Exam 5: Process Costing

In a process costing environment, direct materials and direct labor are usually combined into one cost category called "conversion costs."

In a department, 28,000 units are completed and transferred out and 14,400 remain in ending WIP at 85% complete. If an equivalent unit costs $8.00 for direct materials, what is the value of materials transferred out?

The "total physical units accounted for" is the sum of the units completed and transferred out during the period plus the units in beginning WIP Inventory.

The managerial accountant at Print Manufacturing reported a grand opening at the new facility in Virginia. According to the reports, the direct material costs reported in the new operation are $1,750,000 and there are $1,900,000 total conversion costs. The managerial accountant also reported that there were 600,000 parts started in the operations in December and 500,000 parts completed during the month of December. The ending Work In Process Inventory was 30% complete as to the conversion work. Calculate (a)the equivalent units for direct materials and conversion costs; (b)calculate the cost per equivalent unit; and, (c)assign the total costs to units completed and transferred out and ending Work In Process Inventory.

The first step of the 5-step process costing procedure is

At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: What is the cost per equivalent unit for direct materials?

The cost per equivalent unit must be computed for transferred-in costs, as well as direct materials and conversions costs, in a subsequent department.

Indirect labor would not be a component of conversion costs.

Fun Stuff Manufacturing produces ping pong balls using a three-step sequential process that includes molding, coloring and finishing. When the balls and associated costs are transferred from the coloring process to the finishing process, which account is credited?

The costing system used by an oil refinery would be

In a process costing system, costs flow into Finished Goods Inventory only from the Work In Process Inventory of the last process.

Baron Corporation has two sequential processing departments: Assembly and Shaping. The Shaping Department reports the following information. Conversion costs are applied evenly throughout the process. The total cost of units transferred out to Finished Goods Inventory would be closest to

A transfer of $30,000 from the assembly department to the packaging department would require the entry of a

The last step of the 5-step process costing procedure is to summarize the flow of physical units.

A pizza company produces frozen pizzas in three departments: assembly, freezing, and packaging. In assembly, crust ingredients are added at the beginning of the process. After the crust is made, the sauce, cheese, and toppings are added at the end of the process. Conversion costs are added evenly. Data for the assembly department includes: The cost per equivalent unit for crust ingredients would be closest to

Direct materials are often added at a particular point in the production process.

At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: What are the total equivalent units for direct materials?

The following information is provided by Adametz Company: The units in ending WIP Inventory were 80% complete for materials and 50% complete for conversion costs. What are the total equivalent units for direct materials?

Process costing is most likely used in which of the following industries?

The first step of the 5-step process costing procedure is to summarize the flow of physical units.