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Exam 18: Costing Systems- Process Costing

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Question 21

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Production has just been completed for January 20xx by Colombo,Inc.The company utilizes a process costing system,and the following accounting and operating information was obtained from company records: a. Beginning work in process inventory consisted of units totaling 8,200 that were 60 percent complete as of January 1, 20xx (all direct materials were added to the units at the beginning of the production process that took place in the preceding month). b. 260,000 units were started during January. c. At the end of the month, 22,400 units were in work in process inventory and were 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. From the figures shown above, and assuming a FIFO costing flow, prepare in good form a schedule of equivalent production for the month ended January 31, 20xx.

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Question 22

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A process costing system accounts for product costs

A) for a specific period of time.
B) almost always in a single Work in Process Inventory account.
C) without regard to the process that created the cost.
D) for specific orders.

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

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Question 23

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In a process cost report,accounting for physical units excludes the physical units in beginning inventory to arrive at "units to be accounted for."

Nader,Inc.,has the following information available: $\begin{array}{lrr}&\text { Costs from }&\text { Costs from }\\&\text { Beginning Inventory}&\text { Curent Period }\\\text { Direct materials } & \$ 2,300 & \$ 21,252 \\\text { Conversion costs } & 6,200 & 150,536\end{array}$ At the beginning of the period,there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,4,300 units were started and completed.Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO costing method.) The total costs that will be transferred into the Finished Goods Inventory account during the current period are

A company that manufactures potato chips would probably use a process costing system.

Nader,Inc.,has the following information available: $\begin{array}{lrr}&\text { Costs from } & \text { Costsfrom } \\&\text { Beginning } & \text { Current Period } \\&\text { Inventory }\\\text { Direct materials } & \$ 2,300 & \$ 21,252 \\\text { Conversion costs } & 6,200 & 150,536\end{array}$ At the beginning of the period,there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,4,300 units were started and completed.Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO costing method.) The equivalent units of production for direct materials and conversion costs,respectively,were

Use the following data from a company using a process costing system to answer the question(s) below. Beginning Work in Process Inventory on June 1 : 1,000 units - 100 percent complete as to direct materials 80 percent complete as to conversion costs Units Started During June: 6,500 units Ending Work in Pracess Inventory on June 30: 1,200 units - 100 percent complete as to direct materials 40 percent complete as to conversion costs The FIFO process costing method is used by the company. Equivalent units for direct materials during the month totaled

Use the following information to perform the calculations requested below,assuming that the FIFO costing approach to a process costing system is being used. Beginning work in process inventory: 16,000 units,100 percent complete as to direct materials,85 percent complete as to conversion costs Ending work in process inventory: 36,000 units,100 percent complete as to direct materials,70 percent complete as to conversion costs Units started during the month: 59,000 a. Calculate units to be accounted for during the month. b. Calculate units started and completed during the month. c. Calculate equivalent units for direct materials. d. Calculate equivalent units for conversion costs.

Identify the following activities, performed on a manufactured product, as value-adding (V) or nonvalue-adding (NV).

Under the FIFO cost flow assumption,separate unit cost analyses are not used for each accounting period because costs of different periods are averaged.

Equivalent production is a measure of productive output of units for a period of time,expressed in terms of fully completed or equivalent whole units produced.

Under the average costing method in process costing system,the costs in beginning inventory are combined with current period costs to compute an average product unit cost.

Information for the current month for Process D is shown below. $\begin{array}{lrr}&\text { Direct Materials }&\text { Conversion Costs }\\\text { Beginning work in process inventory } & \$ 6,400 & \$ 9,600 \\\text { Current month's costs } & 31,740 & 51,100 \\\text { Equivalent units based on the FIFO costing } & & \\\text { method } & 69.000 & 70.000\end{array}$ Direct materials are added at the beginning of the process.Beginning work in process is 50 percent complete as to conversion costs; ending work in process inventory is 40 percent complete.Determine the cost of ending work in process inventory.

For a company having two or more production departments,at the end of the accounting period a separate process cost report for each department is prepared.

Data for Osaka Corporation for the month of June 20xx are as follows: $\begin{array}{ll} \text { Beginning work in process inventory: } & \text { Operations for the month of June: } \\\text { Units - } 800 & \text { Units started-14,000 } \\\text { Direct materials - } 100 \% \text { complete } & \text { Direct materials costs- } \$ 57,400 \\\text { Conversion costs- } 70 \% \text { complete } & \text { Conversion costs- } \$ 50,122\\ \text {Direct materials costs -\$ 2,860 }\\ \text {Conversion costs- \( \$ 2,150 \)}\\ \text {Ending work in process inventory:}\\ \text {Units \( -1,500 \)}\\ \text {Direct materials \( -100 \% \) complete }\\ \text {Conversion costs- \( 30 \% \) complete}\\\end{array}$ Assume the company uses average costing method. Prepare a process cost report for June.

The following unit data were assembled for the heating process of Morgan Processing,Inc.,for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. $\begin{array}{llr}&\text { Units }\\\text { Beginning work in process inventory } &\\ \text { (30 percent complete) } &5,000\\ \text { Units started in August } &44,000\\ \text { Ending work in process } &\\ \text {(60 percent complete) } &4,500\\\end{array}$ The number of equivalent units produced with respect to direct materials costs is

During October,Department A started 320,000 units of product in a particular manufacturing process.The beginning work in process inventory was 50,000 units,and the ending inventory was 30,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 50 percent complete with respect to conversion costs.Department A uses the FIFO costing method. Units transferred out during October were

Listed below are the activities of Tammy's Toy Store. Match each activity with how it would be classified in the cost hierarchy used with ABC

The product unit cost is the sum of the cost elements added in all production department processes.

Average costing method tries to match cost flow with physical flow of production.