Exam 5: Process Costing and Operation Costing

Which of the following product features would best suit a hybrid costing system?

Normal spoilage can always be avoided by a more efficient approach to production.

South River Chemicals Pty Ltd manufactures a product called Zybek. Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process. The following data pertain to the month of May. What are the unit costs for the period (rounded to two decimal places) assuming FIFO costing?

Healthy Flavour is a food processing company that makes a product called Health Nut soup in two processes-blending and condensing. The output of the blending department is transferred to the condensing department. All materials are added at the beginning of the blending process, and conversion activity occurs uniformly throughout both processes. The following data pertain to the month of April in the blending department. Using the FIFO method of process costing, calculate the equivalent units of direct materials for the month of April.

Collins Chemicals produces a compound through two processes. For its second process for a particular period, Collins had an opening WIP inventory of 100 units halfway through the process; 2300 units completed in the period; and a closing WIP inventory of 400 units three-quarters of the way through the process. Materials are added at the beginning of the process and conversion costs are incurred uniformly. Calculate the equivalent units for transferred in costs for the period if the firm used FIFO costing.

For a manufacturer that produces large batches of automotive parts, which type of costing system would you recommend? Justify your answer.

What is the inventory formula that shows the physical flow of production units during a given month, under the weighted average method?

When accounting for the costs of abnormal spoilage at the end of the period, the costs of abnormal spoilage are

The following data apply to Zilch Ltd in its mixing department for the month of April. All material is introduced at the start of the process and conversion occurs evenly through the process. Spoilage occurred at the midpoint in the process. Using the weighted average method, what are the equivalent units for conversion?

South River Chemicals Pty Ltd manufactures a product called Zybek. Direct materials are added at the end of the process and conversion activity occurs uniformly throughout the process. The following data pertain to the month of May. Using the weighted average method of process costing, calculate the equivalent units of direct materials and conversion costs for the month of May.

Which of the following represents the production units used to calculate equivalent units under the weighted average method?

Operational costing is appropriate where i. there are different material inputs. ii. there are common material inputs. iii. processes are identical. iv. different combinations of specific processes apply to different products.

The difference in cost per equivalent units between the weighted average method and the FIFO method

In which of the following ways is abnormal spoilage accounted for?

Assuming that there was no beginning work in process inventory and the ending work in process inventory is 50 per cent complete as to conversion costs, the number of equivalent units as to conversion costs would be

Process costing can be used in service businesses if the service is routine and repetitive.

In both job and process costing, the journal entry to record predetermined overhead is.

South River Chemicals Pty Ltd manufactures a product called Zybek. Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process. The following selected data pertain to the month of May. What are the unit costs for the period (rounded to two decimal places) assuming weighted average costing?

Heara Ltd manufactures metal sheets, and uses the FIFO process costing. On 1 May the Rolling Department had 3000 units work in progress, which were 50 per cent completed as to conversion costs. During May 8000 units were completed and transferred out. The remaining work in progress on 30 May was 2000 units at 50 per cent complete in terms of conversion rate. What is the equivalent unit of conversion?

Which of the following are components of conversion costs?