Exam 17: Process Costing

Jane Industries manufactures plastic toys.During October,Jane's Fabrication Department started work on 10,000 models.During the month,the company completed 11,300 models,and transferred them to the Distribution Department.The company ended the month with 2000 models in ending inventory.There were 3300 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 30% complete as to conversion costs,while ending work in process was 55% complete as to conversion costs. Beginning inventory: Manufacturing costs added during the accounting period: What were the equivalent units for conversion costs during October?

List and describe the five steps in process costing.

Which of the following is the costing system used for mass produced like or similar units of products?

In a period of rising prices,the weighted-average method will result in higher tax payments.

Which of the following statements best describes conversion costs?

When there are multiple support departments within an organization,it is common to use journal entries to transfer-in costs from one department to another.What are some of the points to remember about these costs?

Pet Products Company uses an automated process to manufacture its pet replica products.For June,the company had the following activities: Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process. Required: Prepare a production cost worksheet using the FIFO method.

Assembly department of Zahra Technologies had 100 units as work in process at the beginning of the month.These units were 45% complete.It has 200 units which are 20% complete at the end of the month.During the month,it completed and transferred 500 units.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production.Zahra uses weighted-average process-costing method.What is the total equivalent units in ending inventory for assignment of direct materials cost?

Which of the following statements is true?

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 183,000 chairs and transferred them to the Finishing Department.The firm ended the month with 24,000 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?

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 2017 are: Costs for August: What is the balance in ending work-in-process inventory?

High Universal Industries operates a division in Brazil,a country with very high inflation rates.Traditionally,the company has used the same costing techniques in all countries to facilitate reporting to corporate headquarters.However,the financial accounting reports from Brazil never seem to match the actual unit results of the division.Management has studied the problem and it appears that beginning inventories may be the cause of the unmatched information.The reason for this is that the inventories have a different financial base because of the severe inflation. Required: How can process costing assist in addressing the problem facing Universal Industries?

Activity -based costing plays a more significant role in job costing as compared to process costing as companies using process costing have homogeneous products.

A golf shoe manufacturer makes and sells thousands of golf shoes each year through two channels: wholesale to sporting good stores and direct to consumers through it's custom portal.Customers can specify modifications to 6 basic golf shoe models including spiked or spikeless,traditional or casual,even laced or other closures.From there,customers can specify many details to their preferred model such as size and width (different for each foot),favorite colors for the base,saddle,accents and laces.A customer can choose to embroidered a name or initials or include the logo of their favorite MLB,NFL,NHL or NCAA team.Which of the following costing systems would make the most sense for the custom golf shoe operation and the main product operation (not customized/wholesale)?

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: Required: Prepare a production cost worksheet using weighted-average for the cutting department.

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

Why do we need to accumulate and calculate unit costs in process costing (and also job costing)?

Which of the following most accurately describes the contrast between process and job costing?

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.

In the computation of the cost per equivalent unit,the weighted-average method of process costing considers all the costs ________.