Exam 20: Process Cost Accounting

Describe the flow of overhead costs in a process cost accounting system, including accounts used.

Harbor Manufacturing Company uses a process cost accounting system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process cost accounting. The following are the operating and cost data information for October. The October 1 beginning Goods in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost. In addition to the beginning inventory costs, the company issued the following costs into Goods in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000. During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the goods in process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials. Prepare the company's process cost summary for October using the weighted average method.

The following table of cost information is available for the Messier Company for the month of November:

In process costing, indirect materials are charged directly to Goods in Process Inventory.

The second step in accounting for production activity in a period is to compute ____________________.

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

Describe the flow of labor in a process cost accounting system, including accounts used.

In a process cost accounting system, a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing. Compute the equivalent cost per unit for direct materials, direct labor and overhead for June.

The following is an account for a production department, showing its costs for one month: Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?

In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

A materials consumption report is a source document that summarizes the materials used during a reporting period.

A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending goods in process inventory and are 100% complete for materials and 75% complete for labor and overhead. The equivalent costs per unit are; materials, $2.65, labor, $2.15, and overhead, $3.20. Compute the cost that would be assigned to the ending goods in process inventory for the period.

In a process cost accounting system, the purchase of raw materials is debited to the Raw Materials Inventory.

Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

A company uses a process cost accounting system and the weighted average method for inventory costs. The following information is available regarding direct labor for the current year: (a) Calculate the equivalent units of production for direct labor for the year. (b) Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

If a department that uses process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, it must add 80% direct labor in the current period to complete the units.

In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Goods in Process, Dept #1 to ______________.

Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

Lipinski Company completed and transferred 90,000 units during the current period. Based on the following information, determine the cost of the goods completed during the current reporting period and journalize the transfer.