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Exam 20: Process Costing

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Question 91

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Which of the following products is least likely to be produced in a process operations system?

A) Slacks for casual wear
B) Custom cabinets
C) Compact disks
D) Calculators
E) Baseball hats

F) None of the above
G) A) and B)

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Question 92

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In a process costing system, direct materials used are debited to the ________ account, and indirect materials used are debited to the ________ account.

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Work in Pr...

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Question 93

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

Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were completed and transferred out as finished goods during the month, and 36,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

A unique feature of process costing systems is the use of a single Work in Process Inventory account regardless of the number of production departments that exist.

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.

The purchase of raw materials on account in a process costing system is recorded with a:

If Grayson Manufacturing incurred $17,400 for direct labor in the assembly department and $10,300 for direct labor in the painting department, the journal entry to record the labor used is: $\begin{array}{llr} \text { Work in Process Inventory, Assembly } &\$17,400\\ \text { Work in Process Inventory, Painting } &\$10,300\\ \text { Raw Materials Inventory } &&\$27,700\end{array}$

Process costing systems consider overhead costs to include those costs that cannot be traced to a specific process.

A process cost summary is a managerial accounting report that describes all but which of the following:

A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor. A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

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

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. - Calculate the equivalent units of materials.

The term "process costing system" is used in reference to the number of trained individuals and computers required to process the collected cost information.

A company uses the weighted average method for inventory costing. During a period, Department B finished and transferred 50,000 units to Department C. Also in Department B during the period, 10,000 units were started but brought only to a stage of being 60% completed. The number of equivalent units produced by Department B during the period was:

Equivalent units of production refer to the number of units that could have been started and completed given the costs incurred during the period.

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 January, the production department of a process operations system completed and transferred to finished goods a total of 78,000 units. At the end of January, 9,000 additional units were in process in the production department and were 65% complete with respect to labor. The beginning inventory included labor cost of $37,100 and the production department incurred direct labor cost of $294,300 during January. Compute the direct labor 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.

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.