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. $\begin{array}{ll}\text { Data for the Assembly Depatment for June } 2015 \text { are: }\\ \text { Work in process, beginuning inventory }&300 \text { units }\\ \text { Direct materials ( } 100 \% \text { complete) }\\ \text { Conversion costs ( } 50 \% \text { complete) }\\ \text { Units started during June } & 950 \text { units } \\ \text { Work in process, ending inventory: } & 150 \text { units } \\ \text { Direct materials ( } 100 \% \text { complete) } & \\ \text { Conversion costs ( } 75 \% \text { complete) } &\\\\\text { Costs for June 2015: }\\ \text { Work in process, beginuning inventory: }\\ \text { Direct materials } & \$ 90,000 \\ \text { Conversion costs } & \$ 135,000 \\ \text { Direct materials costs added during June } & \$ 600,000 \\ \text { Conversion costs ad ded during June } & \$ 400,000 \end{array}$ -What is the conversion cost per equivalent unit in June?

A) $552.00 B) $541.24 C) $441.24 D) $428.00 A) $552.00 B) $541.24 C) $441.24 D) $428.00

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. $\begin{array} { l } \text {Data for the Assembly Department for August 2015 are: }\\ \text {Work in process, beginuning inventory: }&1,200 \text { units } \\ \text {Direct materials ( \( 100 \% $ complete) }\\ \text {Conversion costs ( $ 40 \% $ complete) }\\\\ \text {Units started during August }&675 \text { units } \\\\ \text {Work in process, ending inventory: }&450 \text { units } \\ \text {Direct materials ( $ 100 \% $ complete) }\\ \text {Conversion costs ( $ 60 \% $ complete) }\\\\ \text {Costs for August: } \\ \text {Standard costs for Asæmbly: } \\ \text {Direct materials }& \$ 15 \text { per unit }\\ \text { Conversion costs }&\$ 27.50 \text { per unit } \\\\ \text {Work in process, beginning inventory:} \\ \text {Direct materials }&\$11,000 \\ \text { Conversion costs}&\$8,250 \\ \end{array}\) -Which of the following journal entries records the Molding Department's conversion costs for the month,assuming conversion costs are 10% higher than expected?

A) $\begin{array} { l } \text {Molding Department Conversion Cost Control } &3,341.25\\ \text {Various accounts } &3,341.25\\ \end{array}$ B) $\begin{array} { l } \text { Materials Inventory} &33,412.50\\ \text { Molding Department Conversion Cost Control} &33,412.50\\ \end{array}$ C) $\begin{array} { l } \text {Molding Department Conversion Cost Control } &36,753.75\\ \text {Various accounts } &36,753.75\\ \end{array}$ D) $\begin{array} { l } \text {Materials Inventory }&36,753.75 \\\text {Work in Process - Molding }&36,753.75 \\ \end{array}$ A) $\begin{array} { l } \text {Molding Department Conversion Cost Control } &3,341.25\\ \text {Various accounts } &3,341.25\\ \end{array}$ B) $\begin{array} { l } \text { Materials Inventory} &33,412.50\\ \text { Molding Department Conversion Cost Control} &33,412.50\\ \end{array}$ C) $\begin{array} { l } \text {Molding Department Conversion Cost Control } &36,753.75\\ \text {Various accounts } &36,753.75\\ \end{array}$ D) $\begin{array} { l } \text {Materials Inventory }&36,753.75 \\\text {Work in Process - Molding }&36,753.75 \\ \end{array}$

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. $\begin{array}{ll}\text { Data for the Assembly Depatment for June } 2015 \text { are: }\\ \text { Work in process, beginuning inventory }&300 \text { units }\\ \text { Direct materials ( } 100 \% \text { complete) }\\ \text { Conversion costs ( } 50 \% \text { complete) }\\ \text { Units started during June } & 950 \text { units } \\ \text { Work in process, ending inventory: } & 150 \text { units } \\ \text { Direct materials ( } 100 \% \text { complete) } & \\ \text { Conversion costs ( } 75 \% \text { complete) } &\\\\\text { Costs for June 2015: }\\ \text { Work in process, beginuning inventory: }\\ \text { Direct materials } & \$ 90,000 \\ \text { Conversion costs } & \$ 135,000 \\ \text { Direct materials costs added during June } & \$ 600,000 \\ \text { Conversion costs ad ded during June } & \$ 400,000 \end{array}$ -What is the total amount debited to the Work-in-Process account during the month of June?

A) $225,000 B) $1,000,000 C) $1,135,000 D) $1,225,000 A) $225,000 B) $1,000,000 C) $1,135,000 D) $1,225,000

Weighty Steel processes a single type of steel.For the current period the following information is given: \[\begin{array} { | l | l | l | l | } \hline & \text { Units } & \text { Material Costs } & \text { Conversion Costs } \\ \hline \text { Beginning Inventory } & 3,000 & \$ 4,500 & \$ 5,400 \\ \hline \text { Started During the Current Period } & 20,000 & 32,000 & 78,200 \\ \hline \text { Ending Inventory } & 2,500 & & \\ \hline \end{array}\] All materials are added at the beginning of the production process.The beginning inventory was 40% complete as to conversion,while the ending inventory was 30% completed for conversion purposes. Weighty uses the weighted-average costing method. What is the total cost assigned to the units completed and transferred this period?

A) $107,010 B) $109,440 C) $113,160 D) $120,100 A) $107,010 B) $109,440 C) $113,160 D) $120,100

Exam 17: Process Costing

A production cost worksheet is used to summarize total costs to account for,compute cost per equivalent unit,and assign total costs to units completed and to units in ending work-in-process.

(True/False)

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Question 101

Weighted-average cost per equivalent unit is obtained by dividing the sum of costs for beginning work in process plus costs for work done in the current period by total equivalent units of work done to date.

(True/False)

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Question 102

Transferred-in costs are costs incurred in previous departments that are carried forward as the product's cost when it moves to a subsequent process in the production cycle.

(True/False)

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Question 103

Which of the following is true of weighted-average process-costing?

(Multiple Choice)

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Question 104

A major advantage of using the FIFO process-costing method is that ________.

(Multiple Choice)

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Question 105

Transferred-in costs are always 100 percent complete at the beginning of the process in the new department.

(True/False)

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Question 106

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 conversion cost per equivalent unit in June?

(Multiple Choice)

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Question 107

In calculating cost per equivalent unit,the FIFO method of process costing merges the work and the costs of the beginning inventory with the work and the costs done during the current period.

(True/False)

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Question 108

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 -Which of the following journal entries records the Molding Department's conversion costs for the month,assuming conversion costs are 10% higher than expected?

(Multiple Choice)

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Question 109

Job-costing systems separate costs into cost categories according to when costs are introduced into the process of manufacture.

(True/False)

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Question 110

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

(True/False)

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Question 111

The first-in,first-out process-costing method assumes that the earliest equivalent units in work in process are completed first.

(True/False)

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Question 112

Otylia Manufacturing Company assembles its product in several departments.It has two departments that process all units.During February,the beginning work in process in the cutting department was half completed as to conversion,and complete as to direct materials.The beginning inventory included $12,000 for materials and $3,000 for conversion costs.Ending work-in-process inventory in the cutting department was 40% complete.Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 75% complete as to conversion.Beginning inventories included $16,000 for transferred-in costs and $20,000 for conversion costs.Ending inventory was 25% complete.Additional information about the two departments follows: Cutting Finishing Beginning work-in-process units 20,000 20,000 Units started this period 40,000 50,000 Units transferred this period 50,000 Ending work-in-process units 10,000 20,000 Material costs added \ 42,000 \ 28,000 Direct manufacturing labor \ 18,700 \ 40,000 Other conversioncosts \ 21,500 \ 24,000 Required: Prepare a production cost worksheet using weighted-average for the cutting department.

(Essay)

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Question 113

From an accounting standpoint,favorable cost variances are debit entries,while unfavorable ones are credits.

(True/False)

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Question 114

An operation-costing system is a hybrid-costing system applied to batches of similar,but NOT identical,products.

(True/False)

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Question 115

Process costing should be used to assign costs to products when ________.

(Multiple Choice)

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Question 116

Process-costing systems using standard costs record standard direct material costs in Direct Materials Control and standard conversion costs in Conversion Costs Control.

(True/False)

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Question 117

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 total amount debited to the Work-in-Process account during the month of June?

(Multiple Choice)

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Question 118

Answer the following questions using the information below: Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 500 kgs of tungsten carbide at $60 per kg. It started manufacture of 4,000 vases and completed and transferred 3,200 vases during the month. It has 800 vases in the process at the end of the month. It incurred direct labor charges of $1,000 and other manufacturing costs of $500, which included electricity costs of $200. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50% complete in respect of conversion costs. -What is the total conversion costs for the month of July?

(Multiple Choice)

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Question 119

Weighty Steel processes a single type of steel.For the current period the following information is given: Units Material Costs Conversion Costs Beginning Inventory 3,000 \ 4,500 \ 5,400 Started During the Current Period 20,000 32,000 78,200 Ending Inventory 2,500 All materials are added at the beginning of the production process.The beginning inventory was 40% complete as to conversion,while the ending inventory was 30% completed for conversion purposes. Weighty uses the weighted-average costing method. What is the total cost assigned to the units completed and transferred this period?

(Multiple Choice)

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Question 120

A production cost worksheet is used to summarize total costs to account for,compute cost per equivalent unit,and assign total costs to units completed and to units in ending work-in-process.

Weighted-average cost per equivalent unit is obtained by dividing the sum of costs for beginning work in process plus costs for work done in the current period by total equivalent units of work done to date.

Transferred-in costs are costs incurred in previous departments that are carried forward as the product's cost when it moves to a subsequent process in the production cycle.

Which of the following is true of weighted-average process-costing?

A major advantage of using the FIFO process-costing method is that ________.

Transferred-in costs are always 100 percent complete at the beginning of the process in the new department.

In calculating cost per equivalent unit,the FIFO method of process costing merges the work and the costs of the beginning inventory with the work and the costs done during the current period.

Job-costing systems separate costs into cost categories according to when costs are introduced into the process of manufacture.

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

The first-in,first-out process-costing method assumes that the earliest equivalent units in work in process are completed first.

From an accounting standpoint,favorable cost variances are debit entries,while unfavorable ones are credits.

An operation-costing system is a hybrid-costing system applied to batches of similar,but NOT identical,products.

Process costing should be used to assign costs to products when ________.

Process-costing systems using standard costs record standard direct material costs in Direct Materials Control and standard conversion costs in Conversion Costs Control.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

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