Exam 19: Costing Systems Process Costing

The average costing method matches cost flow with the physical flow of production.

In a process costing system,newest units in the production process are the first to be transferred to the next department.

Equivalent production is also called

The actual physical flow of production will depend on the cost allocation method,such as the FIFO costing method or the average costing method,chosen by the company.

The Bakersfield Company has the following information available: At the beginning of the period,there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,5,800 units were started and completed.Ending inventory contained 400 units that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO process costing method. ) -The cost of completing a unit of Bakersfield during the current period was

Under the average costing method in a process costing system,the costs in beginning inventory are combined with current period costs to compute an average product unit cost.

Coffeeberry Company manufactures a variety of coffee and utilizes a process costing system.The following information was provided by the accounting department as of May 31,2014: a.Units started during the month of May totaled 40,000. b.Units partially complete as of May 31 equaled 8,600. c.Ending work in process inventory as of May 31,2014,was 75 percent complete. d.Direct materials are added at the beginning of the process,and conversion costs are incurred uniformly throughout the process. e.No units were in process on May 1,2014. Using the information provided,compute the equivalent units of production for direct materials and conversion costs for the month ended May 31,2014,assuming a FIFO costing flow.

The computations for costs to be transferred out of Work in Process Inventory are the same regardless of the number and size of the departments involved in the production process.

Which of the following is not included in conversion costs?

Weston Company uses the FIFO method in its process costing system.The first processing department,the Welding Department,started the month with 18,000 units in its beginning work in process inventory that were 50 percent complete with respect to conversion costs.The conversion costs in the beginning work in process inventory were $52,200.An additional 55,000 units were started into production during the month.There were 16,000 units in the ending work in process inventory of the Welding Department that were 20 percent complete with respect to conversion costs.A total of $284,160 in conversion costs were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for the month on the department's process cost report? (Round to three decimal places. )

Which of the following cost flow assumptions most closely follows the logical product flow in a process costing environment?

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 direct materials of Taylor Company are

The use of the FIFO costing method would result in a company's process cost report showing

A process costing system first accumulates the costs of direct materials,direct labor,and overhead for each process and then assigns those costs to the products produced during a particular period.

If a company uses a process costing system to account for costs in its three production departments,how many Work in Process accounts will it use?

In a process costing system,regardless of the cost approach used,cost of beginning inventory is ignored while computing the cost per equivalent unit.

The number of equivalent units for direct materials cost using the FIFO costing procedure is the units in beginning work in process inventory minus units started during the period plus units completed during the period.

Information for the current month for Process B is shown below. Units completed-60,000 Units in ending work in process-6,000 Direct materials are added at the beginning of the process.Beginning work in process is 30 percent complete as to conversion costs;ending work in process inventory is 50 percent complete.The cost of ending work in process inventory totaled

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 direct materials costs is

Equivalent production is a measure of productive output of units for a period of time,expressed in terms of fully completed or equivalent whole units produced.