Exam 16: Process Costing and Analysis

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the direct materials and conversion costs per equivalent unit.

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August.Minnesota Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00,and the cost per equivalent unit of labor and overhead is $22.00. -Compute the cost that should be assigned to the units that were started and completed during August.

Why is the Process Cost Summary important to management and how does the Process Cost Summary accomplish its purposes?

At the beginning of the month,the Forming Department of Martin Manufacturing had 10,000 units in inventory,30% complete as to materials,and 10% complete as to conversion.During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department.At the end of the month,the department had 8,000 units in inventory,80% complete as to materials and 60% complete as to conversion.How many units did the Forming Department start and complete in the current month?

A company uses a process costing system.Its Weaving Department completed and transferred out 120,000 units during the current period.The ending inventory in the Weaving Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to conversion costs). Determine the equivalent units of production for the Weaving Department for direct materials and conversion costs assuming the weighted average method.

What are the four steps in accounting for production activity in a period?

A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor.A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period.Using the weighted-average method,the equivalent units of production with regard to direct labor were:

In process costing,direct labor includes only the labor that is applied directly to individual units of product.

Luker Corporation uses a process costing system.The company had $160,500 of beginning Finished Goods Inventory on October 1.It transferred in $837,000 of units completed during the period.The ending Finished Goods Inventory balance on October 31 was $158,200.The entry to account for the cost of goods sold in October is:

Conversion cost per equivalent unit is the combined cost of direct labor and factory overhead per equivalent unit.

Which of the following characteristics does not apply to job order cost accounting?

Sparky Corporation uses the FIFO method of process costing.The following information is available for February in its Molding Department: Units: Beginning Inventory: 25,000 units,100% complete as to materials and 55% complete as to conversion. Units started and completed: 110,000. Units completed and transferred out: 135,000. Ending Inventory: 30,000 units,100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850. Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150. -Calculate the cost per equivalent unit of materials.

A company that applies process costing is most frequently characterized by:

Bagger,Inc.uses a process costing system.The following operating and cost data occurred during October: Materials are added at the beginning of the process.Direct labor and overhead are incurred evenly throughout the process.Prepare the October process cost summary assuming the weighted average method of inventory costing.

A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor.These beginning units were completed and another 90,000 units were started during the current period.Of those started,60,000 were finished and the remaining 30,000 were 40% complete at the end of the period.Using the weighted-average method,the equivalent units of production with regard to direct labor were:

In a process costing system,factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Process costing systems use separate Work in Process Inventory accounts for each process.

When the completed goods are sold,the cost of the completed goods are transferred to ________.

Richards Corporation uses the weighted-average method of process costing.The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units,60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units,40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. -Calculate the equivalent units of conversion.

Refer to the following information about the Finishing Department in the Davidson Factory for the month of June.Davidson Factory uses the FIFO method of inventory costing. -Compute the total cost of all units that were completed and transferred to finished goods during June.Compute the total cost of the ending Work in Process inventory.