Exam 18: Costing Systems- Process Costing

The FIFO approach to process costing assumes that items in beginning inventory were started and completed in the current period.

The number of possible combinations of product flows and production processes is limitless.

The Finishing Department of Garr Company has the following information available for 20xx: Units complete Beginging work in process inventory 5,000 40 percent Ending work in process inventory 2,500 80 percent Units completed during 20xx 32,000 100 percent Assuming that Garr Company uses the FIFO process costing method,what are the equivalent units for conversion costs for 20xx?

A measure of productive output of units for a period of time,expressed in terms of completed whole units,is the definition of

Only one Work in Process Inventory account is used with the process costing system.

Equivalent production is also called

The following unit data were assembled for the heating process of Morgan Processing,Inc.,for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. Units Beginning work in process inventory (30 percent complete) 5,000 Units started in August 44,000 Ending work in process (60 percent complete) 4,500 The number of equivalent units produced with respect to conversion costs is

In a process costing system,some of the increases to Department B's Work in Process Inventory account would come from Department A's

Use the following data from a company using a process costing system to answer the question below. Beginning Work in Process Inventory on June 1 : 1,000 units - 100 percent complete as to direct materials 80 percent complete as to conversion costs Units Started During June: 6,400units Ending Work in Process Inventory on June 30: 1,200 units - 100 percent complete as to direct materials 40 percent complete as to conversion costs The company uses average process costing method. Equivalent units for conversion costs during the month totaled

A process costing system accounts for product costs

Equivalent units are defined as the number of units completed and transferred out of work in process inventory during the current period.

During March,Department A started 300,000 units of product in a particular production process.The beginning work in process inventory was 50,000 units,and the ending inventory was 40,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 40 percent complete with respect to conversion costs.Department A uses the FIFO costing method. Units transferred out during March were

Fantastic Fabricating uses the FIFO method in its process costing system.Beginning inventory in the mixing processing center consisted of 4,000 units,75 percent complete with respect to conversion costs.Ending work in process inventory consisted of 3,000 units,60 percent complete with respect to conversion costs.If 11,200 units were transferred to the next processing center during the period,the equivalent units for conversion costs would be

Blackwell Corporation uses a process costing system and has just completed production for the month of December 20xx.The following production data were obtained from the accounting records: a. Units in beginning inventory totaled 9,000 and were 80 percent complete as of December 1 (all direct materials were added to these products in the preceding month). b. During the period, 216,000 units were started. c. 17,400 units were partially completed as of December 31, 20xx. d. Ending work in process inventory was 100 percent complete with respect to direct materials and 70 percent complete with respect to conversion costs at month end. Using the information provided, compute the equivalent units of production for direct materials and conversion costs for the month ended December 31, 20xx, assuming a FIFO costing flow.

Nader,Inc.,has the following information available: Costs from Costs from Beginning Current Period Inventory Direct materials \ 2,300 \ 21,252 Conversion costs 6,200 150,536 At the beginning of the period,there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,4,300 units were started and completed.Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO costing method.) The total costs that will be transferred into the Finished Goods Inventory account during the current period are

Surf's Up manufactures surfboards.Production has just been completed for May 20xx.The beginning balances in Work in Process Inventory were direct materials costs,$31,400,and conversion costs,$16,400.Cost of direct materials used in March was $394,800,and March's conversion costs were $598,400.A schedule of equivalent production for March has already been prepared.It shows a total of 9,400 equivalent units as to direct materials and 8,800 equivalent units as to conversion costs. From this information,compute the cost per equivalent unit for May.Use the FIFO costing method.

The equivalent units of production must be computed before the value of ending inventory can be determined in a process costing system.

The use of the FIFO method would result in a company's process cost report showing

In a process costing system,the cost of ending work in process inventory for a period can be verified by reference to supporting analysis in