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Exam 20: Process Cost Systems

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Question 101

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Use this information about Super Co. to answer the questions that follow. ​ The following unit data were assembled for the assembly process of Super Co. for the month of April. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO method.​ ​ -The number of equivalent units produced with respect to conversion costs is

A) 50,200
B) 48,000
C) 53,000
D) 46,200

E) A) and B)
F) None of the above

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Question 102

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In a process costing system, indirect materials are charged to Work in Process.

A) True
B) False

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Question 103

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

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

Erin Company's inventory at December 1 and the costs charged to Work in Process-Department B during December are as follows:​ $\begin{array}{lr}1,200 \text { units, } 40 \% \text { completed } & \$ 47,800 \\\text { From Department } A, 26,000 \text { units } & 845,000 \\\text { Direct labor } & 312,000 \\\text { Factory overhead } & 176,770\end{array}$ 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 that 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.

Match each phrase that follows with the term (a-h) it describes. -Costing system used by a company producing custom window treatments

Use this information about Department F to answer the questions that follow. Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for materials and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710. -If the average cost method is used, the conversion cost per unit (rounded to the nearest cent) would be

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

A firm produces its products by a continuous process involving three production departments, 1 through 3. Prepare journal entries to record the following selected transactions related to production during August: (a)Materials purchased on account, $120,000. (b)Material requisitioned for use in Department 1, $125,700, of which $124,200 entered directly into the product. (c)Labor cost incurred in Department 1, $195,400, of which $174,000 was used directly in the manufacture of the product. (d)Factory overhead costs for Department 1 incurred on account, $54,700. (e)Depreciation on machinery in Department 1, $29,200. (f)Expiration of prepaid insurance chargeable to Department 1, $7,000. (g)Factory overhead applied to production in Department 1, $106,300. (h)Output of Department 1 transferred to Department 2, $362,700.

Kramer Company started its production operations on August 1. During August, the Printing Department completed 17,600 units. There were 4,400 units in ending inventory that were 80% complete with respect to materials and 10% complete with respect to conversion costs. During August, the department had accumulated materials costs of $45,408 and conversion costs of $76,670.?Required: (a) Calculate the cost of the goods transferred out. (b) What is the value of the ending inventory?

Use this information about the Finishing Department to answer the questions that follow. ​ The following production data were taken from the records of the Finishing Department for June: ​ ​ -What is the number of material equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process?

Stevens Company's inventory on March 1 and the costs charged to Work in Process-Department B during March are as follows:​ During March, all direct materials were transferred from Department A, the units in process at March 1 were completed, and of the 55,000 units entering the department, all were completed except 6,000 units that were 70% completed. Inventories are costed by the first-in, first-out method.​Prepare a cost of production report for March. Round unit cost data to four decimal places and total cost to nearest cent.

The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) through (d) to Factory Overhead, Administrative Expenses, or Selling Expenses, or allocate 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 has been determined that 80% of the value of the policy protects production, and the balance protects the administrative offices. Brass Works charges insurance initially to expense. (b)The electric bill shows 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 supervisors' wages for the period are $5,500. (d)The stockroom reports that $2,575 in materials were purchased for the 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 the nearest dollar.?Round overhead rate to three decimal places and total cost to the nearest dollar.

What is the total number of units to be assigned costs on the cost of production report for Department W?

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

Department S had 500 units 60% completed in process at the beginning of the period, 9,000 units completed during the period, and 600 units 30% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.

Which of the following costs incurred by a tool manufacturer would not be included in conversion costs?

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. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. Department 2 has transferred in costs of $390,000 for the current period. 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 $90,000. The journal entry to record the flow of costs into Department 3 during the period is