Exam 3: Process Costing and Analysis

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department: The cost per equivalent unit of production for conversion is:

Prepare the required general journal entry to record the following transactions for the O'Harra Company. a. Used $78,000 of direct labor in the production department. b. Used $17,000 of indirect labor.

In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

If Department R uses $60,000 of direct materials and Department S uses $15,000 of direct materials, the following journal entry would be recorded by the process costing system:

What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

The Finishing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry:

Describe the flow of labor in a process costing system, including accounts used.

In process costing, indirect materials are always classified as factory overhead, even if they are linked with a specific production process or department.

Hybrid systems contain features of both process and job order operations.

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the cost per equivalent unit of materials.

In a process operation, the direct labor of a production department includes:

In process costing, the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 110,000. Units completed and transferred out: 135,000. Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850. Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150. Calculate the cost per equivalent unit of conversion.

In a process costing system costs are measured upon completion of each job.

In process costing, factory overhead incurred does not usually equal that applied, which yields either ________ or ________ overhead.

Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the FIFO method of inventory costing. Beginning Work in Process inventory: Physical units…………………………………………... 5,000 units % complete for materials………………………………. 70% % complete for labor and overhead……………………. 25% Materials cost from May……………………………….. $7,350 Labor and overhead cost from May……………………. $3,125 Product started and completed: Physical units…………………………………………… 40,000 units Ending Work in Process inventory: Physical units………………………………………….... 4,000 units % complete for materials………………………………. 40% % complete for labor and overhead ……………………. 10% Manufacturing costs for June: Materials………………………………………………… $96,975 Labor and overhead……………………………………... $79,470 Compute equivalent units for direct materials, direct labor and overhead for June.

A company's January 1 Work in Process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of conversion.

Prepare the required general journal entries to record the following transactions for the Ringer Company. a. Purchased $40,000 of raw materials on account. b. Used $12,000 of direct materials in the production department. c. Used $5,000 of indirect materials.

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is: