Exam 19: Costing Systems Process Costing

Measures of equivalent production are necessary in process costing because

Use the following information to perform the calculations requested below,assuming that the FIFO 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 started and completed during the month. c.Calculate equivalent units for direct materials. d.Calculate equivalent units for conversion costs.

In a process costing system,the average costing method assumes that cost flows mirror the logical physical flow of production.

The following unit data were assembled for the heating process of Morgan Processing Inc.for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. -The number of equivalent units produced by Morgan Processing with respect to conversion costs is

Stephen Company uses the FIFO method in its process costing system.Beginning inventory in the mixing department consisted of 5,000 units that were 65 percent complete with respect to conversion costs.Ending work in process inventory consisted of 5,000 units that were 70 percent complete with respect to conversion costs.If 12,000 units were transferred to the next processing department during the period,the equivalent units for conversion costs would be

In a process costing system,the equivalent units of production must be computed after determining the value of ending inventory.

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: -Assume that you have calculated a direct materials cost per unit of $5 and a conversion cost per unit of $8.Under this assumption,the ending balance for Work in Process Inventory of Cloud Nine International would be

Direct materials for 8,000 units were added at the beginning of the second process during October.During the month,8,300 units were completed and transferred to the third process.On October 1,there were 600 units in beginning inventory,and on October 31,there were 300 units still remaining in the process.Compute the equivalent units for direct materials for the second process for October using the FIFO costing method.

Total conversion costs for the period include direct materials,direct labor,and overhead.

During October,Department A of Answer Inc.started 320,000 units of product in a particular manufacturing process.The beginning work in process inventory was 50,000 units,and the ending inventory was 30,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 50 percent complete with respect to conversion costs.Department A uses the FIFO costing method. The number of equivalent units for conversion costs of Answer was

Production has just been completed for January 2014 by Colombo Inc.The company utilizes a process costing system,and the following accounting and operating information was obtained from company records: a.Beginning work in process inventory consisted of units totaling 8,200 that were 60 percent complete as of January 1,2014 (all direct materials were added to the units at the beginning of the production process that took place in the preceding month). b.260,000 units were started during January. c.At the end of the month,22,400 units were in work in process inventory and were 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. From the figures shown above,and assuming a FIFO costing flow,prepare in good form a schedule of equivalent production for the month ended January 31,2014.

When the average costing method is used in process costing,all costs incurred by a department or production process are divided by the equivalent units produced during the period to determine the average cost per unit produced.

During April,Department A started 400,000 units of product in a particular production process.The beginning work in process inventory was 40,000 units,and the ending inventory was 50,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 40 percent complete with respect to conversion costs.Department A uses the FIFO costing method. The number of equivalent units produced in Department A with respect to conversion costs were

Which of the following products probably would be produced by a company using a process costing system?

A process costing system accounts for product costs

Use the following data provided by Star Inc.to answer the questions below.The company uses a process costing system. The FIFO costing method is used by the company. -Equivalent units for conversion costs of Star Inc.during the month totaled

Describe how the process costing information is used by managers in every stage of the management process.

In a process cost report,accounting for physical units excludes the physical units in beginning inventory to arrive at "units to be accounted for."

In a process costing system,the amount of total costs to be accounted for is made up of direct materials and conversion costs incurred during the current period plus those costs included in the beginning Work in Process Inventory account.

Processes in a process costing system must incur the same amount of costs.