Exam 6: Systems Design: Process Costing

Which of the following is true about process costing?

There is only one method of accounting treatment for normal losses.

In process costing,the same equivalent units figure is used for both materials and conversion costs.

A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is applied. There was no beginning work-in-process inventory in the Forming Department in May. The Forming Department began manufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming Department for the month of May were as follows: Direct materials \ 33,000 Conversion costs \ 17,000 A total of 8,000 bats were completed and transferred to the Finishing Department during May. The ending work-in-process inventory was 100% complete with respect to direct materials and 25% complete with respect to conversion costs. The company uses the weighted-average method of process costing. -What was the cost of the units transferred to the Finishing Department during May?

The information below was obtained from the records of the first processing department of Christine Corporation for the month of July. The company uses the weighted-average method in its process costing system. Number of Units Labour and overhead percentage complete Work in process inventory, July 1 20,000 40\% Started during the month 70,000 Completed during the month 80,000 Work in process inventory, July 31 ? 25\% All materials are added at the beginning of the manufacturing process. -What are the equivalent units of production for material for the month?

Under the FIFO process costing method,the equivalent units of production in the production report relate to work done only during the current period.

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,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)

The Smith Company manufactures a product that goes through two departments prior to completion.The following information is available on work in one of these departments,the Forming Department,during March: Cost in the beginning work-in-process inventory and cost added during the month were as follows: Materials Conversion Work in process, March 1 \ 42,190 \ 38,000 Cost added during March \ 440,810 \ 394,000 The Forming Department is the first department in the production process; after forming has been completed,the units are transferred to the Finishing Department. Required: a)Assuming the company uses the weighted-average method,calculate the equivalent units and unit cost for materials and conversion costs,rounded to the nearest tenth of a cent. b)(Appendix 6A)Assuming the company uses the FIFO method,calculate the equivalent units and unit cost for materials and conversion costs,rounded to the nearest tenth of a cent.

Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work-in-process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labour and overhead. The cost per equivalent unit was $2.50 for materials and $6.25 for labour and overhead. -What was the total cost of the October 31 work-in-process inventory?

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 FIFO method,the cost per equivalent unit of conversion cost for May is closest to which of the following?

Sharp Company has a process costing system.The following data relate to the company's Mixing Department for a recent month: Units Conversion percentage complete Beginning work in process inventory 5,000 60\% Units started into production 40,000 Units completed and transferred 37,000 Ending work in process inventory 8,000 25\% All materials are added at the beginning of the mixing process. Required: a)(Appendix 6A)Compute the equivalent units of production for materials using the FIFO method. b)(Appendix 6A)Compute the equivalent units of production for conversion using the FIFO method. c)Compute the equivalent units of production for materials using the weighted-average method. d)Compute the equivalent units of production for conversion using the weighted-average method.