Exam 5: Process Costing

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

What is the definition of spoilage in regard to process costing?

Speakeasy Co. manufactures podiums. Production consists of three processes: cutting, assembly, and finishing. The following costs are given for May: Cuttine Assembly Finishine Direct materials Direct labour 3,000 14,000 2,000 Applied averhead 4,000 5,000 6,000 There were no work in process inventories and 1,000 podiums were produced. -Refer to the figure.What would be the journal entry to assign costs to the Assembly process?

What costing system accumulates production costs by process and uses a work-in-process account for each process?

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

Ring Company produces two types of product: Small and Large. Two work orders for two batches of the products are shown below, along with some additional cost information: Small Large Work Order 10 Work Order 11 Direct materials (actual costs) \ 45,000 \ 75,000 Applied conversion costs: Mixing ? ? Cooking \ 12,000 \ 12,000 Bottling \ 10,000 \ 15,000 Batch size (bottles) 5,000 5,000 In the Mixing Department,conversion costs are applied on the basis of direct labour hours.Budgeted conversion costs for the department for the year were $50,000 for labour and $125,000 for overhead.Budgeted direct labour hours were 2,500.It takes three minutes to mix the ingredients needed for each bottle. Small (Work Order 10)and Large (Work Order 11)flow through the Mixing Department first,then through the Cooking and Bottling departments. -Refer to the figure.What is Ring Company's journal entry to record materials used in the Mixing Department for Work Order 10?

Quinn Corporation produces a product that passes through two processes. During October, the first department transferred 20,000 units to the second department. The cost of the units transferred was $60,000. Materials are added uniformly in the second process. The following information is provided about the second department’s operations during October: Units, beginning work in process (1/3 complete) $\quad$$\quad$$\quad$ 6,000 Units, ending work in process ( $1 / 2$ complete) $\quad$$\quad$ 4,000 -Refer to the figure.What are the equivalent units for conversion using weighted average?

How is the material cost per equivalent unit calculated using the weighted average method?

Quinn Corporation produces a product that passes through two processes. During October, the first department transferred 20,000 units to the second department. The cost of the units transferred was $60,000. Materials are added uniformly in the second process. The following information is provided about the second department’s operations during October: Units, beginning work in process (1/3 complete) $\quad$$\quad$$\quad$ 6,000 Units, ending work in process ( $1 / 2$ complete) $\quad$$\quad$ 4,000 -Refer to the figure.What would be the equivalent units for conversion using FIFO?

Tyler Corporation uses JIT manufacturing.There are several manufacturing cells set up within one of its factories.One of the cells makes batteries.The cost of production for the month of July is as follows: Cell labour \ 10,000 Direct materials 25,000 Overhead 20,000 Total \ 55,000 During July,Tyler Corporation produced and sold 500 batteries. a.Why can process costing be used to compute the cost of the batteries? b.Calculate the unit cost of a battery.

Allen Company has the following information for the Assembly Department for October: Materials purchased \ 40,000 Materials used 44,000 Direct labour 30,000 Actual manufacturing overhead 56,000 Cost of goods completed and transferred to the Finishing Dept. 120,000 Overhead rate is 200 percent of direct labour costs. Allen Company uses a process costing system for the Assembly Department. -Refer to the figure.What is the total amount of debits to work in process-Assembly Department for October?

What is the term for the cost assigned to goods from a prior process?

Ely Company had the following data for the current year: Units in process at the begmning of the month 4,000 Units in process at the end of the month 10,000 Units started during the month 40,000 Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion. -Refer to the figure.What is the number of units completed and transferred out during the period?

Xi Corporation produces a product that passes through two departments.For July,the following equivalent unit schedule was prepared for the first department: Materials Conversion Units completed 180,000 180,000 Units, EWIP fraction complete: 10,000\times100\% 15,000 10,000\times40\% -- 6,000 Equivalent units of output 195,000 186,000 Costs assigned to beginning work in process: Materials: \5 1,000 Conversion \2 4,750 Manufacturing costs incurred during the month: Materials: \5 6,250 Conversion \4 5,000 a.Compute the unit cost for July using the weighted average method. b.Determine the cost of goods transferred out. c.Determine the cost of ending work in process.

Franklin Company manufactures a product that passes through two processes: Mixing and Moulding.All manufacturing costs are added uniformly in the Mixing Department.Information for the Mixing Department for October follows: Work in process, October 1: Units ( 35 \% complete) 7,500 Direct materials \3 6,000 Direct labour \4 5,000 Overhead \1 5,000 During October,37,500 units were completed and transferred to the Moulding Department.The following costs were incurred by the Mixing Department during October: Direct materials \ 135,000 Direct labour 180,000 Overhead 45,000 There were 3,750 units that were 80 percent complete remaining in Mixing at October 30.What are the equivalent units of production using the weighted average method?

Which of the following is characteristic of spoilage?

Champ Inc. manufactures a product that passes through two processes: mixing and moulding. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for October follows: Wark in pracess, Octaber 1 : Units ( 35 \% complete) 7,500 Direct materials \3 6,000 Direct labour \4 5,000 Overhead \1 5,000 During October,26,750 units were completed and transferred to the Moulding Department.The following costs were incurred by the Mixing Department during October: Direct materials \ 133,050 Direct labour 180,000 Overhead (applied) 45,000 -Refer to the figure.There were 3,750 units that were 80 percent complete remaining in Mixing at October 31.What is the cost of goods transferred to the Moulding Department during October using the FIFO method?

Square Deal Company makes carpenter’s squares and uses a process costing system. There is no spoilage. Manufacturing goes through three departments: Forming, Finishing, and Packing. Unit data for these departments are given below: Forming Finishing Packing Beginning inventory units (80\% complete) 1,000 2,000 3,000 Units started 8,000 ? ? Ending inventory units (20\% complete) 3,000 4,000 1,000 The Finishing Department adds materials at the point where processing is 50 percent complete. -Refer to the figure.What are the equivalent units for materials in the Finishing Department? $\text { Weighted Average } \quad \quad \quad \text { FIFO }$

What costing system uses job-order costing to assign material costs and process costing to assign conversion costs?

Irvin Corporation’s Mixing Department began January with 10,000 gallons of product (40 percent completed) in process. During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed). -Refer to the figure.If materials were added at the beginning of the process,how many equivalent units of production for conversion costs would there be for Irvin using the FIFO costing method?