Exam 17: Process Costing

List and describe the five steps in process costing.

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

List and describe the procedures required in process costing from summarizing the physical flow of units through assigning the costs to the completed units and the units in ending inventory.

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.

The cost of units completed can differ materially between the weighted average and the FIFO methods of process costing.

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?

A key feature in process costing is that

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

A company produces baseball bats and cricket paddles, and has two departments that process all products. Direct materials are added at the end of the process; conversion costs are added evenly throughout the process. Beginning work-in-process in the Finishing Department was 80 percent complete as to conversion; ending inventory was 30 percent complete. Beginning inventories for the Finishing Department included $24,000 for transferred-in costs and $28,000 for conversion costs. Additional information is as follows: Required: Using the first-in, first-out method determine the assignment of costs to units transferred-out and ending inventory for the Finishing Department.

An operation-costing system is a hybrid costing system, applied to batches of similar products.

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?

The first-in, first-out process-costing method assumes that units in beginning inventory are completed during the current accounting period.

Marvin Ltd. uses an automated process in its manufacturing operations. On November 1, the company had 25,000 units in beginning work in process which were 80% complete with respect to conversion. During the month of November, it started 120,000 into production. On November 30, there were 20,000 units in process, which were 40% 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 $105,750 and conversion costs of $45,500. During the month, the company issues $510,000 of direct materials and incurred $203,400 of conversion costs. Required: Prepare a production cost worksheet using the FIFO method.

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 the equivalent units for conversion costs using the weighted-average method.

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 conversion cost per equivalent unit in April?

Equivalent units in beginning work in process + equivalent units of work done in the current period equals equivalent units completed and transferred out in the current period minus equivalent units in ending work in process.

A distinctive feature of the FIFO process costing method is that the work done on beginning inventory before the current period is averaged with work done in the current period.

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

Operation-costing captures the non-financial impact of the control of physical processes.