Exam 8: Process Costing

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.

An operations costing system is:

An error was made by ROC Company in computing the percentage-of-completion of the current year's ending Work-in-Process Inventory.The error resulted in the assignment of a lower percentage of completion to each component of the inventory than actually was the case.There was no beginning Work-in-Process Inventory.What is the effect of this error on (1)cost assigned to cost of goods completed for the period and (2)the computation of costs per equivalent unit?

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

In order to compute equivalent units of production using the FIFO method of process costing,work for the period must be broken down to units:

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%.None of the materials would be there.Once the materials are added,the units are complete.

ABC 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 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.What are the equivalent units of production for materials during the period?

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.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:

The WISCO Company uses a weighted-average process costing system.The following data are available: Total cost of the 16,000 units finished is:

A process costing system was used for a department that began operations in January 2012.Approximately the same number of physical units,at the same degree of completion,were in work-in-process at the end of both January and February.Monthly conversion costs are allocated between ending work-in-process and units completed.Compared to the FIFO method,would the weighted-average method use the same or a greater number of equivalent units to calculate the monthly allocations? (CPA adapted)

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)

The Wisco 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:

Kimbeth Manufacturing 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: 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 materials assuming Kimbeth uses weighted-average process costing?

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.Conversion costs are added continuously;if materials are as well there is no need to separately compute equivalent units since they would be the same.

Predetermined manufacturing overhead rates can be used in all of the following costing systems except:

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:

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

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.What are the equivalent units of production for the conversion costs during the period?

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