Exam 3: Process Cost Systems

The cost of production report reports the cost of the goods sold.

The following production data were taken from the records of the finishing department for June: Inventory in process, June 1, 25% completed 1,500 units Transferred to finished goods during June 5,000 units Equivalent units of production during June 5,200 units Determine the number of equivalent units of production in the June 30, finishing department inventory, assuming that the first-in, first-out method is used to cost inventories.The completion percentage of 25% applies to both direct materials and conversion costs.

The journal entry to record the flow of costs into Department 1 for direct labor is

Match each phrase that follows with the term a-h it describes. -measure of the work done during a production period, expressed in terms of fully complete units of output

What are the equivalent units of production used to compute unit conversion cost on the cost of production report for Department W? Assume the company uses FIFO.

Equivalent units should be computed separately for direct materials and conversion costs.

The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was

Just-in-time processing is a business philosophy that focuses on reducing time and cost and eliminating poor quality.This is accomplished in manufacturing and nonmanufacturing processes by

Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the equivalent units for materials and conversion costs, respectively?

Austin Co.manufactures a product called Aster in a three-process series.All materials are introduced at the beginning of the first process.Austin uses the first-in, first-out method of inventory costing.Unit and cost data for the first process Department A for the month of December follow: Prepare Austin's Department A cost of production report for December.

The Mountain Springs Water Company has two departments, Purifying and Bottling.The Bottling Department had 3,000 liters in beginning work in process inventory 30% complete.During the period 71,000 liters were completed.The ending work in process was 5,000 liters 70% completed.What are the total equivalent units for direct materials using the FIFO method if materials were added at the beginning of the process?

Mocha Company manufactures a single product by a continuous process, involving three production departments.The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000, respectively.The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively.In addition, work in process at the beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000.The journal entry to record the flow of costs into Department 3 during the period for direct materials is

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

Mocha Company manufactures a single product by a continuous process, involving three production departments.The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively.The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively.Department 2 has transferred-in costs of $390,000 for the current period.In addition, work in process at the beginning of the period for Department 2 totaled $75,000, and work in process at the end of the period totaled $90,000.The journal entry to record the flow of costs into Department 3 during the period is

Which of the following is not a use of the cost of production report?

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

The Brass Works is in the process of determining manufacturing overhead.Journalize events a - d to Factory Overhead, Administrative Expenses, Selling expenses, or allocated between the three as appropriate.All items were paid in cash at the time of acquisition.Next calculate the overhead application rate and apply overhead to Work in Process. a Brass Works purchases an insurance policy for $4,000.It is computed that 80% of the value of the policy protects production, the balance protects the administrative offices.Brass Works charges insurance initially to expense. b The electric bill is received showing an amount due of $1,200.This meter is utilized only by production as the office spaces have their own meter. c Payroll reports that the sales manager's salary for the period is $3,500 and that production Supervisor's wages for the period are $5,500. d The stockroom reports that $2,575 in materials were purchased for the production Maintenance Department. e If the driver for the application of overhead is drop-forge strokes and there are expected to be 1,000 strokes in this period, what is the rate per stroke? Do not round your answer. f Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead to Work in Process.Round your answers to nearest dollar. Round overhead rate to four decimal places and total cost to nearest dollar.

Match each phrase that follows with the term a-h it describes. -conversion costs

In a process cost system, the amount of work in process inventory is valued by

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of