Exam 8: Process Costing

First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before transferring out the costs associated with units started and completed.

In October, one of the processing departments at Radiance Corporation had beginning work-in-process inventory of $29,000 and ending work-in-process inventory of $23,000. During the month, the cost of units transferred out from the department was $311,000. Required: Construct a cost reconciliation report for the department for the month of October.

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 1 16,000 Started in production during Novernber 100,000 Wark in process, Novernber 30 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 materials assuming Bentley uses weighted-average process costing?

Morgenstern Company had Work-in-Process Inventories that were 45% complete at the start of the month. Work-in-Process at the end of the month was 10% complete. Materials were added at the beginning of the process. If weighted-average process costing is used, the total equivalent units for materials will equal the number of units:

An operation costing system is:

The following data have been provided by Florrisant Corporation, which uses the weighted-average method in its process costing. The data are for the company's Assembly Department for October. Percent Complete Units Materials Conversion Work-in-process, October 1 900 55\% 50\% Units started into production during October 8,200 Units completed during October and transferred to the next department 7,100 Work-in-process, October 31 2,000 85\% 35\% Required: Compute the equivalent units of production for both materials and conversion costs for the Assembly Department for October using the weighted-average method.

The following data have been provided by Brice Corporation for the 3-D Printing Department. The company uses the FIFO method in its process costing. Units in process, August 1 : materials 60\% complete, conversion 30\% complete 900 Units started into production during August 8,400 Units started and completed during August 6,500 Units completed and transferred to the next department during August 7,400 Units in process, August 31 : materials 65\% complete, conversion 25\% complete 1,900 Required: Determine the equivalent units of production for the 3-D Printing Department for August using the FIFO method.

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 goods transferred to finished goods is:

Everglades Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Everglades uses first-in, first-out (FIFO) costing. Required: (use 4 decimal places in your calculations) a. Compute the equivalent units of production for each input. b. Compute the cost per equivalent unit. c. Compute the cost transferred out to finished goods. d. Compute the ending work-in-process inventory balance.

Equivalent units for a process costing system, using the weighted-average method, would be equal to:

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 - Equivalent units of production for materials are:

The Microprocessor Manufacturing Company produces a single product in a single processing department. The material is added when 25% of the conversion costs have been added. The Work-in-Process Inventory account on April 30 includes the following information: Beginning balance \1 ,382 Material 5,325 Labor 10,863 Overhead 15,012 During the month, the company finished and transferred 72,000 units out of the Work-in-Process Inventory. 9,000 units were in process at the beginning of the month, which were 40% complete. 8,000 units were in process at the end of the month, which were 70% complete. The company uses first-in, first-out (FIFO) process costing. Required (use 4 decimal places for computations): (a) Compute the equivalent units of production (EUP) for materials and conversion costs in April. (b) Compute the unit material costs and unit conversion costs for April. (c) Compute the total cost transferred out of the Work-in-Process Inventory during the month of April. (d) Compute the cost of the ending inventory for April.

The more prices change, the greater the difference between the costs assigned to units transferred out using weighted-average costing and the costs assigned to units transferred out using first-in, first-out (FIFO).