Exam 20: Process Costing

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

A production cost report shows only the calculations for the physical flow of products.

The Assembly Department of ZigZag,Inc. ,manufacturer of computers,incurred $280,000 in direct material costs and $70,000 in conversion costs.The equivalent units of production for direct materials and conversion costs are 1,000 and 800,respectively.The cost per equivalent unit of production for direct materials is ________.(Round your answer to the nearest cent. )

The journal entry to record indirect labor costs incurred includes a debit to Manufacturing Overhead and credit to Wages Payable.

The Assembly Department of Smart,Inc. ,a manufacturer of computers,had a beginning inventory of 5,000 units.During November,it assembled 4,000 units and transferred them to the Packaging Department.It incurred $250,000 in direct materials and $75,000 in conversion costs.The ending inventory in November was 3,000 units,which were 100% and 50% complete with respect to materials and conversion costs,respectively.Calculate the total equivalent units of production for conversion costs for November.

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

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.

Powderhouse,Inc.has two processes-Coloring Department and Mixing Department.The company sold 2,000 gallons of paint for $220,000,of which $150,000 was sold on account.The total cost of processing was $385,000 for 5,500 gallons of paint.What are the journal entries to record a sale if the company follows a process costing system?

Productions costs are transferred from one Work-in-Process Inventory account to the next and eventually to ________.

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.

Caldwell,Inc.has two processes-Coloring Department and Mixing Department.The company sold 450 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $80,000 and $90,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead costs incurred amounted to $150,000 at the end of the year.What are the journal entries to record the sale of goods and the adjustment for over/underallocated manufacturing overhead at the end of the year if the company follows a process costing system?

The production cost report for Department 2 shows that $452,000 was assigned to the 57,000 units transferred to Finished Goods Inventory.Cost of goods sold equals $452,000.

Conversion costs include the costs of purchasing and converting raw materials into finished products.

The Assembling Department of Oberon,Inc.had 10,600 units in process on December 1 and received 30,600 units from the Sewing Department.During the month,it completed 20,500 units and transferred them to the Packaging Department.Calculate the number of units accounted for by the Assembling Department for December.The company uses the FIFO method.

Under process costing,the costs incurred by each department are reported in ________.

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

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)________.

Under the first-in,first-out (FIFO)method,the cost of equivalent units of production is calculated by ________.

Story 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,42,000 gallons of chemicals were started into production.During the month,33,000 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 $60,000 in direct materials costs and $250,000 in conversion costs.At the end of the month,the ending inventory in the Mixing Department was 60% complete with respect to conversion costs.First,calculate the equivalent units,then calculate the cost per equivalent unit,and then calculate the total cost of the product that was completed and transferred out during January.The weighted-average method is used. The total cost of product transferred out was ________.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar. )

When finished products are sold,Sales Revenue is debited,and Cost of Goods Sold is credited.