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Exam 3: Process Costing and Analysis

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Question 121

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Sparky Corporation uses the FIFO 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 equivalent units of conversion.

A) 165,000
B) 130,250
C) 140,000
D) 144,000
E) 110,000

F) A) and B)
G) A) and E)

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Question 122

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An ________is the number of units that could have been started and completed given the costs incurred during the period.

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Question 123

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If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

A materials consumption report is used instead of materials requisitions in companies where materials move continuously through the manufacturing process.

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

When direct labor and overhead enter the production process at the same rates, it is appropriate to use a conversion cost per equivalent unit.

In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

A process costing system records all factory overhead costs incurred directly in the Work in Process Inventory accounts.

A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 30,000 units, 75% complete with respect to direct labor and overhead. The department completed and transferred out 127,500 units this period. The ending inventory consists of 20,000 units that are 25% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is:

The term "process costing system" refers to the number of trained individuals and computers required to process the collected cost information.