, 80,000 units were completed during November, and 12,000 were 20% completed at November 30, the number of equivalent units of production for November was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)

On August 1, Jones Corporation's Packaging Department had work in process inventory of 8,000 units that were 75% complete with respect to materials and 30% complete with respect to conversion costs. The cost of these units was $99,525 ($62,000 transferred in from previous departments, $28,775 in materials, and $8,750 in labor and overhead). During August, 125,000 units were transferred into the department. These units had accumulated costs in previous departments of $1,418,560. The Packaging Department incurred costs of $799,225 for materials and $498,010 for conversion costs in August and transferred 131,000 units out of the department. The 2,000 units remaining in ending inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs. Jones uses the weighted average method to cost its inventories.​ a. Compute the cost per equivalent unit for transferred-in costs, materials, and conversion costs. b. Determine the cost of the units transferred out of the department. c. Determine the cost of the ending inventory.

Carmelita Inc. has the following information available: ​ -At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO process cost method. Round cost per unit figures to the nearest cent when calculating total costs.​ The total costs that will be transferred into Finished Goods for units started and completed were

Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period.

Process manufacturing usually reflects a manufacturer that produces small quantities of unique items.

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.​ -The journal entry to record the flow of costs into Department 1 during the period for direct materials is

In a process costing system, indirect materials are charged to Work in Process.

Process manufacturers typically use large machines to process a continuous flow of raw materials into a finished state.

Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period. Assume the company uses FIFO and rounds cost per unit to two decimal places.Direct materials (20,000 at $5)$100,000 Direct labor 142,300 Factory overhead 57,200 -Assuming that all direct materials are placed in process at the beginning of production, the total cost of the departmental work in process inventory at the end of the period is

All of the following are characteristics of a process cost system except

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.​ -The journal entry to record the flow of costs from Department 1 into Department 2 is

The following production data were taken from the records of the Finishing Department for June: ​ -The number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories, is

In applying the first-in, first-out method of costing inventories, if 8,000 units which were 30% completed are in process at June 1, 28,000 units were completed during June, and 4,000 units were 75% completed at June 30, the number of equivalent units of production for June was 33,400.

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information about July's activities is as follows: ​ -Using the FIFO method, the number of equivalent units for conversion costs was

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 units at $8)83,200 Direct labor 63,000 Factory overhead 25,000 -All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. The total cost of 3,600 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places) is

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received 67,000 liters from the Purifying Department. During the period, the Bottling Department completed 65,000 liters, including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How many liters were started and completed during the period?

Department W had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to Department X from Department W during the period; and 1,800 units were one-half completed at the end of the period. Assume the completion ratios apply to direct materials and conversion costs.​ -The equivalent units of production used to compute unit conversion cost on the cost of production report for Department W, assuming the company uses FIFO, are

Conversion and direct materials are generally both added at the end of the production process.

On March 1, Upton Company's Packaging Department had work in process inventory of 8,820 units, which had been transferred in from the Finishing Department. These units had accumulated costs of $315,000 in previous departments and $16,000 for conversion costs in the Packaging Department.​ During March, 30,000 units were transferred into the department. These units had accumulated costs of $770,000 in the previous departments. The Packaging Department incurred $54,000 in conversion costs during the month. On March 31, 700 units remained in ending inventory. These units were 80% complete with respect to conversion costs.​ Compute the cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using the weighted average method.