Exam 17: Process Costing

Transferred-in costs are an allocated indirect cost in process costing.

It is possible to design a hybrid costing system, to combine elements of both job costing and of process costing.

Calendar Time Company prints calendars.All direct materials are included at the inception of the printing process.There were 20,000 units in beginning inventory with a direct material cost of $1,000 in March.Direct materials totalled $26,000 for the month.work-in-process records revealed that 160,000 calendars were started in March and that a total of 144,000 were completed.Ending work-in-process units are complete in respect to direct materials costs and contain no labour and overhead costs.The weighted-average method is used by Calendar Time.Required: a.Determine the equivalent units of materials. b.What are the material costs assigned to completed calendars? c.What amount of materials is assigned to the ending work-in-process inventory?

Creative Colors Paint Company placed 315,000 litres of direct materials into the mixing process.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Creative Colors uses weighted-average costing.The initial forecast for the end of the month was to have 75,000 litres still in process, 15% converted as to labour and factory overhead.Required: a.Determine the total equivalent units (in process and transferred out)for direct materials and for conversion costs, assuming there was no beginning inventory. b.With the installation of a new paint processing filtration device, the forecast for the end of the month was to have 50,000 litres still in process, 70% converted as to labour and factory overhead.In this event, determine the equivalent units (in process and transferred out)for direct materials and for conversion costs, assuming there was no beginning inventory.

Answer the following questions using the information below: The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line.Its' costing system uses two cost categories, direct materials and conversion costs.Each tractor must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Townsend Tractor uses weighted-average costing. -What are the Townsend Company equivalent units for direct materials and conversion costs, respectively, for April?

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 material cost per equivalent unit in Department A?

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: -What is the balance in ending work-in-process inventory?

The Leather Factory has two departments that process all of its production, the Tanning Department and the Finishing Department.Production begins in the Tanning Department, then the units are transferred to the Finishing Department.Conversion costs are added evenly throughout the process, no additional materials are added in the Finishing Department.Beginning work-in-process in the finishing department was 60 percent complete as to conversion; ending inventory was 30 percent complete.Additional information about the Finishing Department follows: Beginning work-in-process costs: Required: Using the weighted-average method determine the assignment of costs to units transferred-out and ending inventory for the Finishing Department.Round costs per equivalent unit to the nearest cent.

List and describe the five steps in process costing.

Process-costing systems separate costs into cost categories according to which factor(s)?

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. -Calculate the equivalent units for conversion costs in January using the FIFO method.

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 direct materials cost per equivalent unit during June at Father Time Clock Shop?

When a bakery transfers goods from the Baking Department to the Decorating Department, the accounting entry is

Process costing is extremely useful when there are a variety of products produced, as compared to the production of a single product.

Process-costing systems separate costs into cost categories according to the timing of when costs are introduced into the process.

The president of the Gulf Coast Refining Corporation wants to know why his golfing partner, who is the chief financial officer of a large construction company, calculates his costs by the job, but his own corporation calculates costs by large units rather than by individual barrel of oil.

Universal Industries operates a division in Brazil, a country with very high inflation rates.Traditionally, the company has used the same costing techniques in all countries so as to facilitate reporting to corporate headquarters.However, the financial accounting reports from Brazil never seem to match the actual unit results of the division.Management has studied the problem and it appears that beginning inventories may be the cause of the unmatched information.The reason is that the inventories have a different financial base because of the severe inflation.Required:How can process costing assist in addressing the problem facing Universal Industries?

Excalibur Ltd.began operations on October 1 of the current year.Its production requires that direct materials are added at the beginning of the process and conversion costs are incurred uniformly.Direct materials costs for October were $380,000 and conversion costs were $1,750,000.There were 80,000 units started during the month.The ending inventory was 25,000 units which were 60% complete.The cost per equivalent unit for conversion was

Which one of the following methods focuses on the total costs and total equivalent units completed to date?

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 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?