Exam 6: Process Costing

Equivalent units of output are the complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.

Which of the following method considers the percentage of completion of beginning work in process?

LuLu, Inc. manufactures a product that passes through two processes: mixing and moulding. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for May follows: During May, 25,000 units were completed and transferred to the moulding department. The following costs were incurred by the mixing department during May: Work in process, May 1: Units (35\% complete) 5,000 Direct materials \ 24,000 Direct labour \ 30,000 Overhead \ 10,000 By May 31, 2,500 units that were 80% complete remained in the mixing department. LuLu uses the weighted average method. Direct materials \ 90,000 Direct labour 120,000 Overhead 30,000 -Refer to the Figure.What would be LuLu's cost of May's ending work in process for the mixing department?

Red Manufacturing uses a process cost system to manufacture sensors for the security industry. The following information pertains to operations for the month of October. The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs. Costs pertaining to the month of October area as follows: Beginning inventory costs: materials, $54,560; conversion cost, $35,560. Costs incurred during October: materials used, $468,000; conversion cost, $574,040. -Refer to the Figure.What would be the total cost of the units in the ending work-in-process inventory at October 31 when using the weighted average method?

The M & M Manufacturing Company uses the weighted average method. The beginning work in process consists of 10,000 units (100% completed as to materials and 50% complete as to conversion costs). The number of units completed was 100,000. The ending work in process consists of 15,000 units (100% complete as to materials and 20% complete as to conversion costs). -Refer to the Figure.How many units were started during the period?

Which of the following methods combines partially completed units in beginning inventory with current period production when computing equivalent units of production?

Firms that offer services CANNOT have work-in-process inventories.

Large manufacturing plants,such as chemical,food,and tire manufacturers,use process costing.

Any product or service that is basically homogeneous and repetitively produced can take advantage of a process-costing approach.

Assume conversion costs represent a single category.How many input categories would be typical for a department receiving transferred-in goods?

Which of the following methods considers the percentage of completion of ending work in process?

The M & M Manufacturing Company uses the weighted average method. The beginning work in process consists of 10,000 units (100% completed as to materials and 50% complete as to conversion costs). The number of units completed was 100,000. The ending work in process consists of 15,000 units (100% complete as to materials and 20% complete as to conversion costs). -Refer to the Figure.What were the equivalent units of production for conversion costs?

For which process costing method is simplicity the main advantage?

The FIFO costing method separates work and costs of the equivalent units in beginning inventory from work and costs of the equivalent units produced during the current period.Only current work and costs are used to calculate this period's unit cost.

What type of service firm would not likely use process costing?

The following information is available for Department ABC for the month of September: Materials are added at the beginning of the process. (Round unit costs to two decimal places.) -Refer to the Figure.What would be Department ABC's cost of ending work in process when using the FIFO method?

The Glove Company uses the weighted average method.The beginning work in process consists of 25,000 units (100% completed as to materials and 50% complete as to conversion costs).The number of units completed was 100,000.The ending work in process consists of 15,000 units (100% complete as to materials and 25% complete as to conversion costs).What would be the equivalent units of production for conversion costs?

The following information is available for Department ABC for the month of September: Materials are added at the beginning of the process. (Round unit costs to two decimal places.) -Refer to the Figure.What would be Department ABC's cost per equivalent unit of production for conversion costs when using the FIFO method?

Trush Inc.manufactures a product that passes through two processes: mixing and packaging.All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for July follows: During July,100,000 units were completed and transferred to packaging. The following costs were incurred by the mixing department during July: Work in process, July 1: Units ( 30\% complete) 15,000 Direct materials \ 4,000 Direct labour \ 3,000 Overhead \ 2,376 At July 31,8,000 units that were 70% complete remained in the mixing department. Use the weighted average method,and round unit costs to two decimal places. Required: Direct materials \ 50,000 Direct labour 30,000 Overhead 12,000 A. Determine equivalent units of production for July. B. Determine July's total costs to account for. C. Determine total cost per equivalent unit of production. D. Determine the cost of goods transferred to the packaging department. E. Determine the cost of July's ending work in process for the mixing department. F. Determine the equivalent units of production for July if ending inventory had been $80 \%$ complete.

Which of the following is a cost transferred from a prior process to a subsequent process?