Exam 20: Process Cost Systems

Match each phrase that follows with the term (a-e) it describes. -The portion of whole units that are complete with respect to materials or conversion costs

Match each phrase that follows with the term (a-h) it describes. -Conversion costs

Job order manufacturing and process manufacturing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

Use this information about Penny, Inc. to answer the questions that follow. ​ Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about the July activities: ​ ​ ​ -Using the FIFO method, the number of equivalent units of conversion costs was

In a process cost system, the amount of work in process inventory is valued by

Equivalent units of production are always the same as the total number of physical units finished during the period.

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 8,000 liters in beginning work in process inventory (60% complete). During the period 70,000 liters were completed. The ending work in process was 3,000 liters (60% completed). What are the total equivalent units for direct materials under the FIFO method if materials were added at the beginning of the process?

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received 67,000 liters from the Purifying Department. During the period, the Bottling Department completed 65,000 liters, including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How many liters were started and completed during the period?

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

Use this information about Penny, Inc. to answer the questions that follow. ​ Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about the July activities: ​ ​ ​ -Using the FIFO method, the number of units started and completed in July was

Blue Lake Water Company has two departments, Purifying and Bottling. The Bottling Department received 76,000 liters from the Purifying Department. During the period, the Bottling Department completed 74,000 liters, including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How many liters were started and completed during the period?

Companies that use the average costing method for process costing have unit costs that include costs from more than one accounting period.

Everett Company's inventory at December 31 and the costs charged to Work in Process-Department B during December are as follows:​ 500 units, 60\% completed 3,460 From Department A, 10,000 units 36,300 Direct labor 7,960 Factory overhead 12,500 During December, all direct materials are transferred from Department A, and the units in process at December 1 were completed. Of the 10,000 units entering the department, all were completed except 1,200 units that were 25% completed as to conversion costs. Inventories are costed by the first-in, first-out method.Prepare a cost of production report for December.

All costs of the processes in a process costing system ultimately pass through the cost of goods sold account.

Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of $7,000. During the period, 4,000 units of direct materials were added at a cost of $8,200 and 4,500 units were completed. At the end of the period, 500 units were 40% completed. All materials are added at the beginning of the process. Direct labor was $28,700, and factory overhead was $4,510. The cost of the 500 units in process at the end of the period if the first-in, first-out method is used to cost inventories was

The cost of energy consumed in producing good units in the Bottling Department of Mountain Springs Water Company was $36,850 and $39,060 for June and July, respectively. The number of equivalent units produced in June and July was 55,000 and 62,000 liters, respectively. Evaluate the change in the cost of energy between the two months.

The FIFO method of process costing is simpler than the average cost method.

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received 58,000 liters from the Purifying Department. During the period, the Bottling Department completed 56,000 liters, including 4,000 liters of work in process at the beginning of the period. The ending work in process was 6,000 liters. How many liters were started and completed during the period?

In applying the first-in, first-out method of costing inventories, if 8,000 units that are 30% completed are in process on June 1, 28,000 units are completed during June, and 4,000 units are 80% completed on June 30, the number of equivalent units of production for June is 28,600.

Fast-Flow Paints produces mixer base paint through a two-stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journalize each event if appropriate; if not, provide a short narrative reason as to why you chose not to journalize the action. Nelson, the production manager, accepts an order to continue processing the current run of mixer base paint. (a)Materials worth $27,000.00 are withdrawn from raw materials inventory. Of this amount, $25,500.00 will be issued to the Mixing Department, and the balance will be issued to the Maintenance Department to be used on production line machines. (b)Nelson calculates that labor for the period is $12,500.00. Of this amount, $1,750.00 is for maintenance and indirect labor. The remainder is directly associated with mixing. (c)Nelson, who is paid a salary but earns about $35.00 per hour, spends one hour inspecting the production line. (d)The manufacturing overhead drivers for mixing are hours of mixer time at $575.00 per hour, and material movements from materials at $125.00 per movement. An inspection of the machine timers reveals that a total of eight hours has been consumed in making this product. An inspection of "stocking orders" indicates that only one material movement was utilized to load the raw materials. (Note: All values have been journalized to Factory Overhead. You need only apply them to the production run.) (e)Within Fast-Flow, items are transferred between departments at a standard cost. This production run has created 4,015 gallons of mixer base paint. This paint is transferred to Packaging at a standard cost of $10.05 per gallon. (Round calculation to the nearest whole dollar.) (f)Packaging draws $755.00 of materials for packaging of this production run. (g)Packaging documents that 12 hours of direct labor at $10.25 per hour were consumed in the packaging of this production run. (h)Packaging uses a cost driver of direct labor hours to allocate manufacturing overhead at the rate of $25.00 per hour. (i)Packaging transfers 4,015 gallons of packaged goods to Finished Goods Inventory at a standard cost of $10.34 per gallon. (Round calculation to the nearest whole dollar.)??