Exam 19: Costing Systems Process Costing

Trunkey Products Inc.uses a process costing system and has just completed production for the month of November 2014.The following production data were obtained from the accounting records: a.Units in beginning inventory totaled 6,800 and were 30 percent complete as of November 1 (all direct materials were added to these products in the preceding month). b.During the period,156,200 units were started. c.19,200 units were partially completed as of November 30,2014. d.Ending work in process inventory was 40 percent complete at month end. From the data given,compute the equivalent units of production for direct materials and conversion costs for the month ended November 30,2014,assuming a FIFO flow of costs.

Several Work in Process Inventory accounts are used in a process costing system.

Natasha Corporation's Shaping Department had no beginning inventory and completed and transferred to finished goods 920 units during May.Ending inventory for May contained 80 units that were 30 percent complete as to conversion costs and 100 percent complete as to direct materials costs.The charges to the Shaping Department during May were $3,776 for conversion costs and $2,500 for direct materials costs.Compute the cost of work transferred out if Natasha Corporation uses the FIFO costing method.

Under the FIFO costing method,separate unit cost analyses are not used for each accounting period because costs of different periods are averaged.

Use the following information to perform the calculations requested below,assuming that the average costing approach to a process costing system is being used. Beginning work in process inventory: 16,000 units,100 percent complete as to direct materials,85 percent complete as to conversion costs Ending work in process inventory: 36,000 units,100 percent complete as to direct materials,70 percent complete as to conversion costs Units started during the month: 59,000 a.Calculate units to be accounted for during the month. b.Calculate units completed and transferred out during the month. c.Calculate equivalent units for direct materials. d.Calculate equivalent units for conversion costs.

Trunkey Products Inc.uses a process costing system and has just completed production for the month of November 2014.The following production data were obtained from the accounting records: a.Units in beginning inventory totaled 6,800 and were 30 percent complete as of November 1 (all direct materials were added to these products in the preceding month). b.During the period,156,200 units were started. c.19,200 units were partially completed as of November 30,2014. d.Ending work in process inventory was 40 percent complete at month end. From the data given,compute the equivalent units of production for direct materials and conversion costs for the month ended November 30,2014,assuming the company follows average costing method.

Once the products are completed,packaged,and ready for sale,their costs are transferred to the Finished Goods Inventory account.

Cloud Nine International uses a process costing system.Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process.The company uses the average costing method.The following data are available for one of its accounting periods: -Equivalent units for conversion costs of Cloud Nine International are

In a process costing system,unit cost is computed

It is necessary for managers to understand product and cost flow patterns,to use process costing.

The type of product costing system used by a company is dictated by the

Lopez Company uses the FIFO process costing method to determine the product unit cost.The company began the period with 1,800 units in beginning inventory.During the period,32,000 units were started and completed.There were 4,000 units in ending inventory at the end of the period.If all direct materials are added at the beginning of the process,the number of equivalent units for direct materials for the period is

Magic Wizard Inc.uses the FIFO costing method in its process costing system.Beginning inventory in the mixing processing center consisted of 4,000 units,70 percent complete with respect to conversion costs.Ending work in process inventory consisted of 2,000 units,60 percent complete with respect to conversion costs.If 10,000 units were transferred to the next processing center during the period,the equivalent units for conversion costs would be

Because process costing is normally associated with a continuous production flow,products that are in process at the beginning of the period are assumed to be the first products completed during the current period.

Which of the following is related to performing in the management process?

Blackwell Corporation uses a process costing system and has just completed production for the month of December 2014.The following production data were obtained from the accounting records: a.Units in beginning inventory totaled 9,000 and were 80 percent complete as of December 1 (all direct materials were added to these products in the preceding month). b.During the period,216,000 units were started. c.17,400 units were partially completed as of December 31,2014. d.Ending work in process inventory was 100 percent complete with respect to direct materials and 70 percent complete with respect to conversion costs at month end. Using the information provided,compute the equivalent units of production for direct materials and conversion costs for the month ended December 31,2014,assuming a FIFO costing flow.

The Taylor Company uses a process costing system.Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process.The company uses the FIFO costing method.The following data are available for one of its accounting periods -Equivalent units for conversion costs of Taylor Company are

Use the following data of Daylight Incorporation,a company using a process costing system,to answer the questions below. The company uses average process costing method. -Equivalent units for conversion costs of Daylight during the month totaled

Which of the following in a process costing system helps in verifying the cost of ending work in process inventory for a period?

Like job order costing systems,process costing systems are also only suited for companies that produce customized products.