Exam 3: Process Costing and Analysis

If Department Q uses $60,000 of direct materials and Department T uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

In process costing, indirect materials are charged directly to Goods in Process Inventory.

In a process manufacturing system, products pass through a series of sequential processes.

The process cost summary presents calculations of the cost of units completed during the reporting period but does not present any information about the ending goods in process inventory.

To determine unit cost under a process cost accounting system, equivalent units produced must be calculated if the company has goods in process inventories.

Tanner, Inc.uses a process cost accounting system with weighted-average valuation method.The following operating and cost data occurred during October: Materials are added at the beginning of the process.Direct labor and overhead are incurred evenly throughout the process.Prepare the October process cost summary.

Equivalent units of production are equal to:

Iolaus Company provides the following data for the current year: Required: (a)Calculate the predetermined overhead allocation rate based on direct labor. (b)Determine the amount of overhead applied to production. (c)Prepare the journal entry to apply factory overhead to goods in process.

In a process cost accounting system, a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Nano Company uses a process cost system and the weighted-average inventory valuation method.The Nano Assembly Department's beginning inventory consisted of 40,000 units that were three-fifths complete with respect to direct labor and overhead.The department started and finished 149,000 units with respect to direct labor and overhead.The ending inventory consists of 60,000 units that are three-fourths complete with respect to direct labor and overhead.All direct materials are added at the beginning of the process.The department Goods in Process account included direct labor costs of $292,500 and overhead costs of $140,400. (a)What is the direct labor cost per equivalent unit? (b)What is the overhead cost per equivalent unit?

Equivalent units of production are always the same as the total number of physical units finished during the period.

The following journal entry would be made to record the use of direct labor in the reporting period covered by the information:

If the factory labor cost for a month was $123,000 (paid in cash), the following journal entry would be recorded by the process cost accounting system:

The number of equivalent units of production assigned to ending goods in process inventory should usually be equal to or less than the number of physical units in ending goods in process inventory.

The following journal entry would be made to record the use of direct labor in the reporting period covered by the information:

A company uses a process cost accounting system.The following information is available regarding direct labor for the current year: (a)Calculate the equivalent units of production for direct labor for the year using weighted average. (b)Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

Refer to the following incomplete table of cost information: -What was the cost of the goods transferred out of the Bagging Department and into the finished goods inventory?

A process cost summary is an accounting report that describes the costs charged to a department, the equivalent units of production by the department, and how the costs were assigned to the output.

If the predetermined overhead allocation rates were based on direct labor costs, the rates for the Pushing and Shoving Departments were 50% and 150%, respectively.

Prepare the required general journal entries to record the following transactions for the Bell Company. (a.)Purchased $40,000 of raw materials on account. (b.)Used $12,000 of direct materials in the Mixing Department, and $17,000 of direct materials in the Assembly Department. (c.)Used $5,000 of indirect materials.