Exam 18: Process Costing

[The following information applies to the questions displayed below.] Duffy Brothers manufactures a single product using a process involving (1)mixing ingredients and (2)a subsequent packaging operation.Duffy uses a process costing system to account for the flow of costs through its production process. -In the production process described,what is the Work in Process Inventory: Packaging Department debited for?

Equivalent units In the first month of operations,the manufacturing costs for Blue Sun Company were as follows: During the month 10,000 units were completed,and 5,000 units were in process at the end of the month.The 5,000 units in process were 100% completed as to materials and 80% completed as to direct labor and overhead.Compute the following: (a)Direct materials cost per equivalent unit: $________ (b)Equivalent units of production for direct labor and manufacturing overhead: ________ (c)Direct labor cost per equivalent unit: $________ (d)Manufacturing overhead cost per equivalent unit: $________ (e)Total cost of 10,000 units completed: $________ (f)Total cost of 5,000 units in process at the end of the month: $________

Monfort Company had the following information (1. )What are equivalent units of production for materials? (2. )What was the cost per equivalent unit of production for materials during the period? (Round your final answer to two decimal places. ) (3. )What were the equivalent units of production for conversion cost? (4. )What was the cost per equivalent unit of production for conversion costs? (Round your final answer to two decimal places. )

The number of equivalent units of production during a period may be greater than,equal to,or smaller than the actual number of units completed and transferred to the finished goods warehouse.

A company may choose to use process costing or job order costing,but never both simultaneously.

In most process costing systems,the number of units "in process" at any one time is usually significant relative to the total production output of the period.

[The following information applies to the questions displayed below.] Aves Treats,Inc.produces birdseeds.All direct materials used in the production process are added at the beginning of the manufacturing process.Labor and overhead are added evenly thereafter,as each unit is mixed and packaged.Aves Treats uses process costing and had the following unit production information available for the months of June and July: The units remaining in work in process at the end of June were 30% complete.During the month of July,all of the beginning work in process units was completed and the units remaining in work in process at the end of the month were 60% complete. -For the month of June,the number of equivalent units of direct materials produced was:

A process costing system is highly desirable when a company mass produces identical goods.

Which company would most likely not use a process costing system?

Process costing with equivalent units and beginning inventory The records of Westminster Manufacturing Company for the month of May show the following costs in Department A: The beginning inventory for May consisted of 10,000 units that were 80% complete as to direct materials and 60% complete as to labor and overhead.A total of 100,000 units were completed and transferred out during May,and 20,000 units remained in the work in process inventory.The ending inventory was 80% complete as to direct materials and 40% complete as to labor and overhead.Compute the following: (a)Direct materials cost per equivalent unit: $________ (b)Equivalent units of production for direct labor and overhead: ________ (c)Total cost of 100,000 units completed: $________ (d)Total cost of 20,000 units in process at the end of the month: $________

Equivalent units of production are:

[The following information applies to the questions displayed below.] Sue's Soup Products uses a process costing system with two processing departments: the Mixing and Cooking Department and the Canning Department.Work in process inventories are reduced to zero each month.In March,the Mixing and Cooking Department incurred manufacturing costs of $63,000 to mix 42,000 gallons of soup.The Canning Department incurred manufacturing costs of $9,000.A total of 170,000 cans of soup were transferred to the finished goods warehouse during the month. -The journal entry to record the transfer of soup out of the Mixing and Cooking Department during March would include:

Process costing does not:

The computation of equivalent units is generally not necessary when:

Equivalent units of production represent units of:

A summary of work completed with related unit and total costs in a process costing system is called a(n):

All of the following are characteristics of the products of process costing except:

[The following information applies to the questions displayed below.] Aves Treats,Inc.produces birdseeds.All direct materials used in the production process are added at the beginning of the manufacturing process.Labor and overhead are added evenly thereafter,as each unit is mixed and packaged.Aves Treats uses process costing and had the following unit production information available for the months of June and July: The units remaining in work in process at the end of June were 30% complete.During the month of July,all of the beginning work in process units was completed and the units remaining in work in process at the end of the month were 60% complete. -For the month of July,the number of equivalent units of direct materials produced was:

Process costing system-journal entries Milton Manufacturing uses a process costing system.Products are processed successively by Department × and Department Y and are then transferred to the finished goods warehouse.Shown below is cost information for Department Y during the month of May: The cost of work in process in Department Y at May 31 has been determined to be $113,500. In the space provided,prepare a general journal entry to summarize for the month of May each of the following categories of transactions (you may omit explanations): (a. )The transfer of production from Department × to Department Y. (b. )The recording of manufacturing costs incurred in Department Y during May.(Use a single journal entry. ) (c. )The transfer of completed units from Department Y to the finished goods warehouse.

Costs flow through a process costing system in the same sequence as actual products move through the assembly process.