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Exam 3: Process Cost Systems

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Question 51

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The first step in determining the cost of goods completed and ending inventory valuation using process costing is to calculate equivalent units of production.

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B) False

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Question 52

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The Bottling Department of Mountain Springs Water Company had 5,000 liters in beginning work in process inventory 20% complete.During the period, 58,000 liters were completed.The ending work in process inventory was 3,000 liters 90% complete.What are the equivalent units for conversion costs under the FIFO method?

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Question 53

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The last step in the preparation of a cost of production report is the calculation of equivalent units of production.

Mocha Company manufactures a single product by a continuous process, involving three production departments.The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively.Work in process at the beginning of the period for Department 1 was $75,000, and work in process at the end of the period totaled $60,000.The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively.In addition, work in process at the beginning of the period for Department 2 totaled $75,000, and work in process at the end of the period totaled $60,000.The journal entry to record the flow of costs into Department 3 during the period is

Match each business that follows to the type of costing system a or b it would typically use. -Flour mill

The debits to Work in Process-Assembly Department for May, together with data concerning production, are as follows: May 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 All direct materials are placed in process at the beginning of the process and the first­in, first­out method is used to cost inventories.The materials cost per equivalent unit for May is

Match each business that follows to the type of costing system a or b it would typically use. -Gasoline refinery

Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period?

For which of the following businesses would a process cost system be appropriate?

In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?

What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories?

Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

Discuss how equivalent units are computed under the average cost method.

In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred was $84,000, and applied factory overhead was $45,500.What is the total conversion cost?

Which of the following would use a process costing system?

Direct materials, direct labor, and factory overhead are assigned to each manufacturing process in a process costing system.

Using the FIFO method and rounding cost per unit to four decimal places, the cost of goods completed and transferred out during July was

The cost per equivalent units of direct materials and conversion in the Bottling Department of Mountain Springs Water Company is $0.45 and $0.12, respectively.The equivalent units to be assigned costs are as follows. The beginning work in process inventory had a cost of $2,200.Determine the cost of completed and transferred out production, and the ending work in process inventory.

If 10,000 units that were 50% completed are in process at November 1, 90,000 units were completed during November, and 20,000 were 20% completed at November 30, the number of equivalent units of production for November was 90,000.Assume no loss of units in production and that inventories are costed by the first-in, first- out method.

The number of equivalent units of production for conversion costs for the period was