Exam 20: Process Cost Systems

Describe the flow of materials in a process cost accounting system.

In process cost accounting, the costs of direct materials and direct labor are charged directly to

The cost per equivalent unit of direct materials and conversion in the Bottling Department of Beverages on Jolt Company is $0.47 and $0.15, respectively. The equivalent units to be assigned costs are as follows:? The beginning work in process inventory had a cost of $3,500. Determine the cost of completed and transferred out production and the ending work in process inventory.

The FIFO method separates work done on beginning inventory in the previous period from work done on it in the current period.

Eagle Co. manufactures bentwood chairs and tables. Wood for both products is steam-bent in the same process, but different types of wood are used for each product. Thus, materials cost is identified separately to each product. One production cycle uses 20 board feet. Labor cost is identified to the process as a whole, as is overhead cost. Data for the month of July follow:​ (a)Compute July's predetermined rate for the steam-bending process (b)Compute July's direct material costs for chairs and tables (c)Compute conversion costs to be applied to chairs and tables in July (d)Journalize the following entries: (1)Assignment of direct materials to chairs and tables (2)Application of conversion costs to chairs and tables (3)The transfer of completed chairs and tables to the Finishing Department. All of July's production was completed in July.

Explain the concept of equivalent units. Give an example to validate your explanation.

Tough Hardware purchases raw materials and processes those purchases through a receiving/inspection process prior to stocking for production. Tough places three purchase orders for materials for production and receives the goods that day. The first purchase order is for 2,500 1/2" × 96" milling blanks at $2.75 each. The second is for 4,000 pieces of 48" × 96" × 1" sheet steel at $15.55 each. The third purchase order is for five 5-gallon drums of milling lubrication oil at $475.00 per barrel.? The receiving/inspection process is completed and the goods are transferred from Receiving Inventory to Raw Materials. The Receiving/Inspection Department assigns manufacturing overhead of $55.00 per purchase order as well as $2.75 per piece on metal goods and $35.00 per container on fluids. All labor is allocated through overhead. (a) Prepare the journal entry to purchase and receive these items to Receiving Inventory on account. (b) Assign overhead to the metal goods. (c) Assign overhead to the fluid goods. (d) Transfer all goods to Raw Materials Inventory.

Department K had 3,000 units 45% completed in process at the beginning of the period, 17,000 units completed during the period, and 1,200 units 40% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.

Match each phrase that follows with the term (a-e) it describes. -Work centers for processing in a lean production process

Carolwood Company manufactures widgets and uses process costing. The status of the beginning and ending inventory is:?? Beginning inventory 30\% of the manufacturing process is complete Ending inventory 55\% of the manufacturing process is complete Direct materials are added to the manufacturing process in stages. None are added when production begins. Approximately half of the materials are added when the product is 25% complete. The other half is added when the product is 50% complete.?What percentage complete are beginning inventory and ending inventory with respect to direct materials (DM) and conversion costs (CC)?

Companies recognizing the need to simultaneously produce products with high quality, low cost, and instant availability have adopted a lean manufacturing philosophy.

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

The inventory at June 1 and costs charged to Work in Process-Department 60 during June are as follows:​ During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1. On June 30, the inventory of work in process consisted of 4,600 units that were 40% completed. Inventories are costed by the average cost method, and all materials are added at the beginning of the process.Determine the following, presenting your computations: (a)Equivalent units of production for conversion cost (b)Conversion cost per equivalent unit and material cost per equivalent unit (rounded to the nearest cent) (c)Total and unit cost of finished goods completed in the current period (d)Total cost of work in process inventory at June 30

All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to whole dollars)?

Use this information about Department G to answer the questions that follow. ​ Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: ​ ​ -Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, determine the direct materials cost and conversion cost per unit (rounded to the nearest cent), respectively.

For which of the following businesses would a process cost system be appropriate?

The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was

Conversion costs include materials, direct labor, and factory overhead.

Mocha Company manufactures a single product by a continuous process involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period for direct materials is

Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories?