Exam 8: Process Costing

Which of the following characteristics applies to process costing,but does not apply to job order costing?

A company should use process costing,rather than job order costing,if:

The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs.15,000 units were received from the previous department.The ending Work-in-Process Inventory consisted of 2,000 units which were 50% complete as to materials and 30% complete as to conversion costs.The Finishing Department uses first-in,first-out (FIFO)process costing.How many units were started and completed during the period?

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.The cost per equivalent unit for conversion costs for the first department for the month is closest to:

Ralston Fine Hardwoods uses a process costing system to account for its wood processing plant.Beginning inventory consisted of 4,000 board feet of lumber (100% complete as to material,35% complete as to labor).Ralston added 132,000 board feet into the process during April.On April 30^th there were 10,000 board feet still in process (100% complete as to material,22% complete as to labor).Required: (a)Calculate the equivalent units of production for each input,assuming Ralston uses weighted-average.(b)Calculate the equivalent units of production for each input,assuming Ralston uses FIFO.

The weighted-average approach to process costing combines the work and costs done in prior periods with the work and costs done in the current period.

Morgenstern Company had Work-in-Process Inventories that were 45% complete at the start of the month.Work-in-Process at the end of the month was 10% complete.Materials were added at the beginning of the process.If weighted-average process costing is used,the total equivalent units for materials will equal the number of units:

Describe the five steps in preparing a production cost report.

In computing the current period's manufacturing cost per equivalent unit,the FIFO method of process costing considers: (CPA adapted)

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 unit cost of Product X started and completed in the current period is:

If materials are added continuously throughout the production process,then the equivalent units for materials will always equal the equivalent units for the conversion costs

Holcomb Company uses the weighted-average method in its process costing system.The Shaping Department is the second department in its production process.The data below summarize the department's operations in January. Units Percent Complete with Respect to Comersion Beginning work-in-process irwentory 3,800 90\% Transterred in from the prior department during January 53,000 Completed and transterred to the next department during Januayy 51,300 Ending work-in-process irwentory 5,500 30\% The accounting records indicate that the conversion cost that had been assigned to beginning work-in-process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department during January.What was the cost per equivalent unit for conversion costs for January in the Shaping Department? (Round to three decimal places. )

Equivalent units for a process costing system,using the weighted-average method,would be equal to:

Sparkle Inc.is a company that produces liquid cleaning products.Sparkle's management is trying to decide whether to install a job or process costing system.The manufacturing vice president has stated that job costing gives the best control because it is possible to assign costs to specific lots of goods.The controller,however,has stated that job costing requires too much record keeping.Would a process costing system meet the manufacturing vice presi­dent's control objectives? Explain.

Process costing assumes all units are homogeneous and follow the same path through the production process.

Parkway Company incurred $126,000 in material costs during July.Additionally,the 12,000 units in the Work-in-Process Inventory on July 1 had materials assigned to them of $32,000,even though they were only 5% complete as to materials.No additional units were started during July,and there were no unfinished units on hand on July 31.What is the material cost per unit for July,assuming Parkway uses weighted-average process costing?

In process 2,material G is added when a batch is 60% complete.Ending work-in-process units,which are 50% complete,would be included in the computation of equivalent units for: (CPA adapted) Comersion Costs Material G A. Yes No B. No Yes C. No No D. Yes Yes

Fanciful Structures Company uses the weighted-average method in its process costing system.The first processing department,the Welding Department,started the month with 22,000 units in its beginning work-in-process inventory that were 20% complete with respect to conversion costs.The conversion cost in this beginning work-in-process inventory was $23,320.An additional 97,000 units were started into production during the month and 101,000 units were completed in the Welding Department and transferred to the next processing department.There were 18,000 units in the ending work-in-process inventory of the Welding Department that were 40% complete with respect to conversion costs.A total of $529,380 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. )

Highlite Corporation uses the weighted-average method in its process costing.The following data pertain to its Formulation Department for November. Units in process, November 1: materials 85\% 700 complete, conversion 75\% complete Units started into production during November 5,500 Units completed and transterred to the next department 4,700 Units in process, November 30 : materials 70\% complete, conversion 25\% complete 1,500 Required: Determine the equivalent units of production for the Formulation Department for November using the weighted-average method.

If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-Process Inventory,then the units transferred out are: