Exam 4: Process Costing

In a process costing system, manufacturing overhead cost is also called conversion cost.

Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied.The total Finishing Department cost after allocations is closest to:

The information below was obtained from the records of one of the departments of Cushing Corporation for the month of August. The company uses the first-in, first-out method in its process costing system. All materials are added at the beginning of the process.The equivalent units for materials for the month of August are:

Nabais Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below: What were the equivalent units for conversion costs in the Lubricating Department for October?

Daosta Incorporated uses the first-in, first-out method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Required: Using the first-in, first-out method:a. Determine the equivalent units of production for materials and conversion costs.b. Determine the cost per equivalent unit for materials and conversion costs. (Round your final answers to 2 decimal places.)c. Determine the cost of ending work in process inventory.d. Determine the cost of units transferred out of the department during the month.

Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and Information Technology costs are allocated second on the basis of Personnel costs.In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Medicine Department is closest to:

In process costing, the equivalent units computed for materials is generally the same as that computed for conversion costs.

All of the following statements are correct when referring to process costing except:

In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $13,000. During the month, $414,000 of costs were added to production and the cost of units transferred out from the department was $436,000.In the department's cost reconciliation report for January, the cost of beginning work in process inventory for the department would be:

Casas Corporation has two service departments, Personnel and Cafeteria, and two operating departments, Customer Care and Customer Solutions. The number of employees in each department are: The fixed costs of the Personnel Department are allocated on the basis of the number of employees. If these costs are budgeted at $42,570, the amount of Personnel Department cost allocated to the Cafeteria under the step-down method would be closest to:

Vallin Manufacturing Corporation's beginning work in process inventory consisted of 8,500 units, 100% complete with respect to materials cost and 60% complete with respect to conversion costs. The total cost in the beginning inventory was $41,000. During the month, 45,000 units were transferred out. The equivalent unit cost was computed to be $3.00 for materials and $3.50 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:

Bachelet Incorporated uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Required:Using the weighted-average method:a. Determine the equivalent units of production for materials and conversion costs.b. Determine the cost per equivalent unit for materials and conversion costs.c. Determine the cost of units transferred out of the department during the month.d. Determine the cost of ending work in process inventory in the department.

Jublot Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The cost per equivalent unit for materials for the month in the first processing department is closest to:

Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: Costs in the Personnel Department total $168,283 per year.Suppose the company uses the step-down method and Personnel Department costs are allocated first. The amount of the Personnel Department cost allocated to the Engineering Department would be closest to:

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: A total of 6,500 units were started and 5,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Holling Incorporated uses the weighted-average method in its process costing. The following data concern the company's Mixing Department for the month of December. Required:Compute the cost per equivalent unit for materials and conversion for the Mixing Department in December.

Merced Corporation has a process costing system and uses the first-in, first-out method. For May, the company's beginning work in process inventory was 75% complete with respect to conversion, and the ending work in process inventory was 80% complete with respect to conversion. Information on units processed and conversion costs incurred during May follow: The amount of conversion cost in the ending work in process inventory was:

Salmont Corporation uses the first-in, first-out method in its process costing system. The company reported 40,000equivalent units of production for materials last month. The company's beginning work in process inventory consisted of 8,500 units, 40% complete with respect to materials. The ending work in process inventory consisted of 6,500 units, 70% complete with respect to materials. The number of units started during the month was:

Mullins Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The total cost transferred from the first processing department to the next processing department during the month is closest to:

In February, one of the processing departments at Brandstetter Corporation had beginning work in process inventory of $24,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $249,000. The company uses the first-in, first-out method in its process costing system.In the department's cost reconciliation report for February, the costs added to production in the department would be: