Exam 21: Costing Systems Process Costing

Because process costing is normally associated with a continuous production flow, products that are in process at the beginning of the period are assumed to be the first products completed during the current period.

The type of product costing system used by a company is dictated by the

he Bakersfield Company has the following information available: At the beginning of the period, there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the current period, 5,800 units were started and completed. Ending inventory contained 400 units that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. (Assume that the company uses the FIFO process costing method.) The cost of completing a unit during the current period was

The number of equivalent units produced for direct materials cost using the FIFO costing procedure is the sum of the units in beginning work in process inventory, units started and completed during the period, and the productive effort applied to ending work in process inventory.

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

The product unit cost is the sum of the cost elements added in all production department processes.

When computing the cost per equivalent unit, the FIFO process costing method considers

Cancun Company uses a FIFO process costing system. The following costs relate to work in process during November: At the end of the last period, all direct materials had been added, and the units were 40% complete for conversion costs. At the end of this period, all direct materials for the 1,000 units had been added, and 70% of conversion costs had been incurred. Prepare a process report for November, and identify the amount to be transferred.

Natasha Corporation's Shaping Department had no beginning inventory and completed and transferred to finished goods 920 units during May. Ending inventory for May contained 80 units that were 30 percent complete as to conversion costs and 100 percent complete as to direct materials costs. The charges to the Shaping Department during May were $3,776 for conversion costs and $2,500 for direct materials costs. Compute the cost of work transferred out if Natasha Corporation uses the FIFO costing method.

Under the FIFO cost flow assumption, separate unit cost analyses are not used for each accounting period because costs of different periods are averaged.

During October, Department A started 320,000 units of product in a particular manufacturing process. The beginning work in process inventory was 50,000 units, and the ending inventory was 30,000 units. Direct materials are introduced at the start of processing, and beginning and ending inventories are considered to be 50 percent complete with respect to conversion costs. Department A uses the FIFO costing method. The number of equivalent units for conversion costs was

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. The number of equivalent units produced with respect to conversion costs is

Regardless of the cost approach used, in a process costing system, costs attached to units in beginning inventory are included in the computation of costs per equivalent unit.

D.Q. Company uses the FIFO method in its process costing system. Beginning inventory in the mixing department consisted of 6,000 units that were 75 percent complete with respect to conversion costs. Ending work in process inventory consisted of 5,000 units that were 60 percent complete with respect to conversion costs. If 12,000 units were transferred to the next processing department during the period, the equivalent units for conversion costs would be

Which of the following entities probably would use a process costing system?

The Finishing Department of Garr Company has the following information available for 2010: Assuming that Garr Company uses the FIFO process costing method, what are the equivalent units for conversion costs for 2010?