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Exam 17: Process Cost Systems

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Question 51

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Information for the Nichols Manufacturing Company for the month of May is as follows: ​ ​ Prepare a cost of production report for the month of May,using the FIFO method.

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​ (a)240 × $3.80 (...

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Question 52

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What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory,assuming that the first-in,first-out method is used to cost inventories?

A) 68,000 units
B) 70,400 units
C) 66,200 units
D) 4,200 units

E) A) and B)
F) A) and C)

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Question 53

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The cost per equivalent units of direct materials and conversion in the Bottling Department of Beverages on Jolt Company is $0.47 and $0.15,respectively.The equivalent units to be assigned costs are as follows. ​ The beginning work in process inventory had a cost of $3,500.Determine the cost of completed and transferred out production,and the ending work in process inventory.

The following production data were taken from the records of the finishing department for June: ​ ​ Determine the number of equivalent units of production in the June 30,finishing department inventory,assuming that the first-in,first-out method is used to cost inventories.The completion percentage of 25% applies to both direct materials and conversion costs.

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

Which of the following best describes the effect on direct labor when management adopts a lean manufacturing environment?

If 16,000 units of materials enter production during the first year of operations,12,000 of the units are finished,and 4,000 are 75% completed,the number of equivalent units of production would be 15,000.

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: ​ 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

The number of equivalent units of production for the period for materials if the average cost method is used to cost inventories was

Process cost systems use job order cost cards to accumulate cost data.

At the beginning of the period,there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs.During the period,4,500 units were started and completed.Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs.Assume that the company uses the FIFO process cost method.Round cost per unit figures to two cents,i.e.,$2.22,when calculating total costs. ​ The total costs that will be transferred into Finished Goods for units started and completed were

In a just-in-time system,processing functions are combined into work centers,sometimes called departments.

Which of the following is not a characteristic of a process cost system?

Everett Company's inventory at December 31,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.Of the 10,000 units entering the department,all were completed except 1,200 units which were 25% completed as to conversion costs.Inventories are costed by the first-in,first-out method. Prepare a cost of production report for December.

Lean manufacturing attempts to significantly reduce

Costs are transferred,along with the units,from one work in process inventory account to the next in a process costing system.

One of the differences in accounting for a process costing system compared to a job order system is that the amounts used to transfer goods from one department to the next comes from the cost of production report instead of job cost cards.

Conversion costs include materials,direct labor,and factory overhead.

The Bottling Department of Mountain Springs Water Company had 5,000 liters in beginning work in process inventory (20% complete).During the period,58,000 liters were completed.The ending work in process inventory was 3,000 liters (90% complete).What are the equivalent units for conversion costs under the FIFO method?