Exam 19: Costing Systems Process Costing

Direct materials costs and conversion costs for the current period on a FIFO process cost report are divided by their respective units of equivalent production to arrive at the

In a process costing system,all production costs are assigned to departments or processes.

Direct materials are most likely added at the beginning of the process.

For a paint manufacturing company,the cost of producing each gallon of paint will likely differ.

To decide the cost of a product,managers use information about past and projected product costing and customer preferences.

Conversion costs are defined as the combined total of direct materials costs and direct labor costs incurred by a production department.

The average costing method in process costing disregards the ending inventory assuming that direct material costs and conversion costs are pertaining to the immediate next period.

Information for the current month for Process D is shown below. Units completed-72,000 Units in ending work in process inventory-5,000 Direct materials are added at the beginning of the process.Beginning work in process is 50 percent complete as to conversion costs;ending work in process inventory is 40 percent complete.Determine the cost of ending work in process inventory.

Jackson Electronics Inc.manufactures a variety of microelectronic component parts and utilizes a process costing system.The following information was provided by the accounting department as of July 31,2014: a.Units started during the month of July totaled 118,200. b.Units partially complete as of July 31 equaled 7,400. c.Ending work in process inventory as of July 31,2014,was 70 percent complete. d.Direct materials are added at the beginning of the process,and conversion costs are incurred uniformly throughout the process. e.Units in process on July 1,2014-8,200 units. Using the information provided,compute the equivalent units of production for direct materials and conversion costs for July using the average costing method.

Which of the following is most likely done by managers,when actual costs of a product exceed expected costs?

Montell Inc.produces a variety of outdoor equipment products and utilizes a process costing system.The following information was provided by the accounting department as of March 31,2014: a.Units started during the month of March totaled 314,000. b.Units partially complete as of March 31 equaled 76,000. c.Ending work in process inventory as of March 31,2014,was 80 percent complete. d.Direct materials are added at the beginning of the process,and conversion costs are incurred uniformly throughout the process. e.No units were in process on March 1,2014. Using the information provided,compute the equivalent units of production for direct materials and conversion costs for the month ended March 31,2014,assuming a FIFO costing flow.

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

Equivalent units are defined as the number of units completed and sold during the current period.

The average costing method is a costing method in which the cost flow follows the logical product flow.

Use the following data provided by Star Inc.to answer the questions below.The company uses a process costing system. The FIFO costing method is used by the company. -Equivalent units for direct materials of Star Inc.during the month totaled

During April,Department A started 400,000 units of product in a particular production process.The beginning work in process inventory was 40,000 units,and the ending inventory was 50,000 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 from Department A during April were

Separate equivalent units of production usually are calculated for materials and conversion costs.

Which of the following costing methods combines the cost of units in beginning inventory with the current period costs to determine the unit production cost?

How are costs recognized,matched,and measured in a process costing system?

Use the following information to perform the calculations requested below,assuming that the average costing approach to a process costing system is being used. Beginning work in process inventory: 7,000 units,100 percent complete as to direct materials,65 percent complete as to conversion costs Ending work in process inventory: 22,500 units,100 percent complete as to direct materials,75 percent complete as to conversion costs Units started during the month: 46,000 a.Calculate units completed and transferred out during the month. b.Calculate units to be accounted for during the month. c.Calculate equivalent units for conversion costs. d.Calculate equivalent units for direct materials.