Exam 17: Process Costing

The Leather Factory has two departments that process all of its production,the Tanning Department and the Finishing Department.Production begins in the Tanning 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 30 percent complete.Additional information about the Finishing Department follows: 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.

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.

BIG Manufacturing Products has been using FIFO process costing for tracking the costs of its manufacturing activities.However,in recent months the system has become somewhat bogged down with details.It seems that when the company purchased Brown Electronics last year its product lines increased six fold.This has caused both the accountants and the suppliers of the information,the line managers,great difficulty in keeping the costs of each product line separate.Likewise,the estimation of the completion of ending work-in-process inventories and the associated costs has become very cumbersome.The chief financial officer of the company is looking for ways to improve the reporting system of product costs. Required: What can you recommend to improve the situation?

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. -What is the Rest-a-Lot company amount of direct materials cost assigned to ending work-in-process inventory at the end of February?

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 total amount transferred to Department B in February?

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 equivalent units for direct materials at Apex Disk Company using the weighted-average method.

Which of the following is FALSE concerning process costing?

A key feature in process costing is that

Process-costing journal entries and job-costing journal entries are similar except for the multiple work-in-process accounts in the job-costing system.

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 direct materials cost per equivalent unit during June at Father Time Clock Shop?

The final result of the process costing procedure is to compute the dollar amount of the credit to a work-in-process account and the corresponding debit to finished goods and/or other work-in-process accounts.

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 are the Townsend Company equivalent units for direct materials and conversion costs,respectively,for April?

The final step of the accounting for processes with respect to process costing is to

The primary difference between job costing and process costing is the extent of averaging used to compute unit costs of products or services.

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 amount of direct materials costs are assigned to the Townsend Company ending Work-in-Process account for April?

The first-in,first-out method computes unit costs by

Use the information below to answer the following question(s). Reynolds Dock Company manufactures boat docks on an assembly line.Its standard costing system utilizes 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 October 2016 are: -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 percent less materials than expected?

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer 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.June is Zygon's first month of operations,and therefore,there was no beginning inventory.Direct materials cost for the month totaled $895,000,while conversion costs equaled $4,225,000.Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed. Ending inventory was 50% complete as to conversion costs. Required: a.What is the total manufacturing cost per chip for June? b.Allocate the total costs between the completed chips and the chips in ending inventory.

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 the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete.Other data for the month include: Required: a.Using the weighted-average method determine the assignment of costs to units transferred-out and ending inventory. b.Prepare journal entries to record transferring of material and conversion costs to work-in-process;and,the cost of the units completed and transferred from processing to finished goods.

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