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Exam 16: Process Costing and Analysis

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Question 31

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

A) True
B) False

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Question 32

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If Department L uses $53,000 of direct labor and Department M uses $21,000 of direct labor,the following journal entry would be recorded using a process costing system:

A) True
B) False

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Question 33

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Prepare the required general journal entry to record the following transactions for the O'Harra Company. a.Used $78,000 of direct labor in the production department. b.Used $17,000 of indirect labor.

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August.Minnesota 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 beginning units that were completed and transferred during August.

If Department C uses $10,000 of direct materials and Department D uses $15,000 of direct materials,the following journal entry would be recorded by the process costing system:

Process costing systems use a single Work in Process Inventory account regardless of the number of production departments that exist.

Prepare journal entries to record the following production activities for Oaks Manufacturing. a.Used $93,900 of direct labor in the production department. b.Used $11,200 of indirect labor.

Metaline Corp.uses the weighted average method for inventory costs and had the following information available for the year. -Calculate the equivalent units of production for the year:

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period,the equivalent units of production with respect to direct labor must also be 100.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. -The total conversion costs transferred out of the Canning Department equals:

The FIFO method of computing equivalent units focuses on production activity in the current period only.

During April,the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April.April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor.At the end of April,30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor.The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month.Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

During March,the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 that 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 labor cost of $578,900 and its beginning inventory included labor cost of $54,700.Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

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

During March,the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that 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.

Hybrid costing systems can only be applied to manufacturing.

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

A company uses the weighted average method for inventory costing.At the start of a period the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units.At the end of the period,22,000 units were in the ending Work in Process inventory and are 75% complete.The production department had conversion costs in the beginning goods is process inventory of $99,000 and total conversion costs added during the period are $726,825.Compute the conversion cost per equivalent unit.

The FIFO method of computing equivalent units excludes the beginning inventory costs in computing the cost per equivalent unit for the current period.

Sparky Corporation uses the weighted-average method of process costing.The following information is available for February in its Molding Department: Units: Beginning Inventory: 25,000 units,100% complete as to materials and 55% complete as to conversion. Units started and completed: 110,000. Units completed and transferred out: 135,000. Ending Inventory: 30,000 units,100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850. Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150. -Calculate the cost per equivalent unit of conversion.