Exam 8: Process Costing

The degree of completion associated with prior department costs is always 100%.

Tracker Sports is a manufacturer of sportswear.Tracker produces its products in two departments.The information for the current month for Department #2 is as follows: Beginning WIP was half complete as to conversion costs.Direct materials for Department #2 are added when the process is 25% complete.Factory overhead is applied at a rate equal to 50 percent of direct manufacturing labor.Ending WIP was 60 percent complete.Tracker Sports uses first-in,first-out (FIFO)costing. Beginning work-in-process 20,000 units Units transterred in from Dept \#1 40,000 units Units completed 50,000 units Ending work-in-process 10,000 units Beginning WIP transterred in costs \ 50,000 Beginning WIP direct materials \ 12,000 Beginning WIP direct labor \ 3,200 Beginning WIP ow erhead \ 1,600 Costs transterred in from Dept \# 1 \ 100,000 Direct material added during month \ 60,000 Direct manutacturing labor during month \ 20,000 Manufacturing overhead applied ??? 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.

Which of the following statements is(are)true? I.For cost control,the FIFO method of process costing is better than the weighted-average method.II.The weighted-average method of process costing assigns more cost to units completed (transferred out)than the FIFO method.

The Miracle Company had 20,000 units in process on December 31,2016 which was 80% complete as to materials but only 40% complete as to conversion costs.The company's records show 40,000 units were transferred to the Finished Goods Inventory during January 2017.On January 31,2017,15,000 units were on hand which were 30% complete as to conversion costs and 60% complete as to materials.What are the equivalent units of production for the conversion costs in January,assuming Miracle uses first-in,first-out (FIFO)?

The debits to Work-in-Process for Department #2 for the month of April of the current year,together with information concerning production,are presented below. WOFKHNPPROCESS - DEPARTMENT \#2 1,200 units, 1/4 completed \ 1,200 Product X,6,200 units ???? From Dept. 1, 6,000 units 3,600 Direct Labor 8,000 Factory 4,800 1,000 units, 1/2 complete ???? All direct materials come from Department #1.The units completed include the 1,200 in process at the beginning of the period.Department #2 uses FIFO costing.The cost of the ending Work-in-Process Inventory is:

An equivalent unit of conversion costs is equal to the amount of conversion costs required to:

Haberdashery Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete).During the period,110,000 units were started and the ending Work-in-Process Inventory consisted of 20,000 units (80%).What are the equivalent units for conversion costs using weighted-average process costing?

The following data has been provided by Radiotronics Inc. ,a company that uses the FIFO method in its process costing system.The data concern the company's Wiring Department for the month of March. Cost in beginning work-in-process inventory \ 2,260 Units started and completed this month 4,660 Required: Determine the cost of ending work-in-process inventory and the cost of the units transferred out of the department during March using the FIFO method.

Malcom Industries manufactures a silicone paste wax that goes through three processing departments: cracking,blending,and packing.All raw materials are introduced at the start of work in the cracking department,with conversion costs being incurred uniformly in each department.The Work-in-Process T-account for the cracking department for July is: The beginning balance inventory consists of $43,400 in materials cost.Malcom uses the weighted-average method to account for its operations.Required (use 4 decimal places for computations): Work-in-Process I wentoy (Cracking Department) Balance, Juby 1(36,000,4/5 done) \ 63,700 Direct materials ( 280,000) 397,600 Conversion costs 189,700 Balance, Juby 31 (45,000 lbs, 23 done) ?? Costs transterred to Blending Dept ?? (a)What would be the Cracking Department inventory balance on July 31? (b)What would be the cost transferred to the Blending Dept.in July?

The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method:

The Fremont Company uses the weighted-average method in its process costing system.The company recorded 29,500 equivalent units for conversion costs for November in a particular department.There were 6,000 units in the ending work-in-process inventory on November 30,75% complete with respect to conversion costs.The November 1 work-in-process inventory consisted of 8,000 units,50% complete with respect to conversion costs.A total of 25,000 units were completed and transferred out of the department during the month.The number of units started during November in the department was:

The Safety Chemical Company produces a special kind of body oil that is widely used by professional sports trainers.The oil is produced in three processes: Refining,Blending,and Mixing.Raw oil materials are introduced at the beginning of the refining process.A "mountain-air scent" material is added in the blending process when processing is 50% completed.The following Work-in-Process account for the Blending Department is available for the month of July.The July 1 Work-in-Process inventory contains $10,370 in conversion costs,and $1.56/unit in costs transferred in from the Refining Department. Workin-Process: Blenoing Beginning balance (8,000 gal, 30\% complete ) \ 22,850 Costs transterred in from Refining (29,000 gal. ) 48,200 Materials 20,810 Direct labor 5,748 Overhead 11,600 Ending balance (4,000 gal., 40\% complete ) The Safety Chemical Company uses first-in,first-out (FIFO)costing.Required (use 4 decimal places for computations): (a)Compute the equivalent units of production for Blending.(b)Compute the unit costs in the Blending Department for the month of July.(HINT: There are three. ) (c)Compute the costs transferred out to the Mixing Department for July.(d)Compute the July 31 Work-in-Process Inventory balance.

Additional materials are added in the second department of a four-department production process.However,this addition does not increase the number of units being produced in the second department,but will:

The Lakeside Company uses a weighted-average process costing system.The following data are available: Beginning inventory -0 Units started in production 20,000 Units finished during the period 16,000 Units in process at the end of the period (complete as to materials, 1/4 complete as to labor and overhead) 4,000 Cost of materials used \ 35,200 Labor and overhead costs \ 37,400 Total cost of the 4,000 units of the ending inventory:

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 is the equivalent unit cost for the conversion costs assuming Bentley uses weighted-average process costing?

Roubideaux Corporation uses process costing.The following data pertain to its Packing Department for February. Units in process, F ebruary 1: materials 85\% 500 complete, conversion 70\% complete Units started into production during February 6,900 Units completed and transterred to the next department 6,200 Units in process, F ebruary 28 : materials 50\% complete, conversion 20\% complete 1,200 Required: Determine the equivalent units of production for the Packing Department for February using the weighted-average method.

Markov Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department,Sculpting,for a recent month. Work-ir-process, beginning: Units in process 200 Percent complete with respect to materials 50\% Percent complete with respect to comersion 40\% Units started into production during the month 11,000 Work-in-process, ending: Units in process 500 Percent complete with respect to materials 80\% Percent complete with respect to comersion 10\% Required: Using the weighted-average method,determine the equivalent units of production for materials and conversion costs.

Production and cost data for the month of February for Process A of the Packer manufacturing Company follow: Units in process, February 1 (100\% complete with respect to materials; 25\% complete with respect to conversion cost) 2,000 New units started in process 8,000 Units completed (100\% 1/3 complete with respect to conversion cost) 7,000 Units in process, February 28 3,000 Work-ir-process inventory, February 1: Materials \ 600 Conversion \ 100 Costs incurred in February: Materials issued \ 2,560 Conversion \ 1,500 The company uses the weighted-average cost method in its process costing system.Required: a.Calculate the equivalent units and cost per equivalent unit for February for materials and for conversion costs.(Carry calculations out to the nearest tenth of a cent. ) b.Determine the cost transferred to finished goods.c.Determine the amount of cost that should be assigned to the ending work-in-process.

The Marshall Company has a process cost system.All materials are added when the process is first begun.At the beginning of September,there were no units of product in process.During September 50,000 units were started;5,000 of these were still in process at the end of September and were 3/5 finished.The equivalent units of material in September were:

Tiny Villages Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department - Extruding - for a recent month. Work-ir-process, beginning: Units in process 300 Percent complete with respect to materials 80\% Percent complete with respect to corwersion 70\% Costs in the beginning inventory: Materials cost \ 1,368 Conversion cost \ 8,064 Units started into production during the month 11,000 Units completed and transterred out 11,000 Costs added to production during the month: Materials cost \ 64,948 Conversion cost \ 412,179 Work-ir-process, ending: 300 Units in process 80\% Percent complete with respect to materials 10\% Percent complete with respect to conversion Required: a.Determine the equivalent units of production.b.Determine the costs per equivalent unit.c.Determine the cost of ending work-in-process inventory.d.Determine the cost of the units transferred to the next department.