Exam 17: Process Costing

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 were the equivalent units of direct materials and conversion costs,respectively,for February? Assume Dustin Plastics,Inc. ,uses the weighted-average process costing method.

Cedar Rapids Chemical placed 220,000 liters of direct materials into the mixing process.At the end of the month,10,000 liters were still in process,30% converted as to labour and factory overhead.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Cedar Rapids Chemical uses weighted-average costing. Required: Determine the equivalent units in process for direct materials and conversion costs,assuming there was no beginning inventory.

Which of the following assertions is TRUE concerning conversion costs?

Lehman Pottery Company manufactures clay molded pottery 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 August 2015 are: Required: Prepare general journal entries to record: 1.The actual Assembly Department's conversion costs for the month assuming conversion costs are 10 percent higher than expected. 2.The assignment of conversion costs to work-in-process inventory,and the conversion-cost variances of the Assembly Department assuming that conversion costs are 10 percent higher than expected. 3.The 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.

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 Townsend Company direct materials cost per equivalent unit during April?

Use the information below to answer the following question(s). Carnival Furniture had 60,000 foam cushions in process at May 1 (70% converted)and 40,000 cushions in process at May 31 (50% converted).All direct materials are added at the beginning of the production process.During the month,140,000 cushions were transferred to finished goods. -What is the Carnival Furniture equivalent units for conversion costs for May using the weighted average method?

The president of the Gulf Coast Refining Corporation wants to know why his golfing partner,who is the chief financial officer of a large construction company,calculates his costs by the job,but his own corporation calculates costs by large units rather than by individual barrel of oil.

When there are insignificant amounts of beginning and ending inventory then the weighted-average and FIFO process costing methods will generate results that are not materially different.

Jackson Ltd.uses an automated process in its manufacturing operations.On September 1,the company had 15,000 units in beginning work in process which were 60% complete with respect to conversion.During the month of September,it started 100,000 into production.On September 30,there were 20,000 units in process,which were 30% 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 $135,900 and conversion costs of $38,500.During the month,the company issues $620,000 of direct materials and incurred $199,400 of conversion costs. Required: Prepare a production cost worksheet using the FIFO method.Round equivalent unit costs to the nearest cent.

Caulfield Ltd.has two production departments in the manufacturing of its products.In the first department,Fabricating,component parts are manufactured.In the second department,Assembly,the components are assembled and finished.Direct materials are added at the start of production in Fabricating and at the 90% point of the process in Assembly.During July the beginning work-in-process of 50,000 units in the Fabricating Department was 40% complete with respect to conversion.The Assembly Department had 38,000 units in beginning work in process;these units were 85% complete with respect to conversion.On July 31,the ending work-in-process inventory was 20% complete in the Fabricating Department and 40% complete in the Assembly Department.Conversion costs are added evenly throughout both departments. Beginning work-in-process in the Fabricating Department had costs assigned of $290,000 for direct materials and $52,000 for conversion.In the Assembly Department,the beginning work in process included $318,440 for transferred-in costs and $8,550 for conversion costs.Additional information about the two departments follows: Required: Determine the assignment of costs to units transferred-out and ending inventory ,using weighted-average for the Assembly Department and FIFO for the Finishing Department.

List and describe the five steps in process costing.

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.

Regardless of whether previous departments used the weighted-average or the FIFO method,all transferred-in costs during a given period are carried at

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 records the actual Assembly Department's conversion costs for the month assuming conversion costs are 20 percent higher than expected?

Surf Products Company uses an automated process to clean and polish its souvenir items.Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process.The following data pertain to March. Required: Using the first-in,first-out method determine the assignment of costs to units transferred-out and ending inventory.

What is the difference between a weighted-average method of process costing and a first-in,first-out method of process costing?

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. -Calculate the equivalent units for conversion costs in January using the FIFO method.

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. -Unit costs of the weighted-average and FIFO methods will differ significantly when

When a bakery transfers goods from the Baking Department to the Decorating Department,the accounting entry is

Amana Woolens is a manufacturer of wool cloth.The information for March is as follows: Beginning work in process was half converted as to labour 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.