Larner Company uses the weighted-average method in its process costing system.Operating data for the first processing department for the month of June appear below: \[\begin{array} { | l | r | r | } \hline & \text { Units } & \text { Percentage complet } \\ \hline \begin{array} { l } \text { Beginning work in process } \\ \text { inventory } \end{array} & 24,000 & 40 \% \\ \hline \begin{array} { l } \text { Started into production } \\ \text { during June } \end{array} & 86,000 & \\ \hline \begin{array} { l } \text { Ending work in process } \\ \text { inventory } \end{array} & 19,000 & 20 \% \\ \hline \end{array}\] According to the company's records,the conversion cost in beginning work-in-process inventory was $68,064 at the beginning of June.Additional conversion costs of $585,324 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

A) $5.575. B) $6.174. C) $6.892. D) $7.090. A) $5.575. B) $6.174. C) $6.892. D) $7.090. B

Glo Co.,a manufacturer of combs,uses the weighted-average method in its process costing system.The company sold 125,000 units during the month of April.There is only one processing department.The following additional information is provided: $\begin{array}{|l|r|} \hline\text { Inventory at April 1: }\\ \hline \text { Work in process } & \text { None } \\ \hline \text { Finished goods } & 37,500 \text { units } \\ \hline \text { Inventory at April 30: } & \\ \hline \begin{array}{l} \text { Work in process (75\% complete as to }& \\ \text { conversion costs) } \end{array} & 8,000 \text { units } \\ \hline \text { Finished goods } & 30,000 \text { units } \\ \hline \end{array}$ What were the equivalent units of production for conversion costs for April?

A) 126,500 units. B) 125,500 units. C) 123,500 units. D) 117,500 units. A) 126,500 units. B) 125,500 units. C) 123,500 units. D) 117,500 units.

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work-in-process inventory consisted of 50,000 units that were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows: $\begin{array} {| l | r | r | } \hline & \text { Units } & \text { Conversion costs } \\ \hline \begin{array} { l } \text { Work in process inventory } \\ \text { on May 1 } \end{array} & 50,000 & \$ 30,000 \\ \hline \begin{array} { l } \text { Units started into } \\ \text { production } \end{array} & 180,000 & \\ \hline \begin{array} { l } \text { Conversion costs incurred } \\ \text { during May } \end{array} & & \$ 690,000 \\ \hline \begin{array} { l } \text { Units completed and } \\ \text { transferred out during the } \\ \text { month } \end{array} & 190,000 & \\ \hline \end{array}$ -Assuming that Cherrington Company uses the FIFO method,the conversion costs for work in process ending inventory in May is closest to which of the following? (Round your intermediate answers two decimal places)

A) $34,480. B) $27,920. C) $32,880. D) $34,320. A) $34,480. B) $27,920. C) $32,880. D) $34,320.

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work-in-process inventory consisted of 50,000 units that were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows: $\begin{array} {| l | r | r | } \hline & \text { Units } & \text { Conversion costs } \\ \hline \begin{array} { l } \text { Work in process inventory } \\ \text { on May 1 } \end{array} & 50,000 & \$ 30,000 \\ \hline \begin{array} { l } \text { Units started into } \\ \text { production } \end{array} & 180,000 & \\ \hline \begin{array} { l } \text { Conversion costs incurred } \\ \text { during May } \end{array} & & \$ 690,000 \\ \hline \begin{array} { l } \text { Units completed and } \\ \text { transferred out during the } \\ \text { month } \end{array} & 190,000 & \\ \hline \end{array}$ -Assuming that Cherrington Company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for May,rounded to the nearest cent?

A) $4.19. B) $4.00. C) $3.64. D) $3.83. A) $4.19. B) $4.00. C) $3.64. D) $3.83.

Adam Company uses the weighted-average method in its process costing system. The following information for the Assembly Department was obtained from the accounting records for September (all materials are added at the beginning of the process): $\begin{array}{l} \begin{array} {| l | r | r | } \hline & \text { Number of Units } & \begin{array} { r } \text { Labour and overhead } \\ \text { percentage complete } \end{array} \\ \hline \begin{array} { l } \text { Work in process inventory, } \\ \text { Sept. 1 } \end{array} & 60,000 & 15 \% \\ \hline \begin{array} { l } \text { Transferred in the during } \\ \text { the month } \end{array} & 105,000 & \\ \hline \begin{array} { l } \text { Work in process inventory, } \\ \text { Sept. 30 } \end{array} & 40,000 & 20 \% \\ \hline \end{array}\\\\\\\\ \begin{array} { |l | r | r | r | } \hline & \text { Transferred In } & \text { Materials } & \begin{array} { r } \text { Labour and } \\ \text { overhead } \end{array} \\ \hline \begin{array} { l } \text { Beginning work-in- } \\ \text { process inventory } \end{array} && \$ 30,000 & \$ 16,000 \\ \hline \begin{array} { l } \text { Cost added during } \\ \text { the month } \end{array} & &\$ 63,000 & \$ 320,000 \\ \hline \end{array} \end{array}$ -The "Total cost to be accounted for" section of the production report for the month will show an amount equal to which of the following?

A) $604,500. B) $498,500. C) $429,000. D) $106,000. A) $604,500. B) $498,500. C) $429,000. D) $106,000.

Jawson Company uses the weighted-average method in its process costing system.Operating data for the Painting Department for the month of April appear below: \[\begin{array} { | l | r | r | } \hline & \text { Units } & \text { Percentage complete } \\ \hline \text { Beginning work in process } & 6,300 & 10 \% \\ \hline \text { inventory } & & \\ \hline \text { Transferred in from the } & 65,600 & \\ \text { prior department during } \\ \text { April }\\ \hline\text { Ending work in process } & 4,600 & 70 \% \\ \text { inventory }\\ \hline \end{array}\] What were the equivalent units of production for conversion costs in the Painting Department for April?

A) 67,300 units. B) 68,820 units. C) 70,520 units. D) 63,900 units. A) 67,300 units. B) 68,820 units. C) 70,520 units. D) 63,900 units.

The activity in Nolan Company's Blending Department for the month of April is given below: $\begin{array} {| l | r | r | } \hline & \text { Number of Units } & \begin{array} { r } \text { Labour and overhead } \\ \text { percentage complete } \end{array} \\ \hline \begin{array} { l r } \text { Work in process inventory, } \\ \text { April 1 } \end{array} & 8,000 & 50 \% \\ \hline \begin{array} { l } \text { Transferred in the during } \\ \text { the month } \end{array} & 50,000 & \\ \hline \begin{array} { l } \text { Work in process inventory, } \\ \text { April 30 } \end{array} & 10,000 & 70 \% \\ \hline \end{array}$ All materials are added at the beginning of processing in the Blending Department. -Using the weighted-average method,what are the equivalent units of production for material for the month?

A) 48,000 units. B) 50,000 units. C) 58,000 units. D) 52,000 units. A) 48,000 units. B) 50,000 units. C) 58,000 units. D) 52,000 units.

Reid Company uses a process costing system in which units go through several departments. In the Cutting Department for June, units in the beginning work-in-process inventory were 80% complete with respect to conversion costs. Units in the ending work-in-process inventory were 25% complete with respect to conversion costs. Other data for the department for June are as follows: $\begin{array} { l | r | r | } \hline & \text { Units } & \text { Conversion costs } \\ \hline \begin{array} { l } \text { Work in process inventory } \\ \text { on June 1 } \end{array} & 15,000 & \$ 50,200 \\ \hline \begin{array} { l } \text { Units started into } \\ \text { production } \end{array} & 145,000 \\ \hline \begin{array} { l } \text { Conversion costs incurred } \\ \text { during June } \end{array} & & \$ 175,700 \\ \hline \begin{array} { l } \text { Units completed and } \\ \text { transferred to the next } \\ \text { department during June } \end{array} & 130,000 & \\ \hline \end{array}$ -Assuming that the company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for June,rounded to the nearest cent?

A) $1.64. B) $1.56. C) $1.74. D) $1.48. A) $1.64. B) $1.56. C) $1.74. D) $1.48.

The following information was obtained from the records of the first processing department of Keith Manufacturing Company for the month of February. The company uses the FIFO method in its process costing system. $\begin{array}{|l|r|r|} \hline & \text { Number of Units } & \begin{array}{r} \text { Labour and overhead } \\ \text { percentage complete } \end{array} \\ \hline \begin{array}{l} \text { Work in process inventory, } \\ \text { February 1 } \end{array} & 15,000 & 30 \% \\ \hline \begin{array}{l} \text { Started in assembly during } \\ \text { the month } \end{array} & 60,000 & \\ \hline \begin{array}{l} \text { Work in process inventory, } \\ \text { February 28 } \end{array} & 20,000 & 20 \% \\ \hline \end{array}$ All materials are added at the beginning of the manufacturing process. - What are the equivalent units of production for material for the month?

A) 50,000 units. B) 60,000 units. C) 54,500 units. D) 75,000 units. A) 50,000 units. B) 60,000 units. C) 54,500 units. D) 75,000 units.

Information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company follow:$\begin{array} {| l | r | r | } \hline & \text { Number of Units } & \begin{array} { r } \text { Conversion costs } \\ \text { percentage complete } \end{array} \\ \hline \begin{array} { l } \text { Beginning work in process } \\ \text { inventory } \end{array} & 11,000 & 35 \% \\ \hline \begin{array} { l } \text { Units started into } \\ \text { production } \end{array} & 120,000 & \\ \hline \begin{array} { l } \text { Units completed and } \\ \text { transferred out } \end{array} & 114,000 & 30 \% \\ \hline \begin{array} { l } \text { Ending work in process } \\ \text { inventory } \end{array} & 17,000 & \\ \hline \end{array}$ The beginning work-in-process inventory included $11,000 of conversion cost. During the month, the Refining Department incurred an additional $290,000 in conversion costs. - Assuming that the company uses the FIFO method,what is the cost per equivalent unit for conversion costs for the month in the refining Department,rounded to the nearest cent?

A) $2.52. B) $2.54. C) $2.44. D) $2.59. A) $2.52. B) $2.54. C) $2.44. D) $2.59.

Exam 6: Systems Design: Process Costing

Selah Manufacturing makes a quality-improvement device for the aeronautical industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: Number of Units Beginning work in process inventory 16,000 Units started into production during May 100,000 Units completed during May 92,000 Ending work in process inventory 24,000 The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows: Materials Conversion Total Beginning work-in- process inventory \ 54,560 \ 35,560 \ 90,120 Costs incurred during May \ 468,000 \ 574,040 \ 1,042,040 Total \ 522,560 \ 609,600 \ 1,132,160 -What was the unit cost for materials included in the beginning work-in-process inventory,rounded to the nearest cent?

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(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

Larner Company uses the weighted-average method in its process costing system.Operating data for the first processing department for the month of June appear below: Units Percentage complet Beginning work in process inventory 24,000 40\% Started into production during June 86,000 Ending work in process inventory 19,000 20\% According to the company's records,the conversion cost in beginning work-in-process inventory was $68,064 at the beginning of June.Additional conversion costs of $585,324 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

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Question 2

Correct Answer:

Verified

B

Job-costing systems tend to produce more accurate product cost information compared to process costing systems.On the other hand they also tend to be more costly systems than processing costing systems. Required: Comment on the two observations.

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Question 3

Correct Answer:

Verified

There is more tracing of costs (such as direct materials and direct labour)to individual jobs in job-order costing systems than in processing costing systems.In process costing systems,costs are not traced to products/jobs; instead they are traced to activities or processes or departments before their allocation to outputs.In essence,all costs are indirect in process costing systems and have to be allocated.Usually,the allocation bases (including overhead allocations in job-order costing systems)are not entirely accurate.They are,in many cases,selected arbitrarily without establishing a cause-and-effect relationship.
Of course,more tracing generally costs more money even in this age of technology.This is the reason why job-order costing systems tend to be more expensive than process costing systems.Hybrid systems that are part-job and part-process are become popular because they offer the benefits of both systems,that is,greater accuracy and cost-efficiency.

Selah Manufacturing makes a quality-improvement device for the aeronautical industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: Number of Units Beginning work in process inventory 16,000 Units started into production during May 100,000 Units completed during May 92,000 Ending work in process inventory 24,000 The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows: Materials Conversion Total Beginning work-in- process inventory \ 54,560 \ 35,560 \ 90,120 Costs incurred during May \ 468,000 \ 574,040 \ 1,042,040 Total \ 522,560 \ 609,600 \ 1,132,160 -What total amount was debited to the Work-in-process inventory during the month of May?

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Question 4

Glo Co.,a manufacturer of combs,uses the weighted-average method in its process costing system.The company sold 125,000 units during the month of April.There is only one processing department.The following additional information is provided: Inventory at April 1: Work in process None Finished goods 37,500 units Inventory at April 30: Work in process (75\% complete as to conversion costs) 8,000 units Finished goods 30,000 units What were the equivalent units of production for conversion costs for April?

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Question 5

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work-in-process inventory consisted of 50,000 units that were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows: Units Conversion costs Work in process inventory on May 1 50,000 \ 30,000 Units started into production 180,000 Conversion costs incurred during May \ 690,000 Units completed and transferred out during the month 190,000 -Assuming that Cherrington Company uses the FIFO method,the conversion costs for work in process ending inventory in May is closest to which of the following? (Round your intermediate answers two decimal places)

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Question 6

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work-in-process inventory consisted of 50,000 units that were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows: Units Conversion costs Work in process inventory on May 1 50,000 \ 30,000 Units started into production 180,000 Conversion costs incurred during May \ 690,000 Units completed and transferred out during the month 190,000 -Assuming that Cherrington Company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for May,rounded to the nearest cent?

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Question 7

Adam Company uses the weighted-average method in its process costing system. The following information for the Assembly Department was obtained from the accounting records for September (all materials are added at the beginning of the process): Number of Units Labour and overhead percentage complete Work in process inventory, Sept. 1 60,000 15\% Transferred in the during the month 105,000 Work in process inventory, Sept. 30 40,000 20\% Transferred In Materials Labour and overhead Beginning work-in- process inventory \ 30,000 \ 16,000 Cost added during the month \ 63,000 \ 320,000 -The "Total cost to be accounted for" section of the production report for the month will show an amount equal to which of the following?

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Question 8

Jawson Company uses the weighted-average method in its process costing system.Operating data for the Painting Department for the month of April appear below: Units Percentage complete Beginning work in process 6,300 10\% inventory Transferred in from the 65,600 prior department during April Ending work in process 4,600 70\% inventory What were the equivalent units of production for conversion costs in the Painting Department for April?

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Question 9

Barker Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department for a recent month: Required: Using the weighted-average method: a)Determine the equivalent units of production for materials and conversion costs. b)Determine the cost per equivalent unit for materials and conversion costs. c)Determine the cost of units transferred out of the department during the month. d)Determine the cost of ending work-in-process inventory in the department.

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Question 10

A manufacturer of blank DVDs would ordinarily use process costing rather than job-order costing.

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Question 11

The activity in Nolan Company's Blending Department for the month of April is given below: Number of Units Labour and overhead percentage complete Work in process inventory, April 1 8,000 50\% Transferred in the during the month 50,000 Work in process inventory, April 30 10,000 70\% All materials are added at the beginning of processing in the Blending Department. -Using the weighted-average method,what are the equivalent units of production for material for the month?

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Question 12

Reid Company uses a process costing system in which units go through several departments. In the Cutting Department for June, units in the beginning work-in-process inventory were 80% complete with respect to conversion costs. Units in the ending work-in-process inventory were 25% complete with respect to conversion costs. Other data for the department for June are as follows: Units Conversion costs Work in process inventory on June 1 15,000 \ 50,200 Units started into production 145,000 Conversion costs incurred during June \ 175,700 Units completed and transferred to the next department during June 130,000 -Assuming that the company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for June,rounded to the nearest cent?

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Question 13

The following information was obtained from the records of the first processing department of Keith Manufacturing Company for the month of February. The company uses the FIFO method in its process costing system. Number of Units Labour and overhead percentage complete Work in process inventory, February 1 15,000 30\% Started in assembly during the month 60,000 Work in process inventory, February 28 20,000 20\% All materials are added at the beginning of the manufacturing process. - What are the equivalent units of production for material for the month?

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Question 14

Production and cost data for the month of February for Process A of the Packer Manufacturing Company were as follows: Productim record: Units in process, February l (100\% complete with respect to materials; 25\% complete with respect to conversion cost) 2,000 New units started in process 8,000 Units completed 7,000 Units in process, February 28(100\% complete with respect to materials; 1/3 3,000 complete with respect to conversion cost) Cast recard: Wark in process inventory, February 1: \ 600 Materials 100 700 Conversion Costs for February: Materials issued 2,560 Conversion 1,500 Total cost to be accounted for \4 ,760 The company uses the FIFO cost method in its process costing system. Required: a)Calculate the equivalent units and unit costs for February for materials and conversion costs. b)Determine the cost transferred to finished goods. c)Determine the amount of cost that should be assigned to the ending work-in-process and finished goods inventories.

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Question 15

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: Units Beginning work in process inventory 16,000 Started into production during May 100,000 Completed during May 92,000 Ending work in process inventory 24,000 The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows: Materials Conversion Beginning work-in-process inventory \ 54,560 \ 35,560 Costs incurred during May \ 468,000 \ 574,040 -Using the weighted-average method,the cost per equivalent unit of materials for May is closest to which of the following?

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Question 16

(Appendix 6A)If a company uses two different unit cost figures to cost transfers from one department to another under a process costing system,then which of the following statements is reasonable to assume?

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Question 17

Winkle Company uses the FIFO method in its process costing system.At the beginning of March,the work-in-process inventory in the Blending Processing Center consisted of 5,000 units,90% complete with respect to conversion costs.At the end of the month,the work-in-process inventory consisted of 2,000 units that were 60% complete with respect to conversion costs.If 10,000 units were transferred to the next processing center during the month,what would be the equivalent units of production for conversion costs?

(Multiple Choice)

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Question 18

Herston Company uses the FIFO method in its process costing system.The beginning work-in-process inventory in a particular department consisted of 6,000 units,two-thirds complete with respect to conversion costs.During the month,42,000 units were started and 40,000 units were completed and transferred out of the department.The company had 40,000 equivalent units of production for conversion costs.Which of the following represents the ending work-in-process inventory in the department? (Do not round intermediate calculations.)

(Multiple Choice)

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Question 19

Information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company follow: Number of Units Conversion costs percentage complete Beginning work in process inventory 11,000 35\% Units started into production 120,000 Units completed and transferred out 114,000 30\% Ending work in process inventory 17,000 The beginning work-in-process inventory included $11,000 of conversion cost. During the month, the Refining Department incurred an additional $290,000 in conversion costs. - Assuming that the company uses the FIFO method,what is the cost per equivalent unit for conversion costs for the month in the refining Department,rounded to the nearest cent?

(Multiple Choice)

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Question 20

Job-costing systems tend to produce more accurate product cost information compared to process costing systems.On the other hand they also tend to be more costly systems than processing costing systems. Required: Comment on the two observations.

A manufacturer of blank DVDs would ordinarily use process costing rather than job-order costing.

(Appendix 6A)If a company uses two different unit cost figures to cost transfers from one department to another under a process costing system,then which of the following statements is reasonable to assume?

Managerial Accounting and the Business Environment

Cost Terms,concepts,and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Activity-Based Costing: A Tool to Aid Decision Making

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

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