Exam 8: Process Costing

The Blue Corporation started and completed 4,800 units during February.Blue started the month with 700 units in process (40% complete)and ended the month with 400 units in process (40% complete).How many units were transferred to the Finished Goods Inventory during February?

In a weighted-average process costing system,the costs in the beginning Work-in-Process Inventory are not used to compute the costs transferred-out.In weighted-average,the beginning WIP costs are combined with the current period costs to determine cost per unit.

Red 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:

Job costing requires more detailed recordkeeping than process costing.Job costing traces costs to jobs or units while process costing averages costs.

In the computation of the manufacturing cost per equivalent unit,the weighted-average method of process costing considers:

Operational costing accounts for material costs like job costing and conversion costs like process costing.Materials vary and can be traced;conversion costs are consistent and can be averaged.

It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-in-Process Inventory.If the time to complete a unit is longer than a month,it may be possible that not all units in beginning WIP would be completed during the month.

The ALG Manufacturing Company has gathered the following information for the month of September: • 6,000 units in the beginning Work-in-Process Inventory (75% complete as to materials,1/3 complete with respect to the conversion costs) • 60,000 units were started into production • 50,000 units were completed and transferred to the next department • The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect to conversion costs.What are the equivalent units of production (EUP)for the conversion costs in the month of September assuming ALG uses weighted-average process costing?

The Viva Company had 20,000 units in process on December 31,2012 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 2013.On January 31,2013,15,000 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 Viva uses first-in,first-out (FIFO)?

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 are the total costs in the ending Work-in-Process Inventory assuming Kimbeth uses 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.How many units were started and completed during the period?