Exam 8: Process Costing

The debits to Work-in-Process for Department #2 for the month of April of the current year, together with information concerning production, are presented below. All direct materials come from Department #1. The units completed include the 1,200 in process at the beginning of the period. Department #2 uses FIFO costing. - The cost of the ending Work-in-Process Inventory is:

Operation costing accounts for material costs like job costing and conversion costs like process costing.

Garrison Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work-1n-process inventory: Units in beginning work-in-process inventory 600 Materials costs \ 6,600 Conversion costs \ 2,700 Percent complete with respect to materials 60\% Percent complete with respect to conversion 10\% Units started into production during the month 7,000 Materials costs added during the month \ 102,200 Conversion costs added during the month \ 259,200 Ending work-in-process inventory: Units in ending work-in-process inventory 1,500 Percent completewith respect to materials 55\% Percent complete with respect to conversion 10\% - The cost per equivalent unit for conversion costs for the first department for the month is closest to: (Round your answer to 2 decimal places.)

The Safety Chemical Company produces a special kind of body oil that is widely used by professional sports trainers. The oil is produced in three processes: Refining, Blending, and Mixing. Raw oil materials are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the blending process when processing is 50% completed. The following Work-in-Process account for the Refining Department is available for the month of July. The July 1 Work-in-Process balance contains $1,500 in material costs. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Work-in-Process: Refining }$ \begin{array}{lr}\text {Beginning balance (5,000 \mathrm{gal}, 80 \% complete)}&\$6,500\\\text { Materials(30,000) gal } & 12,300 \\\text { Direct labor } & 14,500 \\\text { Overhead } & 21,750\\\text { Ending balance }(6,000 \mathrm{gal}, 2/3\text { complete }) & ? ?\end{array} The Safety Chemical Company uses weighted-average costing. Required: (Use 4 decimal places for computations.) (a) Compute the equivalent units of production for Refining for July. (b) Compute the material cost per unit and the conversion cost per unit for July. (c) Compute the costs transferred to the Blending Department for July. (d) Compute the July 31 Work-in-Process Inventory balance.

The following information pertains to Oklahoma Co.'s Tulsa Division for the month of April: Units Materials Begirning Work-in-Process 15,000 \5 ,500 Started in April 40,000 \ 18,000 Units completed 42,500 Ending Work-in-Process 12,500 All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit of materials is: (CPA adapted) (Round your answer to 2 decimal places.)

In May, one of the processing departments at Patton Corporation had beginning work-in-process inventory of $31,000. During the month, $369,000 of costs were added to production and the cost of units transferred out from the department was $368,000. Required: Construct a cost reconciliation report for the department for the month of May.

In general, weighted-average costing is simpler to use while first-in, first-out (FIFO) costing provides greater decision-making benefits to managers.

The Lakeside Company uses a weighted-average process costing system. The following data are available: Beginning inventory -0- Units started in production 20,000 Units finished during the period 16,000 Units in process at the end of the period (complete as to materials, 4,000 1/4 complete as to labor and overhead) Cost of materials used \ 35,200 Labor and overhead costs \ 37,400 - Cost per equivalent unit of labor and overhead is:

The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing. - What are the equivalent units of production for the conversion costs during the period?

Pattern Corporation uses the FIFO method in its process costing. The following data pertain to its Cutting Department for August. Percent Complete Units Materials Conversion Work-in-process, August 1 500 50\% 45\% Units started into production during August 8,100 Units cornpleted during August and transferred to the next departrnent 7,200 Work-in-process, August 31 1,400 75\% 30\% Required: Compute the equivalent units of production for both materials and conversion costs for the Cutting Department for August using the FIFO method.

Paradise Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department, Cutting, for a recent month. Required: Using the weighted-average method: a. Determine the equivalent units of production for materials and conversion costs. b. Determine the cost per equivalent unit for materials and conversion costs. c. Determine the cost of units transferred out of the department during the month. d. Determine the cost of ending work-in-process inventory in the department.

Madison Corporation's production cycle starts in the Processing Department. The following information is available for April: Units Work-in-process, April l (25\% complete) 40,000 Total units in process during April 280,000 Work-in-process, April 30(60\% complete) 25,000 Materials are added at the beginning of the process in the Processing Department. What are the equivalent units of production for the month of April, assuming Madison uses the weighted-average method? Materials Conversion Costs A. 240,000 260,000 B. 255,000 235,000 C. 280,000 270,000 D. 315,000 285,000

Parkway Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the Work-in-Process Inventory on July 1 had materials assigned to them of $32,000, even though they were only 5% complete as to materials. No additional units were started during July, and there were no unfinished units on hand on July 31. What is the material cost per equivalent unit for July, assuming Parkway uses weighted-average process costing?

The equivalent unit concept refers to the actual amount of work during the period stated in terms of the work required to complete an equal number of whole units.

The Townson Manufacturing Company has gathered the following information for the month of September: • 6,000 units in the beginning Work-in-Process Inventory (75% complete as to materials, 1/3 complete with respect to the conversion costs). • 60,000 units were started into production. • 50,000 units were completed and transferred to the next department. • The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect to conversion costs. - What are the equivalent units of production (EUPs) for materials in the month of September assuming Townson uses weighted-average process costing?

If materials are added continuously throughout the production process, then the equivalent units for materials will always equal the equivalent units for the conversion costs.

Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November. (CMA Exam adapted) Units Work in process, November 1^st 16,000 Started in production during November 100,000 Work in process, November 30^th 24,000 The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs. Costs pertaining to November are as follows: Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead, $15,240. Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing overhead, $391,160. - What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses first-in, first-out (FIFO) process costing?

The Safety Chemical Company produces a special kind of body oil that is widely used by professional sports trainers. The oil is produced in three processes: Refining, Blending, and Mixing. Raw oil materials are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the blending process when processing is 50% completed. The following Work-in-Process account for the Blending Department is available for the month of July. The July 1 Work-in-Process balance contains $10,370 in conversion costs, and $1.56/unit in costs transferred in from the Refining Department. Work-in-Process: Blending Beginning balance (8,000 gal, 30\% complete) \ 22,850 Coststransferred in from Refining (29,000 gal.) 48,200 Materials 20,810 Direct labor 5,748 Overhead 11,600 Ending balance (4,000 gal. , 40\% complete) ?? The Safety Chemical Company uses first-in, first-out (FIFO) costing. Required (use 4 decimal places for computations): (a) Compute the equivalent units of production for Blending. (b) Compute the unit costs in the Blending Department for the month of July. (c) Compute the costs transferred out to the Mixing Department for July. (d) Compute the July 31 Work-in-Process Inventory balance.

Predetermined manufacturing overhead rates can be used in all of the following costing systems except:

The Safety Chemical Company produces a special kind of body oil that is widely used by professional sports trainers. The oil is produced in three processes: Refining, Blending, and Mixing. Raw oil materials are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the blending process when processing is 50% completed. The following Work-in-Process account for the Refining Department is available for the month of July. The July 1 Work-in-Process balance contains $1,500 in material costs. The Safety Chemical Company uses first-in, first-out (FIFO) costing. Required (use 4 decimal places for computations): (a) Compute the equivalent units of production for Refining for July. (b) Compute the material cost per unit and the conversion cost per unit for July. (c) Compute the costs transferred to the Blending Department for July. (d) Compute the July 31 Work-in-Process Inventory balance.