Exam 17: Process Costing

Use the information below to answer the following question(s).Canadian Oil Company manufactures cooking oils.All direct materials are added at the beginning of the production process.The company currently uses the FIFO method.Data for the month of July is listed below. -What is the amount of direct materials assigned to ending work-in-process?

Process-costing journal entries and job-costing journal entries are similar with respect to direct materials and conversion costs.

Use the information below to answer the following question(s).Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process. -What is the materials cost per unit in January using the FIFO method?

Four Seasons Company makes snow blowers.Materials are added at the beginning of the process and conversion costs are uniformly incurred.At the beginning of September the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete.Other data for the month include: Beginning work-in-process costs: Required: a.Using the weighted-average method determine the assignment of costs to units transferred-out and ending inventory. b.Prepare journal entries to record transferring of material and conversion costs to work-in-process; and, the cost of the units completed and transferred from processing to finished goods.

The first-in, first-out process-costing method assumes that units in beginning inventory are completed during the current accounting period.

Vita-Heath Company manufactures three different types of vitamins: vitamin C, vitamin B, and vitamin D.The company uses four operations to manufacture the vitamins: mixing, tabletting, encapsulating, and bottling.Vitamins C and B are produced in tablet form (in the tabletting department)and vitamin D is produced in capsule form (in the encapsulating department).Each bottle contains 80 vitamins, regardless of the product.Conversion costs are applied based on the number of bottles in the tabletting and encapsulating departments.Conversion costs are applied based on direct labour hours in the mixing department.It takes two minutes to mix ingredients for a 80-unit bottle for each product.Conversion costs are applied based on machine hours in the bottling department.It takes one-tenth of a minute of machine time to fill a 80-unit bottle, regardless of product.Vita-Health Company uses operation costing.The company is planning to complete one batch of each type of vitamin in March.The budgeted number of bottles and expected direct material cost for each type of vitamin is as follows: The budgeted conversion costs for March are as follows: Required: 1.Calculate the conversion cost rates for each department.2.Calculate the budgeted cost of goods manufactured for vitamin C, vitamin B, and vitamin D for the month of March.3.Calculate the cost per 80-unit bottle for each type of vitamin for the month of July.

The weighted average method of process costing assigns the cost of equivalent units worked on during the current period first to complete beginning inventory, next to start and complete new units, and finally to units in ending work-in-process inventory.

Answer the following questions using the information below: The Rest-a-Lot chair company manufacturers a standard recliner.During February, the firm's Assembly Department started production of 75,000 chairs.During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department.The firm ended the month with 10,000 chairs in ending inventory.There were 15,000 chairs in beginning inventory.All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process.The FIFO method of process costing is used by Rest-a-Lot.Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.Beginning inventory: Manufacturing costs added during the accounting period: -How many of the Rest-a-Lot company units that were started during February were completed during February?

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 is the total amount debited to the work-in-process account during the month of June at Father Time Clock Shop?

The first-in, first-out method computes unit costs by

An operation-costing system is a hybrid costing system, applied to batches of similar products.

Answer the following questions using the information below: The Rest-a-Lot chair company manufacturers a standard recliner.During February, the firm's Assembly Department started production of 75,000 chairs.During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department.The firm ended the month with 10,000 chairs in ending inventory.There were 15,000 chairs in beginning inventory.All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process.The FIFO method of process costing is used by Rest-a-Lot.Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.Beginning inventory: Manufacturing costs added during the accounting period: -What is the Rest-a-Lot company amount of direct materials cost assigned to ending work-in-process inventory at the end of February?

Use the information below to answer the following question(s).Apex Disk Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were presented for August: -Which costing system is well-suited for companies which have infrequent changes in their basic products?

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 amount of conversion costs are assigned to ending work-in-process for June at Father Time Clock Shop?

General Fabricators assembles its product in several departments.It has two departments that process all units.During October, 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 $12,000 for materials and $3,000 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 75% complete as to conversion.Direct materials are added at the end of the process.Beginning inventories included $16,000 for transferred-in costs and $20,000 for conversion costs.Ending inventory was 25% complete.Additional information about the two departments follows: Required: Prepare a production cost worksheet using weighted-average for the cutting department and FIFO for the finishing department.

Operation-costing captures the non-financial impact of the control of physical processes.

Use the information below to answer the following question(s).Reynolds Dock Company manufactures boat docks 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 the assignment of conversion costs to work-in-process inventory, and the conversion-cost variances of the Assembly Department assuming that conversion costs are 20% higher than expected?

In the weighted-average costing method, the costs of direct materials in beginning inventory are not included in the cost per unit calculation since direct materials are almost always added at the start of the production process.

Operating personnel must be able to estimate the percentage of work-in-process completed in process costing.

Equivalent units in beginning work in process plus equivalent units of work done in the current period equals equivalent units completed and transferred out in the current period minus equivalent units in ending work in process.