Exam 17: Process Costing

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 720 kgs of tungsten carbide at $280 per kg.It started manufacture of 4200 vases and completed and transferred 3800 vases during the month.It has 400 vases in the process at the end of the month.It incurred direct labor charges of $1700 and other manufacturing costs of $600,which included electricity costs of $700.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 40% complete in respect of conversion costs.What is the total conversion costs for the month of July?

What is the difference between a weighted-average method of process costing and a first-in,first-out method of process costing?

In a process-costing system average unit costs are calculated ________.

Sodius Chemical Inc.placed 220,000 liters of direct materials into the mixing process.At the end of the month,5,000 liters were still in process,30% converted as to labor and factory overhead.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Sodius uses weighted-average costing. Required: a.Determine the equivalent units in process for direct materials and conversion costs,assuming there was no beginning inventory. b.Determine the equivalent units in process for direct materials and conversion costs,assuming that 12,000 liters of chemicals were 40% complete prior to the addition of the 220,000 liters.

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 2017 for the Assembly department. The cost details for the month of March are as follows: Work in process,beginning inventory: What amount of conversion costs is assigned to the ending Work-in-Process account for March? (Round intermediary dollar amounts to the nearest cent and unit amounts to the nearest whole unit. )

The last step in a process-costing system is to compute cost per equivalent unit.

Which if the following are not conversion costs?

Direct Disk Drive Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were for June 2017: How many units must be accounted for during the period?

There are basically two distinct methods of calculating product costs. Required: Compare and contrast the two methods.

Charlie Chairs Inc. ,manufactures plastic moldings for car seats.Its costing system utilizes 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. Data for Department A for February 2017 are: Costs for Department A for February 2017 are: What is the unit cost per equivalent unit of beginning inventory in Department A? (Round the final answer to the nearest whole dollar. )

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

An operation is a standardized method or technique performed repetitively,often on different materials,resulting in different finished goods.

Jane Industries manufactures plastic toys.During October,Jane's Fabrication Department started work on 10,400 models.During the month,the company completed 11,200 models,and transferred them to the Distribution Department.The company ended the month with 2200 models in ending inventory.There were 3000 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 is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October? (Round intermediary calculations to the nearest cent. )

Four Seasons Company makes snow blowers.Materials are added at the beginning of the process and conversion costs are uniformly incurred.At the beginning of September,work in process is 40% complete and at the end of the month it is 60% complete.Other data for the month include: Required: a.Prepare a production cost worksheet with supporting schedules using the weighted-average method of process costing. b.Prepare journal entries to record transferring of materials to processing and from processing to finished goods.

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 Department for June 2017 are: Costs for June 2017: What are the equivalent units for direct materials and conversion costs,respectively,for June? (Round final answers to the nearest unit. )

Dessa Cabinetry,Inc. ,manufactures standard sized modular cabinet units for kitchens and other applications within the home.Its costing system utilizes two cost categories,direct materials and conversion costs.Each product must pass through the rough cut department and the finish department.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. Data for Finishing Department for March 2017 are: Costs for Finishing Department for March 2017 are: How many units were completed and transferred out of the Finishing Department during March?

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.

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

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

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