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Exam 4: Process Costing

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Question 121

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Darden Corporation uses the weighted-average 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 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $16,200. An additional 84,000 units were started into production during the month. There were 17,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $836,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

A) $8.286
B) $9.000
C) $8.804
D) $9.963

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

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Question 122

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The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for". The "Costs accounted for" portion of the cost reconciliation report includes the cost of ending work in process inventory and the cost of beginning work in process inventory.

A) True
B) False

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Question 123

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San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows: Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. San Juan Minerals does not distinguish between variable and fixed overhead costs.Assume that San Juan Minerals uses the step-down method to allocate service department costs, starting with Maintenance. The total overhead allocated from Maintenance to Mining would be closest to:

In October, one of the processing departments at Ingersoll Corporation had beginning work in process inventory of $16,000 and ending work in process inventory of $29,000. During the month, $191,000 of costs were added to production. The company uses the first-in, first-out method in its process costing system.Required:Construct a cost reconciliation report for the department for the month of October.

Mullins Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: (Round equivalent units to the nearest whole number and round all other intermediate calculations to 3 decimal places.)

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 500 units. The costs and percentage completion of these units in beginning inventory were: A total of 6,900 units were started and 6,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.How many units are in ending work in process inventory in the first processing department at the end of the month?

Vercher Natal Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Administration and Information Technology (IT), and two operating departments, Prenatal Care and Postnatal Care. Administration Department costs are allocated first on the basis of employees and Information Technology Department costs are allocated second on the basis of computers. Required: Allocate the service department costs to the operating departments using the step-down method.

Activity in Saggers Corporation's Assembly Department for the month of March follows: The equivalent units for conversion for March, using the weighted-average method, are:

Miller Corporation manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information: The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs. Required:a. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.b. Determine the cost transferred to finished goods.c. Determine the amount of cost that should be assigned to the ending work in process inventory.

Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied.In the first step of the allocation, the amount of Administration Department cost allocated to the Assembly Department is closest to:

Details of the manufacturing activity in Amy Corporation's Assembly Department for the month of December is given below: All materials are added at the beginning of processing in the Assembly Department.The equivalent units for labor and overhead for the month, using the first-in, first-out method, is:

In a process costing system, overhead is allocated to departments after being applied to units of product.

In the cost reconciliation report under the first-in, first-out method, the costs accounted for equals the cost of units transferred out plus the costs added during the period.

Que Corporation uses the first-in, first-out method in its process costing system. Operating data for the Cutting Department for the month of March appear below: According to the company's records, the conversion cost in beginning work in process inventory was $3,705 at the beginning of March. Additional conversion costs of $210,213 were incurred in the department during the month.The cost per equivalent unit for conversion costs for March is closest to:

The following journal entry would be made in a processing costing system when units that have been completed in the final processing department are transferred to the finished goods warehouse:

Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: Costs in the Personnel Department total $765,000 per year.Suppose the company uses the step-down method and Personnel Department costs are allocated first. The amount of the Personnel Department cost allocated to the Engineering Department would be closest to:

Under the weighted-average method, the cost of ending work in process inventory is determined by dividing the equivalent units of production for ending inventory by the cost per equivalent unit for each cost category and then summing the result.

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,900 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,300 units were started and 7,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?

In July, one of the processing departments at Junkin Corporation had beginning work in process inventory of $29,000 and ending work in process inventory of $31,000. During the month, $205,000 of costs were added to production and the cost of units transferred out from the department was $203,000.Required:Construct a cost reconciliation report for the department for the month of July.

In the cost reconciliation report under the weighted-average method, the "Costs to be accounted for" section contains which of the following items?