Exam 5: Process Costing

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 total cost per equivalent unit of production using the FIFO method?

What happens when conversion costs are uniform?

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.How many equivalent units for materials would there be using the FIFO method?

When computing equivalent units of production,what is the method that combines partially completed units in beginning inventory with current-period production?

The following information is available: Units in process at the beginning of the month 2,000 Units in process at the end of the month 4,000 Units started during the month 30,000 Materials are added at the beginning of the process. -Refer to the figure.Beginning and ending units were 60 percent converted.How many equivalent units for materials would there be using the FIFO method?

Peck 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 $30,000. 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 $\quad$$\quad$ 4,000 Units, ending work in process $\quad$$\quad$$\quad$ 5,500 -Refer to the figure.What is the number of units started and completed in the second department during October?

The following information pertains to Mack Company: Work-in-process inventory, December 1 (30\% complete) 20,000 units Units transferred in 50,000 units Work-in-process inventory, December 31(60\% complete ) 16,000 units Materials are added at the start of the process. How many equivalent units for materials would there be using the weighted average method?

Which statement is characteristic about service businesses?

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 2,500 units that were 80 percent complete remaining in Mixing at October 31.What is the amount of total costs to account for?

In what way is abnormal spoilage treated differently than normal spoilage?

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 transferred-in the Finishing Department? $\underline{\text { Weighted Average }} \quad \underline{ \text { FIFO }}$

A local post office sorts letters by postal code.During the month of July,200,000 letters were sorted.The cost of sorting includes the following: Direct labour \ 12,000 Overhead 8,000 Total \ 20,000 a.Explain why process costing is appropriate for this operation. b.Calculate the cost per letter for this operation. c.There are no direct materials used for the sorting operation.Is the absence of direct materials typical of services? If not,provide examples of services that use direct materials.