Exam 20: Process Costing

Ellie's Candies,Inc.produces gummy bears.The company purchases raw materials,stores them in a warehouse,and then runs them through two processes: production and packaging.During September,the production process incurred the following costs in processing 20,000 gummy bears: Wages of workers operating production equipment \ 52,500 Manufacturing overhead allocated to the production department 8,000 Direct materials 400,000 Use the FIFO method to compute the September conversion costs in the Production Department.

In a process costing system,a department's total production costs incurred in a particular period must equal the total costs transferred out of the department.

Ten Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials were assigned to the two production departments: $280,000 to Department I and $300,000 to Department II.During the period,$8,000 of indirect materials were used in production.Provide the journal entry to record this transaction.

Jetwell,Inc.incurred $2,000 for indirect labor in Department III.The journal entry to record indirect labor utilized is ________.

WSP Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,40,000 fl.oz.of chemicals were started in production.Of these,32,000 fl.oz.were completed and 8,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. At the end of the month,WSP calculated equivalent units.The ending inventory in the Mixing Department was 60% complete with respect to conversion costs.With respect to conversion costs,how many equivalent units were calculated for the product that was completed and for ending inventory?

Tobin Sugar,Inc.has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process,and materials are added at the beginning of each process.Data from August for the Recovery Department are as follows: Metric Tons Beginning Work-in-Process Inventory 3,000 Transferred In 18,500 Ending Work-in-Process Inventory 6,500 In August,15,000 metric tons were completed and sent to the Packaging Department.The ending Work-in-Process Inventory was 50% complete with respect to conversion costs.Prepare a production cost report for the Recovery Department to show the equivalent units for direct materials and conversion costs.The weighted-average method is used.

Under process costing,the number of units to account for must always be ________ the number of units accounted for.

In a production cost report,________ includes the number of units completed and transferred out of a process and the number of units remaining in ending WIP.The weighted-average method is used.

The Assembly Department of Fallon,Inc.,manufacturer of computers,had 2,000 units of beginning inventory in September,and 3,000 units were transferred to it from the Production Department.The Assembly Department completed 1,500 units during the month and transferred them to the Packaging Department.Calculate the total number of units to account for by the Assembly Department.

A predetermined overhead allocation rate is used to allocate direct materials costs to various processes or departments.

Which of the following businesses is most likely to use a process costing system?

For each of the following statements,indicate whether the statement applies to Job Order Costing Systems (JO)or Process Costing Systems (PC). JO or PC The company manufactures homogeneous products through a series of uniform steps or processes. Cost transfers are made when each job is completed. There are separate Work-in-Process Inventory accounts for each department. A job sheet is prepared for each job. Cost transfers are made at the end of the accounting period.

Ego Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2,000 gallons of partially processed product in production.During January,34,000 gallons were transferred in from the Mixing Department,and 32,000 gallons were completed and transferred out.At the end of the month,there were 4,000 gallons of partially processed product remaining in the Refining Department.See additional details below. Refining Department,beginning balance at January 1 Quantity: 2,000 units (partially processed) Cost: \ 15,600 of costs transferred in \ 4,500 of materials cost of conversion cost total account balance Costs added during January Cost of units transferred in \ 222,400 Direct materials cost \ 93,750 Conversion cost \ 45,000 Refining Department,ending balance at January 31 Quantity: 4,000 units (partially processed) Percent complete for materials cost: 90\% Percent complete for conversion cost: 70\% What was the cost per equivalent unit with respect to conversion costs for the Refining Department in the month of January? (Use the weighted-average method,and round your calculations to the nearest cent.)

Peterson Enterprises manufactures picture frames.Its production operations are divided into two departments - Assembly and Finishing.The company uses a process costing system.Peterson incurred the following costs during the year to produce 5,600 picture frames: Assembly \ 9,800 Finishing \ 1,650 If Peterson can only sell 5,800 picture frames during the year,what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent.)

Costs assigned to goods sold are transferred to the Cost of Goods Sold account from the ________.

PM Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,37,000 fl.oz.of chemicals were started in production.Of these,30,000 fl.oz.were completed,and 7,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process.The weighted-average method is used. At the end of the month,PM calculated equivalent units in the Mixing Department as shown below: EQUIVALENT UNITS Equivalent Units Equivalent Units Units accounted for Direct Materials Costs Conversion Costs Completed and transferred but 30,000 30,000 30,000 Ending work-in-process* * Percent complete for direct materials costs: 100% Percent complete of completion for conversion costs: 60% During January,the Mixing Department incurred $50,000 in direct materials costs and $213,400 in conversion costs.How much was the cost per equivalent unit for materials and for conversion costs? (Use the weighted average method and round your answer to the nearest cent.)

At the start of June,the Polishing Department of John's Counters,Inc.had 15,000 units in beginning inventory that were 100% complete with respect to direct materials and conversion costs.During the month,it received 25,000 units from the Machining Department.It started and completed 17,000 units and transferred 32,000 units to the Packaging Department.It had 8,000 units in ending Work-in-Process Inventory.Direct materials are added at the beginning of the process.Units in beginning Work-in-Process Inventory were 50% complete in respect to conversion costs.Units in ending Work-in-Process Inventory were 40% complete with respect to conversion costs. Prepare the production cost report for the Polishing Department for the equivalent units of production for the month of June.Use the FIFO method.

A textile manufacturing company is most likely to use job order costing to arrive at the cost per unit of textile manufactured and sold to customers.

Black Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials worth $33,000 purchased on account were assigned to Department I.At the end of the year,when the production cost report for Department I was prepared,Black Hills assigned $50,000 to the units transferred from Department I to Department II.The journal entry to record the transfer of units to Department II will ________.

When finished products are sold,Cost of Goods Sold is debited and Finished Goods Inventory is credited.