Exam 20: Process Cost Systems

The journal entry to record the flow of costs into Department 2 for applied overhead is

Conversion costs are usually incurred evenly throughout a process.

The cost of production report reports the costs charged to production and the costs allocated to finished goods and work in process.

The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is $28,072. The conversion cost for the period in the Bottling Department is $10,275. The total equivalent units for direct materials and conversion are 63,800 and 68,500, respectively. Determine the direct materials and conversion cost per equivalent unit. Round answers to nearest cent.

If the products of a manufacturing process are produced to customer specifications, a process cost system is more appropriate than a job order cost system.

Which of the following best describes the effect on direct labor when management adopts a lean production process?

The Bottling Department of Mountain Springs Water Company had 4,000 liters in beginning work in process inventory (40% complete). During the period, 66,000 liters were completed. The ending work in process inventory was 3,000 liters (70% complete). Using the FIFO method, what are the equivalent units for conversion costs?

Match each phrase that follows with the term (a-e) it describes. -Measures the quantity of output of production relative to the inputs

Which of the following is not a characteristic of a process cost system?

Kamin Company's Mixing Department had a beginning inventory of 4,000 units, which had accumulated conversion costs of $55,000. During the period, the Mixing Department accumulated conversion costs of $92,000 and started 8,000 new units. Ending inventory was 2,500 units which were 40% complete with respect to conversion costs. Kamin uses the average cost method to cost inventories.​Calculate the cost per equivalent unit for conversion costs in the Mixing Department.

Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June, and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, what was the number of equivalent units of production for conversion costs for the period?

In a process costing system, each process will have a work in process inventory account.

One of the differences in accounting for a process costing system compared to a job order system is that the amounts used to transfer goods from one department to the next come from the cost of production report instead of job cost cards.

The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is $27,225. The conversion cost for the period in the Bottling Department is $7,596. The total equivalent units for direct materials and conversion are 60,500 and 63,300, respectively. Determine the direct materials and conversion cost per equivalent unit. Round answers to nearest cent.

Alexandra Company's Molding Department opened on July 1. During July, 70,000 units were completed and transferred out to the next department. On July 31, the 10,000 units that remained in inventory were 40% complete with respect to conversion costs and 100% complete with respect to materials.? How many equivalent units of work did the Molding Department complete during July for materials and conversion costs?

On August 1, Jones Corporation's Packaging Department had work in process inventory of 8,000 units that were 75% complete with respect to materials and 30% complete with respect to conversion costs. The cost of these units was $99,525 ($62,000 transferred in from previous departments, $28,775 in materials, and $8,750 in labor and overhead). During August, 125,000 units were transferred into the department. These units had accumulated costs in previous departments of $1,418,560. The Packaging Department incurred costs of $799,225 for materials and $498,010 for conversion costs in August and transferred 131,000 units out of the department. The 2,000 units remaining in ending inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs. Jones uses the average cost method to cost its inventories.​ (a) Calculate the cost per equivalent unit for transferred-in costs, materials, and conversion costs (rounded to the nearest cent). (b) Calculate the cost of the units transferred out of the department. (c) Calculate the cost of the ending inventory.

Match each phrase that follows with the term (a-h) it describes. -Costing system used by a company producing computer chips

Match each business that follows to the type of costing system (a or b) it would typically use. -Flour mill

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,000 liters in beginning work in process inventory (30% complete). During the period, 71,000 liters were completed. The ending work in process was 5,000 liters (70% completed). What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process?

Gilbert Corporation had 25,000 finished units and 8,000 units 35% complete. The equivalent units totaled 30,200.