Exam 17: Process Costing

The purpose of the equivalent-unit computation is to ________.

Which of the following statements best describes conversion costs?

Which of the following is true regarding estimates of completion of units in a process costing system?

Assembly department of Zahra Technologies had 200 units as work in process at the beginning of the month. These units were 45% complete. It has 300 units which are 35% complete at the end of the month. During the month, it completed and transferred 500 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method. Calculate the total equivalent units in ending inventory for assignment of conversion costs?

The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Required: Prepare a production cost worksheet using weighted-average costing for the finishing department.

The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 147,000 chairs. During the month, the firm completed 180,000 chairs and transferred them to the Finishing Department. The firm ended the month with 21,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel. How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the production cycle.

Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 500 kgs of tungsten carbide at $60 per kg. It started manufacture of 4000 vases and completed and transferred 3900 vases during the month. It has 100 vases in the process at the end of the month. It incurred direct labor charges of $1400 and other manufacturing costs of $600, which included electricity costs of $500. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 55% complete in respect of conversion costs. Which of the following journal entries would be correct to record direct labor for July?

Job-costing and process-costing are mutually exclusive, hence a hybrid costing system that combines elements of both job and process costing cannot be used.

Process-costing systems using standard costs record standard direct material costs in Direct Materials Control and standard conversion costs in Conversion Costs Control.

When calculating the equivalent units, we should only focus on dollar amounts of inventory.

In a series of interdepartmental transfers, each department is regarded as separate and distinct for accounting purposes.

Describe the differences between process costing and job costing. Discuss some typical products which would be more likely to use process costing as compared to some which would be more likely to use job costing.

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,400 models. During the month, the company completed 11,200 models, and transferred them to the Distribution Department. The company ended the month with 2200 models in ending inventory. There were 3000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs. What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October? (Round intermediary calculations to the nearest cent.)

Which of the following is the costing system used for mass produced like or similar units of products?

The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 155,000 chairs. During the month, the firm completed 185,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel. What were the equivalent units for conversion costs for February if the beginning inventory was 70% complete as to conversion costs and the ending inventory was 45% complete as to conversion costs?

Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,100 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,800 chairs in ending inventory. There were 15,700 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Comfort. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 75% complete as to conversion costs. What were the equivalent units for conversion costs during February?

Which of the following entries is used to record the standard costs of direct materials assigned to units worked on and total direct materials variances?

The weighted average method of process costing assigns the cost of equivalent units worked on during the current period first to complete beginning inventory, next to start and complete new units, and finally to units in ending work-in-process inventory.

Which of the following is an assumption under FIFO process-costing method?

Which of the following entries is used to record direct materials purchased and used in production during a month in the Assembly department, before transferring the goods to Testing department?