Exam 3: Costing Systems- Process Costing

Which of the following is not included in conversion costs?

In a process costing system, each department's production costs are transferred to the next department and ultimately to the Finished Goods Inventory account.

Information for the current month for the Polishing Department is shown below. Direct Materials Conversion Costs Begining work in process inventory \ 8,100 \ 10,525 Current month's costs \ 31,240 \ 56,240 Ecuivalent units based on the FIFO costing gmethod 71,000 74,000 Urits completech 69,000 Units in ending work in process inventoty -6,000 Direct materials are added at the beginning of the process. Beginning work in process is 30 percent complete as to conversion costs; ending work in process inventory is 80 percent complete. Determine the cost of ending work in process inventory.

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. -The number of units started and completed during March was

The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the FIFO costing method. The following data are available for one of its accounting periods: Units Begining work in process 26,000 (70 percent complete for conversion costs) Units stented 180,000 Units transferred out 191,000 Endling work in process 15,000 (60 percent complete for conversion costs) - Equivalent units for conversion costs are

Which method assumes that all units in beginning work in process (WIP) are completed in the current period?

Average costing method disregards the previous period cost of units started last period.

Equivalent production is a measure of productive output of units for a period of time, expressed in terms of fully completed or equivalent whole units produced.

The following data were taken from the accounting records of a company that uses the FIFO method in its process costing system: Beginning work in process inventory: 20,000 units (materials 100% complete, conversion costs 60% complete) Started in process during the period: 80,000 units Ending work in process inventory: 30,000 units (materials 100% complete, conversion Costs 70% complete) The equivalent units are

A company that manufactures potato chips would probably use a process costing system.

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

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

If a company uses a process costing system to account for costs in its four production departments, how many Work in Process accounts will it use?

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. -Units transferred out during October were

Nader, Inc., has the following information available: Costs firom Beginuing Inventory Costs finm Current Period 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

In a process costing system, products flow in a LIFO manner, from department to department.

If 45,000 units of ending work in process inventory are 60 percent complete as to conversion costs, 27,000 equivalent units of conversion costs must be incurred to complete these units during the next period.

The number of equivalent units of production may be larger than the number of completed units during the period.

Average costing method tries to match cost flow with physical flow of production.

Use the following information to perform the calculations requested below, assuming that the FIFO costing approach to a process costing system is being used. Beginning work in process inventory: 16,000 units, 100 percent complete as to direct materials, 85 percent complete as to conversion costs Ending work in process inventory: 36,000 units, 100 percent complete as to direct materials, 70 percent complete as to conversion costs Units started during the month: 59,000 a. Calculate units to be accounted for during the month. b. Calculate units started and completed during the month. c. Calculate equivalent units for direct materials. d. Calculate equivalent units for conversion costs.