Exam 17: Process Costing

Answer the following questions using the information below: Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system uses 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 May 20X5 are: Costs for May: -Which of the following journal entries properly records direct materials requisitions for the work-in-process inventory and direct materials variances, assuming that the Assembly Department used 10% less materials than expected?

If there was no beginning work in process and no ending work in process under the weighted-average process costing method, the number of equivalent units for direct materials, if direct materials were added at the start of the process, would be:

A distinct feature of the FIFO process-costing method is that the:

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, work in process is 40% complete and at the end of the month it is 60% complete. Other data for the month include: Required: a. Prepare a production cost worksheet with supporting schedules using the weighted-average method of process costing. b. Prepare journal entries to record transferring of materials to processing and from processing to finished goods.

Answer the following questions using the information below: The Daltry 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. Daltry Tractor uses weighted-average costing. Data for the Assembly Department for April 2012 are: Costs for April 2012: -What amount of conversion costs are assigned to the ending Work-in-Process account for April?

Jordana Woolens is a manufacturer of wool cloth. The information for March is as follows: Beginning work in process was half converted as to labor and overhead. Direct materials are added at the beginning of the process. All conversion costs are incurred evenly throughout the process. Ending work in process was 60% complete. Required: Prepare a production cost worksheet using the weighted-average method. Include any necessary supporting schedules.

Which of the following manufactured products would NOT use process costing?

Activity-based costing has less applicability in a process-costing environment because:

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

In companies that produce masses of identical or similar units of output and consequently use process-costing systems, it is relatively easy to set standards and use a standard cost as the cost per equivalent unit.

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 cost of the goods transferred out during February?

Answer the following questions using the information below: The Lumbar Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 150,000 chairs. During the month, the firm completed 170,000 chairs and transferred them to the Finishing Department. The firm ended the month with 20,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Lumbar. -Of the 150,000 units Lumbar started during February, how many were finished during the month?

A hybrid-costing system blends characteristics from both job-costing and process costing systems.

A production cost worksheet is used to summarize total costs to account for, compute cost per equivalent unit, and assign total costs to units completed and to units in ending work-in-process.

The purpose of the equivalent-unit computation is to:

Answer the following questions using the information below: The Morgan Models company manufacturers replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started production of 60,000 models. During the month, the firm completed 66,000 models, and transferred them to the Finishing Department. The firm ended the month with 22,000 models in ending inventory. There were 28,000 models 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 Morgan. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Manufacturing costs added during the accounting period: -What were the equivalent units for conversion costs during October?

Process costing should be used to assign costs to products when the:

A disadvantage of the weighted-average method compared to the FIFO process-costing method is that:

Answer the following questions using the information below: The Morgan Models company manufacturers replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started production of 60,000 models. During the month, the firm completed 66,000 models, and transferred them to the Finishing Department. The firm ended the month with 22,000 models in ending inventory. There were 28,000 models 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 Morgan. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Manufacturing costs added during the accounting period: -How many of the units that were started during October were completed during October?

An operation-costing system is a hybrid-costing system applied to batches of similar, but NOT identical, products.