Exam 17: Process Costing

Compare and contrast process costing and job order costing.

Cedar Rapids Chemical placed 220,000 liters of direct materials into the mixing process.At the end of the month, 10,000 liters were still in process, 30% converted as to labour and factory overhead.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Cedar Rapids Chemical uses weighted-average costing.Required: Determine the equivalent units in process for direct materials and conversion costs, assuming there was no beginning inventory.

Caulfield Ltd.has two production departments in the manufacturing of its products.In the first department, Fabricating, component parts are manufactured.In the second department, Assembly, the components are assembled and finished.Direct materials are added at the start of production in Fabricating and at the 90% point of the process in Assembly.During July the beginning work-in-process of 50,000 units in the Fabricating Department was 40% complete with respect to conversion.The Assembly Department had 38,000 units in beginning work in process; these units were 85% complete with respect to conversion.On July 31, the ending work-in-process inventory was 20% complete in the Fabricating Department and 40% complete in the Assembly Department.Conversion costs are added evenly throughout both departments.Beginning work-in-process in the Fabricating Department had costs assigned of $290,000 for direct materials and $52,000 for conversion.In the Assembly Department, the beginning work in process included $318,440 for transferred-in costs and $8,550 for conversion costs.Additional information about the two departments follows: Required: Determine the assignment of costs to units transferred-out and ending inventory , using weighted-average for the Assembly Department and FIFO for the Finishing Department.

The first-in, first-out process-costing method computes unit costs by confining equivalent units to work only done during the current period.

When using the weighted-average method, work completed in beginning work-in-process and work done during the current period are included in the

The Wooden Toy Factory has two departments that process all of its production, the Parts Production Department and the Finishing Department.Production begins in the Parts Production 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 50 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.

When identical or similar units of products or services are mass produced, job-costing is used to calculate an average production cost for all units produced.

Transferred in costs are costs which have been incurred in a preceding department.

Scarborough Chemical placed 440,000 litres of direct materials into the mixing process.At the end of the month, 20,000 litres were still in process, 30 percent converted as to labour and factory overhead.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Scarborough Chemical uses weighted-average costing.Required: a.Determine the equivalent units in process for direct materials and conversion costs assuming there was no beginning inventory. b.Determine the equivalent units in process for direct materials and conversion costs assuming that a beginning inventory of 24,000 litres of chemicals were 40 percent complete as to conversion costs prior to the addition of the 440,000 litres.

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 actual units remain in ending work-in-process, assuming a FIFO cost flow assumption?

Which of the following manufactured products should use process costing?

The Parson Valve Corporation was recently formed to produce a brass valve that forms an essential part of a compressor 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.September is Parson's first month of operations, and therefore, there was no beginning inventory.Direct materials cost for the month totaled $1,400,000, while conversion costs equaled $1,800,000.Accounting records indicate that 800,000 valves were started in September and 700,000 valves were completed.Ending inventory was 20% complete as to conversion costs.Required: a.What is the total manufacturing cost per valve for September? b.Allocate the total costs between the completed valves and the valves in ending inventory.

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 conversion cost per equivalent unit in June at Father Time Clock Shop?

Treated Lumber Company specializes in processing treated wood.All direct materials are included at the inception of the sawing process and conversion is applied at the end of the process.For December there was no beginning inventory in the sawmill.Direct materials totalled $399,750 for the month and conversion costs totalled $165,000.work-in-process records revealed that 75,000 boardmetres were started in December and that 55,000 boardmetres were completed.Ending work-in-process units are complete only in respect to direct materials costs.Required: a.What is the total manufacturing cost per equivalent unit (boardmetres)for December? b.What are the costs assigned to completed boardmetres in December? c.What are the costs transferred out during December? d.What are the amounts assigned to December's ending work-in-process inventory?

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: -How many units were completed and transferred out of the Assembly Department during March?