Exam 4: Process Costing

Laurant Corporation uses the first-in, first-out method in its process costing system. Department A is the first stage of the company's production process. The following information is available for conversion costs for the month of May for Department A: The equivalent units of production for conversion costs for the month is closest to:

Jersey Corporation has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was:

The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for". The "Costs accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the costs added during the period.

Salmont Corporation uses the first-in, first-out method in its process costing system. The company reported 30,800 equivalent units of production for materials last month. The company's beginning work in process inventory consisted of 8,000 units, 75% complete with respect to materials. The ending work in process inventory consisted of 6,000 units, 80% complete with respect to materials. The number of units started during the month was:

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,600 units. The costs and percentage completion of these units in beginning inventory were: A total of 9,300 units were started and 8,200 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 cost per equivalent unit for materials for the month in the first processing department is closest to:

Kurtulus 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 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.)

Puri 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: What are the equivalent units for materials for the month in the first processing department?

Romain Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees.The total Surgery Department cost after service department allocations is closest to:

Under the weighted-average method, the cost of units transferred out of a department is computed as follows for a cost category:

Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be:

Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:1. Construction company that builds office buildings2. Winery that produces a number of varietal wines3. Cement manufacturer4. Mushroom farm that produces the standard button mushroom in caves5. Aluminum refiner that makes aluminum ingots from bauxite oreRequired:For each company, indicate whether the company is most likely to use job-order costing or process costing.

Sumptuous Beer Corporation manufactures beer in two departments, Fermenting and Bottling. In the Fermenting Department, ingredients are placed in a large vat and fermented for three days. The beer is then transferred over to Bottling where it is further purified and bottled. Sumptuous uses a first-in, first-out process cost system to collect costs in both departments. On May 1, the Fermenting Department had 32,000 gallons (units) in process. These gallons were 100% complete with respect to materials (ingredients) and 80% complete with respect to conversion cost. During May, Fermenting started an additional 460,000 gallons into production. On May 31, Fermenting had 18,000 gallons in work in process. These gallons were 100% complete with respect to materials and 60% complete with respect to conversion cost.What are the Fermenting Department's equivalent units (gallons) of production related to conversion costs for May?

Greenham Corporation uses the weighted-average method in its process costing. The following data pertain to its Materials Preparation Department for November. Required:Determine the equivalent units of production for the Materials Preparation Department for November using the weighted-average method.

Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,850 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $8,160. An additional 90,700 units were started into production during the month and 93,700 units were completed in the Welding Department and transferred to the next processing department. There were 14,850 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $204,100 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

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 cost per equivalent unit for conversion costs for the first department for the month is closest to:

Owens Corporation uses a process costing system. For March, the beginning work in process inventory consisted of 60,000 units that were 60% complete with respect to processing. The ending work in process inventory for the month consisted of units that were 20% complete with respect to processing. A summary of unit and cost data for the month follows: Assuming that Owens Corporation uses the weighted-average method, which of the following is closest to the cost per equivalent unit for processing cost for March?

A job-order costing system would be best suited for production of a large quantity of a homogeneous product.

Activities in the Sargent Corporation's Assembly Department for the month of March follow: Using the first-in, first-out method, the equivalent units for conversion for March would be:

Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,800 units were started and 7,100 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 85% complete with respect to materials and 70% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?

In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $12,000. During the month, $404,000 of costs were added to production and the cost of units transferred out from the department was $426,000.In the department's cost reconciliation report for June, the total cost accounted for would be: