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Exam 20: Process Costing

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Question 1

True/False

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Cost amounts that are transferred out of one department become the transferred in cost for the next department.

A) True
B) False

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Question 2

Multiple Choice

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The ________ account is credited to adjust for overallocated overhead costs.

A) Cost of Goods Sold
B) Sales Revenue
C) Manufacturing Overhead
D) Finished Goods Inventory

E) B) and C)
F) C) and D)

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Question 3

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The first-in,first-out (FIFO) method creates better month-to-month cost comparisons than the weighted-average method ________.

Under the first-in,first-out (FIFO)method,prior period costs are not merged with current period costs.

A production cost report helps managers identify the costs that can be reduced in the production process.

Ego Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2,000 gallons of partially processed product in production.During January,34,000 gallons were transferred in from the Mixing Department,and 32,000 gallons were completed and transferred out.At the end of the month,there were 4,000 gallons of partially processed product remaining in the Refining Department.See additional details below. Refining Department,beginning balance at January 1 Costs added during January Refining Department,ending balance at January 31 What was the cost per equivalent unit with respect to conversion costs for the Refining Department in the month of January? (Use the weighted-average method,and round your calculations to the nearest cent. )

The production cost reports show the calculations for the physical flows and the ________ flows of the products.

Anthony Products manufactures a line of desk chairs.Anthony's production operations are divided into two departments - Department 1 and Department 2.The company uses a process costing system.Anthony incurred the following costs during the year to produce 26,400 chairs: If Anthony sells 23,100 chairs during the year,what will be the cost per chair produced? (Round your answer to two decimal places. )

During the month,Diamond Manufacturing incurred $47,000 in direct labor costs in Department 1,$23,000 direct labor costs in Department 2,and $3,500 of indirect labor costs.Which of the following is not part of the summary journal entry to record these transactions?

Both job order costing and process costing ________.

Babson Sugar,Inc.has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from August for the Decolorization Department are as follows: The ending Work-in-Process Inventory is 100% and 65% complete with respect to direct materials and conversion costs,respectively.The weighted-average method is used.Compute the cost per equivalent unit for the units transferred to the Boiling process.(Round any intermediate calculations and your final answer to two decimal places. )

During August,the Filtering Department of Olive,Inc.had beginning Work-in-Process inventory of 180 units with costs of $50,000.595 units were transferred in during the month.It had 100 units in ending Work-in-Process Inventory.Under the first-in,first-out (FIFO) method,current period equivalent units of production for transferred in units in beginning Work-in-Process Inventory of the Filtering Department is ________.

WSP Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,40,000 fl.oz.of chemicals were started in production.Of these,32,000 fl.oz.were completed and 8,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. At the end of the month,WSP calculated equivalent units.The ending inventory in the Mixing Department was 60% complete with respect to conversion costs.With respect to conversion costs,how many equivalent units were calculated for the product that was completed and for ending inventory?

The Assembling Department of Mat Liners,Inc.had 8,000 units in process on December 1 and received 11,000 units from the Sewing Department.Calculate the number of units to account for by the Assembling Department for December.

During September,the Filtering Department of Coronet,Inc.had a beginning Work-in-Process Inventory of 800 units with costs of $125,000.During the month,800 units were transferred in from the Milling Department with transferred in costs of $166,000.It had 400 units in ending Work-in-Process Inventory.What is the total cost of production for the units transferred to the Filtering Department in September under the first-in,first-out (FIFO) method? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

A process costing system is most suitable for businesses that manufacture batches of unique products or provide specialized services.

The Assembly Department of One Roof,Inc. ,manufacturer of computers,incurred $280,000 in direct material costs and $80,000 in conversion costs.The equivalent units of production for direct materials and conversion costs are 1,500 and 800,respectively.The cost per equivalent unit of production (EUP) for conversion costs is ________.(Round your answer to the nearest cent. )

The Refining Department of Sweet Sugar,Inc.had 80,000 tons of sugar to account for in July.Of the 80,000 tons,49,000 tons were completed and transferred to the Boiling Department,and the remaining 31,000 tons were 75% complete.The materials required for production are added at the beginning of the process.Conversion costs are added equally throughout the refining process.Calculate the total equivalent units of production for direct materials.

In a process costing system,a department's total production costs incurred in a particular period must equal the total costs transferred out of the department.

The production cost report for Department 2 shows that $452,000 was assigned to the 53,000 units transferred to Finished Goods Inventory.Cost of goods manufactured equals $452,000.