Exam 6: Process Costing

Suburbia Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2016 are as follows: Production data: In process, beginning of month (20% converted) 1,000 units Started during February 5,000 units Completed and transferred to finished goods 4,500 units In process, end of month (60% converted) 1,500 units Manufacturing costs: Required: Prepare a cost of production report for February 2016. Use FIFO process costing.

When spoilage is assumed to be it is embedded in the total cost of good units.

Equivalent units are the incomplete units that could have been produced given the total amount of effort expended.

The process that produces batches of different products which are identical in many ways but differ in others is called:

Figure 6-1 The Allen Company has the following information for the Assembly Department for October 2016: -Refer to Figure 6-1. What is the total amount of debits to Work in Process-Assembly Department for October?

The production report is the document that summarizes the manufacturing activity that takes place in a work-in- process department.

The following information pertains to Southland Company: Units Work in process, April 1 (20% complete) 8,000 Started in January 40,000 Work in process, April 30 12,000 Materials are added at the beginning of the process. If equivalent units of production for conversion using the weighted average method was 39,000, ending work in process at April 30 must have been

Xanadu Company manufactures a product that passes through two departments, Assembly and Finishing. In the Finishing Department, materials are added at the end of the process. Conversion costs are incurred uniformly throughout the process. During the month of January, the Finishing Department received 60,000 units from the Assembly Department. The transferred-in cost of the 60,000 units was $69,900. Costs added by Finishing during January included the following: On January 1, the Finishing Department had 10,000 units in inventory that were 30 percent complete with respect to conversion costs. On January 31, 12,000 units were in inventory, one-third complete with respect to conversion costs. The costs associated with the 10,000 units in beginning inventory were as follows: Prepare a cost of production report using the weighted average method.

In firms with ending work-in-process inventories, output is measured using equivalent units.

In process costing, costing can be used to assign shared overhead to processes.

Figure 6-14 The following information is available for Department C for the month of June: Materials are added at the beginning of the process. Round unit costs to two decimal places. -Refer to Figure 6-14. The cost of ending work in process using the weighted average method is

Figure 6-5 Maynard Inc. manufactures desks. The following data was given for production in February: units, beginning work in process 0 units started 200 units completed ? units, ending work in process (40% complete) 50 -Refer to Figure 6-5. What are the equivalent units?

Triton Manufacturing Company began June 2016 with 10,000 units of inventory in process, 20 percent completed. During the period, 50,000 units were completed and transferred to the finished goods warehouse. Ending inventory consisted of 5,000 units, 70 percent completed. Materials were added at the beginning of the process. Required: Calculate the equivalent units for: a. Materials costs under the weighted average process cost method. b. Conversion costs under the weighted average process cost method. c. Materials costs under the FIFO process cost method. d. Conversion costs under the FIFO process cost method.

Activity-based costing might have a role in process costing settings under what conditions?

The costs included in the cost per equivalent unit using the weighted average method are

In process costing, costs are accounted for by

Figure 6-15 The Davidson Company uses a weighted average process costing system. The following information was reported for the Assembly Process for January. Materials are added at the beginning of the process and are 100%. -Refer to Figure 6-15. What are the equivalent units for conversion?

Figure 6-14 The following information is available for Department C for the month of June: Materials are added at the beginning of the process. Round unit costs to two decimal places. -Refer to Figure 6-14. The cost of goods transferred out using the weighted average method is

The local USPS office sorts letters by zip code. During the month of March, 200,000 letters were sorted. The cost of sorting includes the following: a. Explain why process costing is appropriate for this operation. b. Calculate the cost per letter for this operation. c. There are no direct materials used for the sorting operation. Is the absence of direct materials typical of services? If not, provide examples of services that use direct materials.

Which of the following process costing methods is simpler to use?