Exam 8: Process Costing

Holcomb Company uses the weighted-average method in its process costing system. The Shaping Department is the second department in its production process. The data below summarize the department's operations in January. Percent Complete with Units Respect to Conversion Beginning work-in-process inventory 3,800 90\% Transferred in from the prior department 53,000 during January Completed and transferred to the next department during January 51,300 Ending work-in-process inventory 5,500 30\% The accounting records indicate that the conversion cost that had been assigned to beginning work-in-process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department during January. What was the cost per equivalent unit for conversion costs for January in the Shaping Department? (Round your answer to 3 decimal places.)

Cordon Processing uses a process costing system to account for its solvent plant. Beginning inventory consisted of 14,000 gallons (80% complete as to materials, 55% complete as to conversion). Cordon added 213,000 gallons into the process during April. On April 30, there were 18,000 gallons still in process (60% complete as to materials, 45% complete as to conversion). Required: (a) Calculate the equivalent units of production for each input, assuming Cordon uses weighted-average. (b) Calculate the equivalent units of production for each input, assuming Cordon uses FIFO.

Which of the following characteristics applies to process costing, but does not apply to job order 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. - What are the total costs to be accounted for on the production cost report for Department #2 for the period?

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 - Total cost of the 16,000 units finished is:

Operation costing is used in manufacturing goods that have some common characteristics and some individual characteristics.

Racquet Master (RM) Sports manufactures and distributes two types of tennis rackets: Dominant Drive (DD) and Major Smash (MS). Both types of rackets go through Operations 1 and 3. MS also goes through Operation 2, which adds a layer of graphite for additional strength. All material is added at the beginning of their respective operations. The following information relates to a work order from Discount Warehouse, Inc. for 30,000 units of DD (Work order #286) and 8,000 units of MS (Work order #354). Work order\#286 Work order \#354 Direct materials: Operation 1 \ 120,000 \ 80,000 Operation 2 --- 20,000 Operation 3 45,000 30,000 Conversion costs: Operation 1 30,000 15,000 Operation 2 --- 25,000 Operation 3 14,793 14,896 Required: Assume that there are 3,000 units of DD and 2,000 units of MS in Operation 3 at the end of the reporting period that are 45% and 65% complete, respectively. Compute the ending inventory for Operation 3.

Cranford Company completed and transferred out 2,300 units in May 2020. There were 200 units in the Work-in-Process Inventory on May 31, 2020, 30% complete as to conversion costs and 100% complete as to materials. The month's charges for conversion costs and material costs were $9,440 and $6,250, respectively. There was no beginning inventory on May 1, 2020. What is the cost of the work transferred-out during May, assuming that Cranford uses weighted-average process costing?

Is cost accumulation easier under a process costing system or a job costing system?

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 the conversion costs in the month of September assuming Townson uses weighted-average process costing?

Department B had a beginning inventory of 400 units, 1/4 completed; an ending inventory of 300 units, 2/3 completed, and received 900 units during the period from Department A. What were the equivalent units of production of Department B, assuming weighted-average process costing?

An error was made by Marrow Company in computing the percentage-of-completion of the current year's ending Work-in-Process Inventory. The error resulted in the assignment of a lower percentage of completion to each component of the inventory than actually was the case. There was no beginning Work-in-Process Inventory. What is the effect of this error on (1) cost assigned to cost of goods completed for the period and (2) the computation of costs per equivalent unit?

Of the following process costing steps, which must be done last?

Which of the following statements is(are) false? (A) Operations costing accounts for material costs like job costing and conversion costs like process costing. (B) An automobile manufacturer is more likely to use an operations costing system than a process costing system.

Malcom Industries manufactures a silicone paste wax that goes through three processing departments: cracking, blending, and packing. All raw materials are introduced at the start of work in the cracking department, with conversion costs being incurred uniformly in each department. The Work-in-Process inventory account for the cracking department for July contains the following information: Work-in-Process Inventory (Cracking Department) Balance, July 1 ( 35,000 lbs, 4 / 5 done) \6 3,700 Direct materials (280,0001) 397,600 Conversion costs 189,700 Balance, July 31 (45,000 lbs, 2/3 done) ?? Costs transferred to Blending Dept ?? The beginning balance inventory consists of $43,400 in materials cost. Malcom uses the weighted-average method to account for its operations. Required: (Use 4 decimal places for computations.) (a) What would be the Cracking Department's inventory balance on July 31? (b) What would be the cost transferred to the Blending Dept. in July?

It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-in-Process Inventory.

Carlton Electronics manufactures three cell phone models, General, Premium, and Deluxe, which differ in the components included. Production takes place in two departments, Assembly and Special Packaging. Batches of General phones are made to service government military contracts. Premium model phones are specific to corporate contracts. Deluxe model phones are sold commercially through big-box stores. Explain why operation costing might be a consideration for Carlton.

Additional materials are added in the second department of a four-department production process. However, this addition does not increase the number of units being produced in the second department, but will:

Bentwood 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 900 Materials costs \ 17,100 Conversion costs \ 10,200 Percent complete with respect to materials 70\% Percent complete with respect to conversion 25\% Units started into production during the month 7,300 Units transferred to the next department during the month 6,100 Materials costs added during the month \ 148,200 Conversion costs added during the month \2 47,500 Ending work-in-process inventory: Units in ending work-in-process inventory 2,100 Percent completewith respect to materials 80\% Percent complete with respect to conversion 35\% - 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.)

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, Novernber 16,000 Started in production during Novernber 100,000 Wark in process, Novernber 3 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 is the equivalent unit cost for the conversion costs assuming Bentley uses first-in, first-out (FIFO) process costing?