Exam 17: Process Costing

Under the FIFO method of process-costing, costs incurred and units produced in the current period are used to calculate the cost per equivalent unit of work in the current period in contrast the weighted-average method which merges the units and costs of the previous period with that of the current period.

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 25% complete at the end of the month. During the month, it completed and transferred 600 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method. What is the number of equivalent units of work done during the month with regards to direct materials?

Emerging Dock Company manufactures boat docks on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Which of the following journal entries records the standard costs of direct materials assigned to units worked on and total direct materials variances assuming that the Assembly Department used 15% less materials than expected?

Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing. The following information is available for the month of March 2017 for the Assembly department. What is the conversion cost per equivalent unit in March? (Round to the nearest cent)

Big Bernard Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Big Bernard's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $950,000, while conversion costs equaled $4,625,000. Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed. Ending inventory was 50% complete as to conversion costs. Required: a.What is the total manufacturing cost per chip for June? b.Allocate the total costs between the completed chips and the chips in ending inventory.

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. What is the total amount debited to the Work-in-Process account during the month of June?

Job-costing systems separate costs into cost categories according to when costs are introduced into the process of manufacture.

Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing. The following information is available for the month of March 2017 for the Assembly department. What amount of conversion costs is assigned to the ending Work-in-Process account for March? (Round intermediary dollar amounts to the nearest cent and unit amounts to the nearest whole unit.)

When calculating the costs to be transferred using the FIFO method, we should not include costs assigned in the previous period to units that were in process at the beginning of the current period but are now included in the units transferred.