Exam 17: Process Costing

The weighted-average process costing method assigns the cost of the earliest equivalent units available to units completed and transferred out,and the cost of the most recent equivalent units worked on during the period to ending work-in-process inventory.

Which of the following is false concerning an operations-costing system?

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?

Transferred-in costs incurred in a previous department and charged to a subsequent department

It is possible to design a hybrid costing system,to combine elements of both job costing and of process costing.

Brampton Ltd.uses an automated process to manufacture key chains.For September,the company had the following activities: Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process.There is no spoilage. Required: Prepare a production cost worksheet using the FIFO 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 total amount credited to the Townsend Company Work-in-Process account during the month of April?

Use the information below to answer the following question(s). Hollywood North Magic,a cosmetic manufacturer,began operations in January.During the first month of operations,$60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January,30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process. -What is the materials cost per unit in January using the FIFO method?

Process costing is extremely useful when there are a variety of products produced,as compared to the production of a single product.

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: -Using standard costs simplifies the calculations for which of the following in process-costing?

Which of the following is false concerning equivalent units?

Use the information below to answer the following question(s). Hollywood North Magic,a cosmetic manufacturer,began operations in January.During the first month of operations,$60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January,30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process. -Which of the following items is not a component of "total costs to be accounted for in a given department's operations" when using process costing?

Smithers Ltd.uses the FIFO method for its production costing.On June 1,it had 35,000 units in beginning work in process that were 60% complete with respect to conversion costs.During the month it completed 80,000 units and on June 30,there were 16,000 units in ending work in process.These units were 35% complete with respect to conversion.Direct materials are added at the beginning of the process and no units are lost during production.The costs associated with the beginning inventory were $83,300 for direct materials and $66,780 for conversion.During the month,Smithers issued $146,400 of direct materials and incurred $206,720 of conversion costs. Required: Prepare a production cost worksheet using the FIFO method.

Answer the following questions using the information below: Dustin Plastics,Inc. ,manufactures plastic moldings for car seats.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. Data for Department A for February 2015 are: Costs for the Department A for February 2015 are: -What is the material cost per equivalent unit in Department A?

Which costing system is well-suited for companies which have infrequent changes in their basic products?

Use the information below to answer the following question(s). Hollywood North Magic,a cosmetic manufacturer,began operations in January.During the first month of operations,$60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January,30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process. -Bag Company had a beginning inventory of 4,000 bags with costs of $18,000 on January 1.The direct materials were complete and all overhead had been assigned;however,only 40 percent of direct manufacturing labour was added in the prior period.Another 20,000 units were started and completed during the current period.Bag Company uses FIFO process-costing and calculated equivalent unit costs as follows: materials,$8.00;labour,$9.00;and overhead,$5.00. What is the total cost of goods transferred out using the FIFO method?

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?

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

Calendar Time Company prints calendars.All direct materials are included at the inception of the printing process.There were 20,000 units in beginning inventory with a direct material cost of $1,000 in March.Direct materials totalled $26,000 for the month.work-in-process records revealed that 160,000 calendars were started in March and that a total of 144,000 were completed.Ending work-in-process units are complete in respect to direct materials costs and contain no labour and overhead costs.The weighted-average method is used by Calendar Time. Required: a.Determine the equivalent units of materials. b.What are the material costs assigned to completed calendars? c.What amount of materials is assigned to the ending work-in-process inventory?

Equivalent units measure output in terms of the physical quantities of each of the inputs (factors of production)that have been consumed by the units.