Exam 20: Process Costing

How is a production cost report prepared using the FIFO method?

In process costing,production costs are accumulated by process.At the end of the period,the total production costs incurred must be split into two components.What are these two components?

During September,the Filtering Department of Davis,Inc.had a beginning Work-in-Process Inventory of 700 units with costs of $135,000.During the month,it started and completed 700 units.It had 240 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 September under the first-in,first-out (FIFO)method?

Effects 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 4,000 gallons of partially processed product in production.During January,30,000 gallons were transferred in from the Mixing Department,and 30,000 gallons were completed and transferred out.At the end of the month,4,000 gallons of partially processed product remained in the Refining Department.See additional details below. Refining Department,ending balance at January 31 Percent completed for materials cost: $\quad 94 \%$ Percent completed for conversion cost: $75 \%$ What was the total number of equivalent units of production for conversion costs for the month of January for the Refining Department?

A cellular phone manufacturer is more likely to use a process costing system rather than job order costing.

When raw materials are purchased on account,the Accounts Payable account is credited.

The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________.

The equivalent units of production for transferred in units are always 100% because ________.

Babson Sugar,Inc.has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from August for the Decolorization Department are as follows: Metric Tons Beginning Work-in-Process Inventory 0 Transferred in 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 2,500,000 Direct labor 1,150,000 Manufacturing overhead Total costs added during August \ 4,300,000 The ending Work-in-Process Inventory is 100% and 65% complete with respect to direct materials and conversion costs,respectively.The weighted-average method is used.Compute the cost per equivalent unit for the units transferred to the Boiling process.(Round any intermediate calculations and your final answer to two decimal places.)

A report prepared by a processing department for equivalent units of production,production costs,and the assignment of those costs to the completed and in-process units is called a(n)________.

Production cost reports prepared using first-in,first-out (FIFO)method determine the average cost of equivalent units of production by combining beginning inventory costs with current period costs.

Which of the following is a step in the preparation of a production cost report?

Both job order costing and process costing ________.

The Assembly Department of One Roof,Inc.,manufacturer of computers,incurred $280,000 in direct material costs and $80,000 in conversion costs.The equivalent units of production for direct materials and conversion costs are 1,500 and 800,respectively.The cost per equivalent unit of production (EUP)for conversion costs is ________.(Round your answer to the nearest cent.)

Under a process costing system,product costs are accumulated with respect to jobs completed.

Winnie,Inc.has two processes-Coloring Department and Mixing Department.The company assigned $300,000 to the 3,500 gallons of paint transferred from Mixing Department to Finished Goods Inventory.The journal entry to record completion of processing is ________.

Which of the following formulas is used to calculate the cost per equivalent unit of production (EUP)for direct materials? The weighted-average method is used.

List five ways in which managers use a production cost report to make decisions for their companies.

The Refining Department of Sweet Sugar,Inc.had 80,000 tons of sugar to account for in July.Of the 80,000 tons,49,000 tons were completed and transferred to the Boiling Department,and the remaining 31,000 tons were 75% complete.The materials required for production are added at the beginning of the process.Conversion costs are added equally throughout the refining process.Calculate the total equivalent units of production for direct materials.

Joywell,Inc.has four processing departments and follows a process costing system.It incurred $150,000 in machinery depreciation and $60,000 in indirect costs that were paid in cash.Provide the journal entries to record these transactions.