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Exam 16: Process Costing

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Question 31

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Dirt Cleaners, Inc. has the following production data for January: Transferred out 50,000 units Ending work in process 6,000 units The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $4 per unit and conversion costs are $11 per unit. Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process.

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Question 32

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Total physical units to be accounted for are equal to the units

A) started (or transferred) into production.
B) started (or transferred) into production plus the units in beginning work in process.
C) started (or transferred) into production less the units in beginning work in process.
D) completed and transferred out.

E) A) and B)
F) All of the above

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Question 33

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Holton Company has the following equivalent units for July: materials 20,000 and conversion 18,000. Production cost data are: The unit production costs for July are:

Equivalent units of production must be calculated before the unit production costs can be computed.

Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system.

Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $140,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000. Instructions Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2.

The Nitrogen Fixation Department of Tomco Company began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 12,000 units. Ending work in process contains 10,000 units that are 100% complete as to materials and 40% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December.

A process with 1,600 units of beginning work in process, completed and transferred out 25,000 units during a period. There were 10,000 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How much is equivalent units of production for the period for material costs?

Unit production costs are expressed in terms of _____________ units of production.

The ledger of Kinsler Company has the following work in process account. Production records show that there were 700 units in the beginning inventory, 30% complete, 3,800 units started, and 4,000 units transferred. The beginning work in process had materials cost of $3,060 and conversion costs of $2,240. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. Instructions (a) How many units are in process at May 31? (b) What is the unit materials cost for May? (c) What is the unit conversion cost for May? (d) What is the total cost of units transferred out in May? (e) What is the cost of the May 31 inventory?

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed. Costs transferred out of the Baking Department will be transferred to:

Baker Winery manufactures a fine wine in two departments, Fermenting and Bottling. In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine is bottled and then sent to the finished goods warehouse. Labor and overhead are incurred uniformly through both processes. Materials are entered at the beginning of both processes. Cost and production data for the Fermenting Department for December 2016 are presented below: Cost data Instructions (a) Compute the equivalent units of production. (b) Determine the unit production costs. (c) Determine the costs to be assigned to units transferred out and ending work in process.

In Kapler Company, the Cutting Department had beginning work in process of 8,000 units, transferred out 25,000 units, and had an ending work in process of 4,000 units. How many units were started by Kapler during the month?

The Slicing Department production process shows: How many units were started into production in Department 1?

In a process cost system,

Materials requisitions are:

A process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:

The production cost report summarizes the activities that have taken place in a department or process over a period of time. Identify the major types of information found on a production cost report, and indicate who in the business organization uses this type of information and for what purpose the information is used.