Exam 8: Process Costing

A form prepared periodically for each processing department summarizing (1)the units for which the department is accountable and the disposition of these units and (2)the costs charged to the department and the allocation of these costs is called a:

In a process costing system,manufacturing overhead applied is usually recorded as a debit to:

Everglades Furniture uses a process cost system to account for its chair factory.Beginning inventory consisted of 5,000 units (100% complete as to material,55% complete as to labor)with a cost of $124,800 materials and $104,500 conversion.58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs.The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor.Everglades uses weighted-average costing.Required: (HINT: use 4 decimal places in your calculations) a.Compute the equivalent units of production for each input.b.Compute the cost per unit.c.Compute the cost transferred out to finished goods.d.Compute the ending work-in-process inventory balance.

Vacumatic,Inc.uses the FIFO method in its process costing system.The following data concern the operations of the company's first processing department - Assembly - for a recent month. Work-ir-process, beginning: Units in process 700 Percent complete with respect to materials 50\% Percent complete with respect to corwersion 10\% Costs in the beginning inventory: Materials cost \ 595 Conversion cost \ 2,093 Units started into production during the month 14,000 Units completed and transterred out 14,600 Costs added to production during the month: Materials cost \ 21,465 Conversion cost \ 440,618 Work-ir-process, ending: 60\% Units in process 60\% Percent complete with respect to materials 100 Percent complete with respect to conversion Required: Using the FIFO method: a.Determine the equivalent units of production for materials and conversion costs. b.Determine the cost per equivalent unit for materials and conversion costs. c.Determine the cost of ending work-in-process inventory. d.Determine the cost of units transferred out of the department during the month.

Garrison Corporation uses the FIFO method in its process costing system.Data concerning the first processing department for the most recent month are listed below: Beginning work-in-process inventory: Units in beginning work-in-process inventory 600 Materials costs \ 6,600 Conversion costs \ 2,700 Percent complete with respect to materials 60\% Percent complete with respect to corwersion 10\% Units started into production during the month 7,000 Materials costs added during the month \ 102,200 Conversion costs added during the month \ 259,200 Ending work-in-process imventory: Units in ending work-in-process irwentory 1,500 Percent complete with respect to materials 55\% Percent complete with respect to corversion 10\% Note: Your answers may differ from those offered below due to rounding error.In all cases,select the answer that is the closest to the answer you computed.To reduce rounding error,carry out all computations to at least three decimal places.How many units were started AND completed during the month in the first processing department?

Cordon Processing uses a process costing system to account for its solvent plant.Beginning inventory consisted of 14,000 gallons (80% complete as to material,55% complete as to labor).Cordon added 213,000 gallons into the process during April.On April 30^th there were 18,000 gallons still in process (60% complete as to material,45% complete as to labor).Required: (a)Calculate the equivalent units of production for each input,assuming Cordon uses weighted-average.(b)Calculate the equivalent units of production for each input,assuming Cordon uses FIFO.

If materials are only added at the end of the production process,then the degree of completion for materials of units in the ending Work-in-Process Inventory is always 0%.

Operation costing is used in manufacturing goods that have some common characteristics and some individual characteristics.

Nebraska Company uses the weighted-average 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 30% complete with respect to conversion costs.The conversion cost in this beginning work-in-process inventory was $44,820.An additional 90,000 units were started into production during the month.There were 21,000 units in the ending work-in-process inventory of the Welding Department that were 10% complete with respect to conversion costs.A total of $677,970 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? (Round to three decimal places. )

What characteristics of the production process would lead a company to use process costing rather than job costing?

The more important individual unit costs are for making decisions,the more likely it is that process costing will be preferred to job costing.Do you agree?

The Microprocessor Manufacturing Company produces a single product in a single processing department.The material is added when 25% of the conversion costs have been added.The Work-in-Process Inventory account on April 30^th includes the following information: Beginning balance \ 1,382 Material 5,325 Labor 10,863 Overhead 15,012 During the month,the company finished and transferred 72,000 units out of the Work-in-Process Inventory.9,000 units were in process at the beginning of the month,which were 40% complete.8,000 units were in process at the end of the month,which were 70% complete.The company uses first-in,first-out (FIFO)process costing.Required (use 4 decimal places for computations): (a)Compute the equivalent units of production (EUP)for materials and conversion costs in April.(b)Compute the unit conversion costs and unit material costs for April.(c)Compute the total cost transferred out of the Work-in-Process Inventory during the month of April.(d)Compute the cost of the ending inventory for April.

Martin Enterprises uses three operations in sequence to manufacture an assortment of flower pots.In each operation,the same procedures,time,and costs are used to perform that operation,regardless of the type of pot being produced.During March,a batch of 500 Clay Pots and a batch of 800 Porcelain Pots were put through the first operation.All materials for a batch are introduced at the beginning of the operation for that batch.The costs shown below were incurred in March for the first operation: Direct Labor \ 4,450 Manufacturing Overhead 3,600 Direct Materials: Clay Pots \ 1,200 Porcelain Pots \ 2,400 There were no inventories at the beginning of the month;400 units of Clay Pots and 600 units of Porcelain Pots were transferred to the next operation.The ending inventories were 30% and 60% complete for Clay and Porcelain,respectively.Required: What is the total cost of the ending inventory in process for operation #1?

Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry.The following information pertains to operations for November.(CMA Exam adapted) The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs.The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.Costs pertaining to November are as follows: Units Work in process, Nowember 1st 16,000 Started in production during Nov ember 100,000 Work in process, Nowember 3 24,000 Beginning inventory: direct materials,$54,560;direct labor,$20,320;manufacturing overhead,$15,240.Costs incurred during the month: direct materials,$468,000;direct labor,$182,880;manufacturing overhead,$391,160.What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses weighted-average process costing?

Bentwood Corporation uses the FIFO method in its process costing system.Data concerning the first processing department for the most recent month are listed below: Beginning work-in-process inventory: Units in beginning work-in-process inventory 900 Materials costs \ 17,100 Conversion costs \ 10,200 Percent complete with respect to materials 70\% Percent complete with respect to corwersion 25\% Units started into production during the month 7,300 Units transterred to the next department during the month 6,100 Materials costs added during the month \ 148,200 Conversion costs added during the month \ 247,500 Ending work-in-process imentory: Units in ending work-in-process inventory 2,100 Percent complete with respect to materials 80\% Percent complete with respect to corwersion 35\% Note: Your answers may differ from those offered below due to rounding error.In all cases,select the answer that is the closest to the answer you computed.To reduce rounding error,carry out all computations to at least three decimal places.The cost per equivalent unit for conversion costs for the first department for the month is closest to:

A process costing system:

Manning Corporation uses the weighted-average method in its process costing.The following data pertain to its Processing Department for September. Required: Compute the equivalent units of production for both materials and conversion costs for the Processing Department for September using the weighted-average method.

Under which of the following conditions will the FIFO method produce the same cost of goods manufactured as the weighted-average method?

The computation of equivalent units under the FIFO method:

Which of the following statements is(are)false? (A)Operations costing accounts for material costs like job costing and conversion costs like process costing.(B)An automobile manufacturer is more likely to use an operations costing system than a process costing system.