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Exam 20: Process Costing

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Question 31

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Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. - Calculate the cost per equivalent unit of conversion.

A) $3.15
B) $2.90
C) $3.00
D) $2.76
E) $3.68

F) A) and D)
G) B) and E)

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Question 32

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Equivalent units of production are equal to:

A) Physical units that were started and completed during a period.
B) The number of units that could have been started and completed given the costs incurred during the period.
C) The number of finished units actually produced during a period.
D) The number of units still in process at the end of a period.
E) The number of units started into the process during a period.

F) C) and D)
G) A) and C)

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Question 33

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During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. - Compute the number of physical units transferred to finished goods.

During July, the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July. July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of July, 15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor. The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the weighted average method of inventory costing. $\begin{array} { l | l | l } & \begin{array} { l } \text { Equivalent } \\\text { Units }\end{array} & \begin{array} { l } \text { Total } \\\text { Cost }\end{array} \\\hline \text { Beginning Work in Process: } & & \\\hline \text { Costs from prior month } & & \$ 7,000 \\\hline \text { Materials added } & 300 & \\\hline \text { Labor and overhead added } & 375 & \\\hline \text { Started and completed goods: } & & \\\hline\end{array}$ $\begin{array} { | l | l | l } \hline \text { Materials added } & 2,000 & \\\hline \text { Labor and overhead added } & 2,000 & \\\hline \text { Ending Work in Process: } & & \\\hline \text { Materials added } & 320 & \\\hline \text { Labor and overhead added } & 360 &\end{array}$ The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the units that were started and completed during August.

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. Calculate the equivalent units of production for the year: $\begin{array} { l r r } \text { Beginning Work in Process } ( 40 \% \text { complete, } \$ 1,100 ) & 200 & \text { units } \\\text { Ending inventory of Work in Process } ( 80 \% \text { complete) } & 400 & \text { units } \\\text { Total units started during the year } & 320 & \text { units }\end{array}$

During November, the production department of a process operations system completed and transferred to finished goods 35,000 units that were in process at the beginning of November and 110,000 units that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of November, 40,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. - Compute the number of equivalent units with respect to materials for November using the weighted-average method.

The cost object in a process costing system is the specific job.

A production department is an organizational unit that has the responsibility for the complete processing of one particular product.

A hybrid costing system would be most appropriate when:

What are the four steps in accounting for production activity in a period?

Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the weighted-average method of inventory costing. Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending Work in Process inventory.

Equivalent units of production for direct materials and direct labor are always the same.

A process costing system records all factory overhead costs directly in the Work in Process Inventory accounts.

The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, which reconciles ________ with the ________.

Bagger, Inc. uses a process costing system. The following operating and cost data occurred during October: Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. - If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?

A company uses the FIFO method for inventory costing. At the beginning of a period, the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the number of equivalent units produced by the department.

Manufacturers that utilize process operations produce large quantities of identical products.