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Exam 18: Process Cost Systems

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Question 41

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The inventory at June 1 and costs charged to Work in Process-Department 60 during June are as follows: During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1. On June 30, the inventory of work in process consisted of 4,600 units which were 85% completed. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process. Determine the following: Round unit cost data to four decimal places, i.e., $4.4444, to minimize rounding differences). a) Equivalent units of production for conversion cost b) Conversion cost per equivalent unit c) Total and unit cost of finished goods started in prior period and completed in the current period d) Total and unit cost of finished goods started and completed in the current period e) Total cost of work in process inventory, June 30

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a) Equivalent units of production:
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Question 42

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The Brass Works is in the process of determining manufacturing overhead. Journalize events a) - d) to Factory Overhead, Administrative Expenses, Selling expenses, or allocated between the three as appropriate. All items were paid in cash at the time of acquisition. Next calculate the overhead application rate and apply overhead to Work in Process. a) Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the value of the policy protects production, the balance protects the administrative offices. Brass Works charges insurance initially to expense. b) The electric bill is received showing an amount due of $1,200. This meter is utilized only by production as the office spaces have their own meter. c) Payroll reports that the sales manager's salary for the period is $3,500 and that production Supervisor's wages for the period are $5,500. d) The stockroom reports that $2,575 in materials were purchased for the production Maintenance Department. e) If the driver for the application of overhead is drop-forge strokes and there are expected to be 1,000 strokes in this period, what is the rate per stroke? Do not round your answer. f) Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead to Work in Process. Round your answers to nearest dollar. Round overhead rate to four decimal places and total cost to nearest dollar.

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Question 43

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The cost of production report reports the cost of the goods sold.

Job order manufacturing and process manufacturing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is

The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 8,000 liters in beginning work in process inventory 60% complete). During the period 70,000 liters were completed. The ending work in process was 3,000 liters 60% completed). What are the total equivalent units for direct materials under the FIFO method if materials were added at the beginning of the process?

Companies recognizing the need to simultaneously produce products with high quality, low cost, and instant availability have adopted a just-in-time processing philosophy.

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

The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,000 liters in beginning work in process inventory 30% complete). During the period 71,000 liters were completed. The ending work in process was 5,000 liters 70% completed). What are the total equivalent units for direct materials using the FIFO method) if materials were added at the beginning of the process?

Erin Company's inventory at December 1, and the costs charged to Work in Process-Department B during December are as follows: During December, all direct materials are transferred from Department A, the units in process at December 1 were completed, and of the 26,000 units entering the department, all were completed except 1,000 units which were 70% completed as to conversion costs. Inventories are costed by the first-in, first-out method. Prepare a cost of production report for December.

The journal entry to record the flow of costs into Department 1 during the period for direct materials is

Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories?

Match each phrase that follows with the term a-h) it describes. -costs incurred in a previous process that are carried forward as part of the product's cost when it moves to the next department

Which of the following is not included in conversion costs?

If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

The Blue Lake Water Company has two departments, Purifying and Bottling. The Bottling Department received 76,000 liters from the Purifying Department. During the period, the Bottling Department completed 74,000 liters, including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How many liters were started and completed during the period?

Match each phrase that follows with the term a-h) it describes. -costing system used by a company producing computer chips

In a process costing system, costs flow into finished goods inventory only from the work in process inventory of the last manufacturing process.

If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900.

Match each phrase that follows with the term a-h) it describes. -a process costing method that costs each period's equivalent units of work with that period's costs per equivalent unit