Exam 5: Cost-Volume-Profit Relationships

Stay Corporation uses the weighted-average method in its process costing system. The company's ending work in process inventory consists of 8,000 units, 60% complete with respect to materials and 80% complete with respect to conversion costs. If the total cost in this inventory is $200,000 and if the cost for materials is $16 per equivalent unit for the period, the conversion cost per equivalent unit of the production for the period must be:

Valley Manufacturing Corporation's beginning work in process inventory consisted of 10,000 units, 100% complete with respect to materials cost and 40% complete with respect to conversion costs. The total cost in the beginning inventory was $30,000. During the month, 50,000 units were transferred out. The equivalent unit cost was computed to be $2.00 for materials and $3.70 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:

Gupta Inc. uses the weighted-average method in its process costing. The following data concern the company's Mixing Department for the month of December. Required: Compute the cost per equivalent unit for materials and conversion for the Mixing Department in December.

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

Barraza Corporation uses a weighted-average process costing system. Barraza has two direct materials. One of these materials is added at the beginning of the production process. The other material is added when processing is 50% complete. When will the equivalent units of production for these two materials be equal?

David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $123,200. An additional 65,000 units were started into production during the month. There were 19,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $389,250 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

Arizaga Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe-shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arizaga uses a weighted-average process cost system to collect costs in both departments. All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 320 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 540 canoes in process that were 30% complete with respect to conversion cost. During July, the Fabrication Department completed 6,700 canoes and transferred them to the Waterproofing Department. What journal entry should Arizaga make to record the completion of the production process by the Waterproofing Department?

In February, one of the processing departments at Manger Corporation had beginning work in process inventory of $25,000 and ending work in process inventory of $34,000. During the month, $290,000 of costs were added to production and the cost of units transferred out from the department was $281,000. In the department's cost reconciliation report for February, the total cost to be accounted for under the weighted-average method would be:

Zhang Corporation uses process costing. A number of transactions that occurred in June are listed below. (1) Raw materials that cost $41,700 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials. (2) Direct labor costs of $47,700 are incurred, but not yet paid, in the Mixing Department. (3) Manufacturing overhead of $56,900 is applied in the Mixing Department using the department's predetermined overhead rate. (4) Units with a carrying cost of $128,300 finish processing in the Mixing Department and are transferred to the Drying Department for further processing. (5) Units with a carrying cost of $133,800 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse. (6) Finished goods with a carrying cost of $129,200 are sold. Required: Prepare journal entries for each of the transactions listed above.

In September, one of the processing departments at Farquer Corporation had beginning work in process inventory of $34,000. During the month, $342,000 of costs were added to production and the cost of units transferred out from the department was $357,000. Required: Construct a cost reconciliation report for the department for the month of September.

The "costs to be accounted for" portion of the cost reconciliation report includes the cost of ending work in process inventory and the costs added during the period.

Health Beverage Corporation uses a process costing system to collect costs related to the production of its celery flavored cola. The cola is first processed in a Mixing Department at Health and is then transferred out and finished up in the Bottling Department. The finished cases of cola are then transferred to Finished Goods Inventory. The following information relates to Health's two departments for the month of January: How many cases of cola were completed and transferred to Finished Goods Inventory during January?

Paxton Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $10,973 and a total of $268,107 in conversion costs were incurred in the department during January. The cost per equivalent unit for conversion costs for January in the Molding Department is closest to:

Both job-order and process costing systems use averaging to compute unit product costs.

In September, one of the processing departments at Wielgus Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $10,000. During the month, $296,000 of costs were added to production. In the department's cost reconciliation report for September, the total cost to be accounted for would be:

Acklac Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were: A total of 9,200 units were started and 8,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 75% complete with respect to materials and 15% complete with respect to conversion costs. 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:

Jublot Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: 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 materials for the month in the first processing department is closest to:

In May, one of the processing departments at Stitzel Corporation had beginning work in process inventory of $16,000 and ending work in process inventory of $27,000. During the month, the cost of units transferred out from the department was $160,000. In the department's cost reconciliation report for May, the total cost to be accounted for under the weighted-average method would be:

For which situation(s) below would an organization be more likely to use a process costing system of rather than a job-order costing system?

Barker Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 300 units. The costs and percentage completion of these units in beginning inventory were: A total of 9,100 units were started and 8,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 20% complete with respect to conversion costs. 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 are in ending work in process inventory in the first processing department at the end of the month?