Exam 17: Process Costing

Partially completed units in ending work in process are 100 percent complete with regard to their direct materials costs if the direct materials are introduced at the beginning of the process.

Bright Colors Company placed 315,000 gallons of direct materials into the mixing process.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Bright Colors uses weighted-average costing.The initial forecast for the end of the month was to have 75,000 gallons still in process,15% converted as to labor and factory overhead. Required: a.Determine the total equivalent units (in process and transferred out)for direct materials and for conversion costs,assuming there was no beginning inventory. b.With the installation of a new paint processing filtration device,the forecast for the end of the month was to have 50,000 gallons still in process,70% converted as to labor and factory overhead.In this event,determine the equivalent units (in process and transferred out)for direct materials and for conversion costs,assuming there was no beginning inventory.

The weighted average method of process costing assigns the cost of equivalent units worked on during the current period first to complete beginning inventory,next to start and complete new units,and finally to units in ending work-in-process inventory.

List and describe the five steps in process costing.

Under standard costing the cost per equivalent-unit calculation is more difficult than in either weighted average or FIFO.

Emerging Dock Company manufactures boat docks on an assembly line.Its standard costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department and the Finishing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production. Data for the Assembly Depatment for Maj $20 X 5$ are: Work in process, beginning inventory: $\quad\quad\quad\quad70 \text { uncits }$ Direct materials ( $100 \%$ complete) Conversion costs ( $25 \%$ complete) $\text { Units started during May } \quad \quad \quad \quad 40 \text { units }$ $\text { Work in process, ending inventory: } \quad 10 \text { units }$ Direct materials (100\% complete) Conversion costs ( $50 \%$ complete) $\text { Costs for May: }$ Standard costs for Assembly: Direct materials \ 8,000 per unit Conversion costs \ 32,000 per unit Work in process, beginuing inventory: Direct materials \ 280,000 Conversion costs \ 520,000 What is the balance in ending work-in-process inventory?

The Esther Valve Corporation was recently formed to produce a brass valve that forms an essential part of a compressor manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.September is Parson's first month of operations,and therefore,there was no beginning inventory.Direct materials cost for the month totaled $2,800,000,while conversion costs equaled $3,600,000.Accounting records indicate that 1,600,000 valves were started in September and 1,400,000 valves were completed. Ending inventory was 20% complete as to conversion costs. Required: a.What is the total manufacturing cost per valve for September? b.Allocate the total costs between the completed valves and the valves in ending inventory.

Answer the following questions using the information below: Morgan Clay Products manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Molding Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for August 2015 are: Work in process, beginuning inventory: 1,200 units Direct materials ( 100 \% complete) Conversion costs ( 40\% complete) Units started during August 675 units Work in process, ending inventory: 450 units Direct materials ( 100\% complete) Conversion costs ( 60\% complete) Costs for August: Standard costs for Asæmbly: Direct materials \ 15 per unit Conversion costs \ 27.50 per unit Work in process, beginning inventory: Direct materials \1 1,000 Conversion costs \8 ,250 -What is the balance in ending work-in-process inventory?

A hybrid-costing system is a variant of process-costing that allows it to incorporate benefits of standard costing and activity-based costing.

In a process-costing system,there is always a separate Work-in-Process account for each different process.

Under the weighted-average method,the stage of completion of beginning work in process ________.

Costing systems that are used for the costing of like or similar units of products in mass production are called ________.

The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services.

The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

Answer the following questions using the information below: Emerging Dock Company manufactures boat docks on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Data for the Assembly Depatment for May $20 X 5$ are: Work in process, beginuning inventory: $\quad\quad\quad70 \text { units }$ Direct materials (100\% complete) Conversion costs ( $25 \%$ complete) $\text { Units started during May }$$\quad\quad\quad40 \text { units }$ Work in process, ending inventory: $\quad\quad\quad40 \text { units }$ Direct materials ( $100 \%$ complete) Conversion costs ( $50 \%$ complete) Costs for May: Standard costs for Assembly: Direct materials $\quad\quad\quad\quad\quad\quad\quad\$ 8,000 \text { per unit }$ Conversion costs $\quad\quad\quad\quad\quad\quad\quad\$ 32,000 \text { per unit }$ Work in process, beginning inventory: $\quad\quad\quad \$280,000$ Direct materials Conversion costs $\quad\quad\quad\quad \$520,000$ -Which of the following journal entries records the Assembly Department's conversion costs at actual costs for the month,assuming conversion costs are 20% higher than expected?

Answer the following questions using the information below: Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing. The following information is available for the month of March 2015 for the Assembly department. Work in process, beginning inventory 300 units Conversion costs ( 30\% complete) Units started during April 800 units Work in process, ending inventory: 100 units Conversion costs ( 50\% complete) The cost details for the month of March are as follows: Work in process, beginuing inventory: Direct materials \ 345,000 Conversion costs \ 360,000 Direct materials costs added during April \ 700,000 Conversion costs added during April \ 1,120,000 -What amount of conversion costs is assigned to the ending Work-in-Process account for April?

Answer the following questions using the information below: Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. Data for the Assembly Depatment for June 2015 are: Work in process, beginuning inventory 300 units Direct materials ( 100\% complete) Conversion costs ( 50\% complete) Units started during June 950 units Work in process, ending inventory: 150 units Direct materials ( 100\% complete) Conversion costs ( 75\% complete) Costs for June 2015: Work in process, beginuning inventory: Direct materials \ 90,000 Conversion costs \ 135,000 Direct materials costs added during June \ 600,000 Conversion costs ad ded during June \ 400,000 -What is the direct materials cost per equivalent unit during June?

In a process-costing system,the calculation of equivalent units is used for calculating ________.

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

How many units were completed and transferred out of the Finishing Department during March?