Exam 18: Process Costing

Selecting an appropriate cost accounting system Listed below are seven businesses.In the spaces provided,identify whether a job order costing system or a process costing system would most likely be appropriate. (a)________ Nancy's Paper Plate Company (b)________ Two Leg Pants Manufacturers,Inc. (c)________ Solid Residential Contractors (d)________ Float's Boats (e)________ Big Heart Hospital (f)________ Fizz Soda,Inc. (g)________ Sugarmore Candies,Inc.

[The following information applies to the questions displayed below.] Note: Materials are all added in the beginning -How many units were started in June?

In a process costing system,the number of units started and completed for a period is equal to:

[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 Duffy's operation,the Finished Goods Inventory account is debited for:

Companies that compute equivalent units of production do so to:

Equivalent units of production significantly differ from units completed and transferred during the period only when no significant differences exist between beginning and ending work in process.

In evaluating the efficiency of a production department,management should:

In either a job order or a process costing system,credits to the Materials Inventory account represent:

The production cost report is an estimate of the equivalent units completed during the period.

[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 Canning Department during March would include:

Equivalent units are usually computed for:

[The following information applies to the questions displayed below.] Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department.In June,unit costs incurred by the Mixing Department amounted to $4.00 per unit.Unit costs transferred to the finished goods warehouse during the month amounted to $22.Work-in-process inventories are reduced to zero each month. -The entry to record the sale of 3,500 units in June would include:

In a production cost report,the units transferred out refer to the equivalent units completed during the period that have been moved to the next department or to Finished Goods Inventory.

Process costing system-journal entries Joyce Industries uses a process costing system.All of the company's manufacturing activities take place in a single processing department.There was no beginning inventory in May.During the month,$60,000 of materials were added and $40,000 of labor and $75,000 of overhead costs were charged to work in process.The entire work in process inventory of 20,000 units was completed and transferred to finished goods.Of these 20,000 units,15,000 were sold on account at $14 per unit. In the space provided,prepare a general journal entry to summarize each of the following categories of transactions for the month of May.(You may omit explanations. ) (a. )The recording of manufacturing costs applied to production (use a single journal entry). (b. )The transfer of completed units from work in process to the finished goods warehouse. (c. )The sale of 15,000 units manufactured during the month and the related cost of goods sold.

An equivalent unit measures the percentage of a completed unit's cost that is present in a partially finished unit.

To identify the cause of a change in a product total unit cost,management may:

The number of equivalent units of production:

As costs flow from one production department to the next in a process costing system,one Work-in-Process Inventory account shows all the changes to the units in production.

If beginning inventory in Work in Process is zero,2,000 units are started during the period,and 1,700 units were completed and transferred out,how many units remain in ending inventory?

[The following information applies to the questions displayed below.] Note: Materials are all added in the beginning -What are the equivalent units for materials?