Exam 20: Process Costing

The Work-in-Process Inventory account of a department is credited when overallocation of manufacturing overhead occurs in that department.

The ________ account is credited to adjust for underallocated overhead costs.

Delaware,Inc.purchased raw materials worth $300 for cash.The journal entry to record this transaction will include ________.

Organic Sugar,Inc.in Ohio has six processing departments for refining sugar-Affination,Carbonatation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from the month of August for the Decolorization Department are as follows: Metric Tons Beginning Work-in-Process Inventory 0 Transferred in production 13,000 Completed and transferred out to Boiling in August 8,000 Ending Work-in-Process Inventory 5,000 Costs Beginning Work-in-Process Inventory \ 0 Costs added during August Direct materials 2,600,000 Direct labor 1,030,000 Manufacturing overhead \ 00,000 Total costs added during August \ 4,430,000 The ending Work-in-Process Inventory is 100% and 70% complete with respect to direct materials and conversion costs,respectively.Compute the equivalent units of production (EUP)for direct materials and for conversion costs for the month of August.

In most organizations,managers are often rewarded based on how well they meet the budget.

Waterfall 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 a zero beginning balance.During January,43,000 gallons of chemicals were started into production.During the month,34,000 gallons were completed,and 9,000 remained in process,partially completed.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. During January,the Mixing Department incurred $50,000 in direct materials costs and $211,200 in conversion costs.At the end of the month,the ending inventory in the Mixing Department was 60% complete with respect to conversion costs.The weighted-average method is used. The total cost of product in ending inventory was ________.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar.)

Under process costing,the unit cost of the completed units is less than the unit cost of the incomplete units.

During August,the Filtering Department of Union Square,Inc.had a beginning Work-in-Process Inventory balance of 150 units with costs of $55,000.During the month,it started and completed 280 units.It had 30 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in August under the first-in,first-out (FIFO)method?

What are conversion costs? In determining equivalent units of production,why are conversion costs calculated separately from direct materials?

Under the first-in,first-out (FIFO)method,prior period costs are not merged with current period costs.

If a business operates in an industry that experiences significant cost changes,it would be to its benefit to use the first-in,first-out (FIFO)method.

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for the units in the beginning inventory are always 100% complete.

Gizmo Manufacturer,a widgets manufacturing company,divides its production operations into three processes-Department 1,Department 2,and Department 3.The company uses a process costing system.Gizmo incurred the following costs during the year to produce 4,600 units: Department 1 \ 17,500 Department 2 6,000 Department 3 10,000 If Gizmo could sell only 3,600 units in during the year,what will be the cost per unit of widget produced? (Round your answer to the nearest cent.)

Under process costing,the costs incurred by each department are reported in a separate production cost report for each department.

A production cost report can help managers identify the most profitable products.

Under a process costing system,costs of completed products are transferred to the Finished Goods Inventory at the end of the accounting period.

The costs that were incurred in a previous process and brought into a later process as part of the product's cost are called ________ costs.

Under process costing,a single Work-in-Process Inventory account is maintained for all processes,with a subsidiary ledger containing individual production cost reports for each process.

Nevada Manufacturing has two processing departments,Department I and Department II.The raw materials processed at Department I are sent to Department II for further processing.During June,direct materials worth $50,000 purchased on account were assigned to Department I.The journal entry to record the issue of direct materials to production is ________.

The equivalent units of production for direct materials and conversion costs must be the same.