Exam 17: Process Costing

Use the information below to answer the following question(s).Father Time Clock Shop manufactures clocks on an automated assembly line.It utilizes two cost categories: direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.Data for the Assembly Department are: -What are the equivalent units for direct materials and conversion costs at Father Time Clock Shop, respectively?

Activity-based costing has more applicability in a process-costing system than in a job-costing environment.

The primary difference between job costing and process costing is the extent of averaging used to compute unit costs of products or services.

Select the TRUE statement regarding process costing.

Weighty Steel processes a single type of steel.For the current period the following information is given: All materials are added at the beginning of the production process.The beginning inventory was 40% complete as to conversion, while the ending inventory was 30% completed for conversion purposes.Weighty uses the weighted-average costing method.What is the total cost assigned to the units completed and transferred this period?

Costing systems that are used for costing like or similar units of products in mass production are called

In the weighted-average method, costs of units completed and transferred out, and in ending work-in-process, are calculated using average total costs obtained after merging costs of beginning work-in-process and costs added in the current period.

In process costing the end of period journal entry to record $10,000 of ending inventory requires a debit to the ending inventory account and a credit to work-in-process inventory.

Why do we need to accumulate and calculate unit costs in process costing (and also job costing)?

Unit costs do not fluctuate between periods.

Answer the following questions using the information below: Dustin Plastics, Inc., manufactures plastic moldings for car seats.Its costing system uses two cost categories, direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production.Data for Department A for February 2018 are: Costs for the Department A for February 2018 are: -What is the conversion cost per equivalent unit in Department A?

In process costing only the weighted average and FIFO methods are IFRS/ASPE compliant.

How many cushions were started during May at Carnival Furniture?

Use the information below to answer the following question(s).Baylen Company manufactures hydraulic lifts on an assembly line.Its standard costing system utilizes two cost categories; direct materials and conversion costs.Each product must pass through the Assembly Department and the Finishing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Data for the Assembly Department for October 2019 are: -Which of the following journal entries properly records direct materials requisitions for the work-in-process inventory and direct materials variances assuming that the Assembly department used 10 percent less materials than expected?

When there are multiple support departments within an organization, it is common to use journal entries to transfer-in costs from one department to another.What are some of the points to remember about these costs?

Which of the following is false concerning an operations-costing system?

Which of the following assertions is TRUE concerning conversion costs?

The following production-cost worksheet has been prepared for the month of December for BBM Manufacturing Ltd. Assignment of costs: Work in process, ending: Required: Prepare general journal entries for the following: a.Record costs of materials put into process for December. b.Record conversion costs put into process in December. c.Record goods transferred-out to finished goods for December.

Lexington Company produces baseball bats and cricket paddles.It has two departments that process all products.During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials.The beginning inventory included $40,000 for materials and $60,000 for conversion costs.Ending work-in-process inventory in the cutting department was 40% complete.Direct materials are added at the beginning of the process.Beginning work in process in the finishing department was 80% complete as to conversion.Direct materials for finishing the units are added near the end of the process.Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs.Ending inventory was 30% complete.Additional information about the two departments follows: Required: Prepare a production cost worksheet, using FIFO for the finishing department.

The weighted-average process costing method distinguishes between units started in the previous period but completed during the current period and units started and completed during the current period.