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Exam 18: Costing Systems- Process Costing

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Question 61

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The Bakersfield Company has the following information available: $\begin{array}{lrr}&\text { Costs from Beginning}&\text { Costs from}\\&\text { Inventory}&\text { Current Period}\\\text { Direct materials } & \$ 3,650 & \$ 31,620 \\\text { Conversion costs } & 9,120 & 143,100\end{array}$ 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 equivalent units of production for direct materials and conversion costs,respectively,were

A) 6,200 for direct materials and 6,360 for conversion costs.
B) 5,400 for direct materials and 6,520 for conversion costs.
C) 6,200 for direct materials and 5,960 for conversion costs.
D) 7,000 for direct materials and 6,520 for conversion costs.

E) B) and C)
F) None of the above

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Question 62

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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

A) 12,500 units.
B) 10,500 units.
C) 13,500 units.
D) 13,000 units.

E) A) and C)
F) None of the above

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Question 63

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Information for the current month for the Polishing Department is shown below. $\begin{array} { l r r } & \text { Direct Materials}& \text { Conversion Cost } \\\text { Beginning work in process inventory } & \$ 8,100 & \$ 10,525 \\\text { Current month's costs } & \$ 31,240 & \$ 56,240 \\\text { Equivalent units based on the FIFO costing } & 7,000 & 74,000 \\\text { method } & & \\& & \\\text { Units completed ? } 69,000 & & \\\text { Units in ending work in process inventory } 66,000 & &\end{array}$ 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.

The most commonly used method to assign costs to products in process costing is the FIFO costing method.

Weston Company uses the FIFO method in its process costing system.The first processing department,the Welding Department,started the month with 18,000 units in its beginning work in process inventory that were 50 percent complete with respect to conversion costs.The conversion costs in the beginning work in process inventory were $52,200.An additional 55,000 units were started into production during the month.There were 16,000 units in the ending work in process inventory of the Welding Department that were 20 percent complete with respect to conversion costs.A total of $284,160 in conversion costs were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for the month on the department's process cost report? (Round to three decimal places.)

Conversion costs per equivalent unit will be same under both FIFO and average costing methods.

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

Cancun Company uses a FIFO process costing system. The following costs relate to work in process during November: $\begin{array}{lr}\text { Beginning inventory }\\\text { Direct materials } & \$ 7,200 \\\text { Direct labor } & 380 \\\text { Overhead } & 630\\\\\text { Current month's costs } & \\\text { Direct materials } & \$ 51,612 \\\text { Direct labor } & 21,562 \\\text { Overhead } & 32,342\end{array}$ 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.

In a process costing system,product costs are traced to individual products.

For a company having two or more production departments,at the end of the accounting period a separate process cost report for each department is prepared.

Unit costs are determined by dividing the total costs of the period by the equivalent units.

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

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.

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

Data for Osaka Corporation for the month of June 20xx are as follows: Assume the company uses average costing method. Prepare a process cost report for June.

In a process costing system,the amount of total costs to be accounted for is made up of direct materials and conversion costs incurred during the current period plus those costs included in the beginning Work in Process Inventory account.

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.

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

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

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 average costing method.The following data are available for one of its accounting periods: $\begin{array}{lr}&\text { Units }\\\text { Beginning work in process } & 26,000& \text { (70 percent complete for } \\&&\text { conversion costs) } \\\text { Units started } & 180,000 \\\text { Units transferred out } & 191,000 \\\text { Ending work in process } & 15,000 &\text { (60 percent complete for } \\&& \text { conversion costs) }\end{array}$ Equivalent units for conversion costs are