Exam 20: Process Cost Accounting

Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

A unique feature of process costing systems is the use of a single Goods in Process Inventory control account when more than one production department exists.

Which of the following products is least likely to be produced in a process manufacturing system?

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

A company uses a process cost accounting system. Its Assembly Department's beginning inventory consisted of 50,000 units, 3/4 complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are 1/4 complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

A company's January 1 goods in process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were 20% complete. Calculate the equivalent units of production for the year using the FIFO method.

Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the weighted-average method of inventory costing. Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending goods in process inventory.

Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. The production department incurred direct materials cost of $253,000 and its beginning inventory included materials cost of $93,500. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:

In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to:

In process cost accounting, all labor that is applied exclusively in a single production department is considered to be direct labor.

In a process cost accounting system, with the exception of the first department, each department receives output from the prior department as a partially processed product.

When the final production department completes goods, the cost of the completed goods are transferred to ___________________.

In a process cost accounting system, direct material costs incurred are recorded:

Prepare journal entries to record the following production activities for Sherman Manufacturing. a. Incurred $105,100 of factory labor cost which is paid in cash. b. Used $93,900 of direct labor in the production department. c. Used $11,200 of indirect labor.

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method.

Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the ending goods in process inventory for August.