Exam 17: Process Costing

Answer the following questions using the information below: Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Comfort. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs. Beginning inventory: Direct materials \ 24,000 Conversion costs \ 35,000 Manufacturing costs added auring the œcounting period: Direct materials $\quad \$ 168,000$ Conversion costs $\quad \$ 278,000$ -How many of the units that were started and completed during February?

Answer the following questions using the information below: The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel. -How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the production cycle.

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 amount of direct materials costs is assigned to the ending Work-in-Process account for June?

Managers find operation costing useful in cost management because it ________.

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. -The journal entry to record direct labor for July is ________.

Answer the following questions using the information below: Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. The company ended the month with 1,500 models in ending inventory. There were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Direct materials costs $\quad \$ 19,200$ Conversion costs $\quad \quad \$ 10,800$ Manufacturing costs added auring the œcounting period: Direct materials costs $\quad \$ 70,000$ Conversion costs $\quad \quad \$ 240,000$ -What were the equivalent units for conversion costs during October?

Answer the following questions using the information below: The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel. -Of the 145,000 units Swivel started during February,how many were finished during the month?

Vital Industries manufactured 1,200 units of its product Huge in the month of April.It incurred a total cost of $120,000 during the month.Out of this $120,000,$45,000 comprised of direct materials used in the product and the rest was incurred because of the conversion cost involved in the process.Ryan had no opening or closing inventory.What will be the total cost per unit of the product,assuming conversion costs contained $10,000 of indirect labor?

Answer the following questions using the information below: The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel. -What were the equivalent units for conversion costs for February if the beginning inventory was 70% complete as to conversion costs and the ending inventory was 40% complete as to conversion costs?

If manufacturing labor costs are added to the process at a different time compared to other conversion costs,an additional cost category-direct manufacturing labor costs-would be needed to assign these costs to products.

On occasion,the FIFO and the weighted-average methods of process costing will result in the same dollar amount of costs being transferred to the next department.Which of the following scenarios would have that result?

Answer the following questions using the information below: Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. The company ended the month with 1,500 models in ending inventory. There were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Direct materials costs $\quad \$ 19,200$ Conversion costs $\quad \quad \$ 10,800$ Manufacturing costs added auring the œcounting period: Direct materials costs $\quad \$ 70,000$ Conversion costs $\quad \quad \$ 240,000$ -How many of the units that were started and completed during October?

The weighted-average process-costing method calculates the equivalent units by ________.

A distinct feature of the FIFO process-costing method is that the ________.

Standard costing is NOT possible in a firm that uses process costing.

Marv and Vicki own and operate a vegetable canning plant.In recent years,their business has grown tremendously and,at any point in time,they may have 30 to 35 different vegetables being processed.Also,during the peak summer months there are several thousand bushels of vegetables in some stage of processing at any one time.With the company's growth during the past few years,the owners decided to employ an accountant to provide cost estimations on each vegetable category and prepare monthly financial statements.Although the accountant is doing exactly as instructed,Marv and Vicki are confused about the monthly operating costs.Although they process an average of 50,000 canned units a month,the monthly production report fluctuates wildly. Required: Explain how the production report can fluctuate wildly if they process a constant amount of vegetables each month.

FIFO Aluminum processes a single type of aluminum.During the current period the following information was given: Units Material Costs Conversion Costs Beginning Inventory 3,000 \ 4,500 \ 4,800 Started During the Current Period 20,000 48,000 65,000 Ending Inventory 2,500 All materials are added at the beginning of the production process.The beginning inventory was 30% complete as to conversion,while the ending inventory was 40% completed for conversion purposes. FIFO Aluminum uses the first-in,first-out system of process costing. What were the costs assigned to the units transferred out this period (round equivalent unit cost to the nearest penny)?

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

Audrey Auto Accessories manufactures plastic moldings for car seats.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. Datafor Department A for Februay 2015 are: Work in process, beginning inventory, 40\% converted 200 units Units started during February 800 units Work in process, ending inventory: 100 units 30\% complete as to conversion costs 100\% complete as to materials Costs for the Department A for February 2015 are: Work in process, beginuing inventory: Direct materials \ 600,000 Conversion costs \ 150,000 Direct materials costs added during February \ 4,000,000 Conversion costs added during February \ 2,250,000 What were the equivalent units of direct materials and conversion costs,respectively,at the end of February? Assume Audrey uses the weighted-average process costing method.

Job-costing and process-costing are mutually exclusive,hence a hybrid costing system that combines elements of both job and process costing cannot be used.