Exam 17: Process Costing

What is meant by the term "prime cost pool"?

The Bygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the cell phone manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.June is Bygon's first month of operations, and therefore, there was no beginning inventory.Direct materials cost for the month totaled $743,750, while conversion costs equaled $3,403,000.Accounting records indicate that 425,000 chips were started in June and 395,000 chips were completed.Ending inventory was 50% complete as to conversion costs.Required: a.What is the total manufacturing cost per chip for June? b.Allocate the total costs between the completed chips and the chips in ending inventory.

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: -How many units must be accounted for during the period, assuming a FIFO cost flow assumption?

Use the information below to answer the following question(s).Plastic Molding, Inc.'s costing system 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.Conversion costs are allocated evenly throughout production.Data for the Assembly Department for March are: -What is the unit cost for February in the Assembly Department?

The accounting (for a bakery)entry to record the transfer of rolls from the mixing department to the baking department is:

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. -How many units were started and completed with respect to direct materials during the month?

Standard costing is not possible in a firm that uses process costing.

Ford Motor Company is said to use a hybrid costing system.What is a hybrid costing system, and what would be the advantage to Ford of such a system?

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

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 records the actual Assembly Department's conversion costs for the month assuming conversion costs are 20 percent higher than expected?

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 is the total amount credited to the Townsend Company Work-in-Process account during the month of April?

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.June is Zygon's first month of operations, and therefore, there was no beginning inventory.Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000.Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed.Ending inventory was 50% complete as to conversion costs.Required: a.What is the total manufacturing cost per chip for June? b.Allocate the total costs between the completed chips and the chips in ending inventory.

Jackson Ltd.uses an automated process in its manufacturing operations.On September 1, the company had 15,000 units in beginning work in process which were 60% complete with respect to conversion.During the month of September, it started 100,000 into production.On September 30, there were 20,000 units in process, which were 30% complete with respect to conversion.Direct materials are added at the beginning of the process, and no units are spoiled in production.The beginning inventory had direct materials costs of $135,900 and conversion costs of $38,500.During the month, the company issues $620,000 of direct materials and incurred $199,400 of conversion costs.Required: Prepare a production cost worksheet using the FIFO method.Round equivalent unit costs to the nearest cent.

Conceptually transferred-in costs from another department are similar to

Marv and Vicki own and operate a vegetable canning plant.In recent years their business has grown tremendously and at any point in time they may have 30 to 35 different vegetables being processed.Also, during the peak summer months there are several thousand bushels of vegetables in some stage of being processed at any one time.With the company's growth during the past few years the owners decided to employ an accountant to provide cost estimations on each vegetable category and prepare monthly financial statements.Although the accountant is doing exactly as instructed, Marv and Vicki are confused about the monthly operating costs.Although they process an average of 50,000 canned units a month, the monthly production report fluctuates wildly.Required: Explain how income can fluctuate when sales are relatively stable.

Examples of industries that would use process costing include the pharmaceutical and semiconductor industry.

Which of the following is NOT one of the procedures in process costing?

Regardless of whether previous departments used the weighted-average or the FIFO method, all transferred-in costs during a given period are carried at

Process-costing systems using standard costs usually accumulate actual costs separately from the inventory accounts.

BIG Manufacturing Products has been using FIFO process costing for tracking the costs of its manufacturing activities.However, in recent months the system has become somewhat bogged down with details.It seems that when the company purchased Brown Electronics last year its product lines increased six fold.This has caused both the accountants and the suppliers of the information, the line managers, great difficulty in keeping the costs of each product line separate.Likewise, the estimation of the completion of ending work-in-process inventories and the associated costs has become very cumbersome.The chief financial officer of the company is looking for ways to improve the reporting system of product costs.Required: What can you recommend to improve the situation?