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Exam 4: Process Costing

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Question 131

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Koehl Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Wholesaling. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. The total Wholesaling Department cost after the allocations of service department costs is closest to:

A) $403,990
B) $396,430
C) $403,642
D) $402,601

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Question 132

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Bims Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 2,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 61,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

A) 45,000
B) 77,000
C) 54,400
D) 55,800

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Question 133

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Seidell Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied.The total Customer Solutions Department cost after the allocations of service department costs is closest to:

In February, one of the processing departments at Encinias Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $21,000. During the month, $316,000 of costs were added to production and the cost of units transferred out from the department was $322,000.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 February.

Jahncke Incorporated uses the weighted-average method in its process costing. The following data concern the company's Assembly Department for the month of November. Required:Compute the costs per equivalent unit for the Assembly Department for November. (Round your answers to 2 decimal places.)

Rauzman Corporation uses the first-in, first-out method in its process costing. The following data concern the company's Mixing Department for the month of August. Required:Compute the cost per equivalent unit for materials and conversion for the Mixing Department for August using the first-in, first-out method. (Round your final answers to 2 decimal places.)

In both the direct and step-down methods of allocating service department costs, any amount of the allocation base that is attributable to the service department whose cost is being allocated is ignored.

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,700 units were started and 6,600 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 70% complete with respect to materials and 10% complete with respect to conversion costs.The cost per equivalent unit for materials for the month in the first processing department is closest to:

The following data have been provided by Corby Corporation for the Circuit Prep Department. The company uses the first-in, first-out method in its process costing. Required:Determine the equivalent units of production for the Circuit Prep Department for August using the first-in, first-out method.

The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.

In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $21,000 and ending work in process inventory of $27,000. During the month, $244,000 of costs were added to production and the cost of units transferred out from the department was $238,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:

Raider Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. The Molding Department's cost per equivalent unit for conversion cost for January was $3.19. How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

Which of the following journal entries would be used to record direct labor costs in a company having two processing departments (Department A and Department B) ?

Haffner Corporation uses the weighted-average 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:

A number of companies in different industries are listed below:1. Electric utility2. Frozen orange juice processor3. Specialty coffee roaster (roasts small batches of specialty coffee beans)4. Natural gas production company5. Commercial photographer6. Contract oil drilling companyRequired:For each company, indicate whether the company is most likely to use job-order costing or process costing.

Sumptuous Beer Corporation manufactures beer in two departments, Fermenting and Bottling. In the Fermenting Department, ingredients are placed in a large vat and fermented for three days. The beer is then transferred over to Bottling where it is further purified and bottled. Sumptuous uses a first-in, first-out process cost system to collect costs in both departments. On May 1, the Fermenting Department had 32,000 gallons (units) in process. These gallons were 100% complete with respect to materials (ingredients) and 80% complete with respect to conversion cost. During May, Fermenting started an additional 460,000 gallons into production. On May 31, Fermenting had 18,000 gallons in work in process. These gallons were 100% complete with respect to materials and 60% complete with respect to conversion cost.What are the Fermenting Department's equivalent units (gallons) of production related to materials for May?

Bayas Corporation uses process costing. A number of transactions that occurred in June are listed below.(1) Raw materials that cost $39,800 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials.(2) Direct labor costs of $16,100 are incurred, but not yet paid, in the Mixing Department.(3) Manufacturing overhead of $45,700 is applied in the Mixing Department using the department's predetermined overhead rate.(4) Units with a carrying cost of $87,600 finish processing in the Mixing Department and are transferred to the Drying Department for further processing.(5) Units with a carrying cost of $111,300 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse.(6) Finished goods with a carrying cost of $98,200 are sold.Required:Prepare journal entries for each of the transactions listed above.

The Assembly Department started the month with 24,000 units in its beginning work in process inventory. An additional 309,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?

Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 20,500 units, 100% complete with respect to materials cost and 30% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $26,200. A total of 58,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $2.10 for materials and $3.80 for conversion costs. The total cost of the units completed and transferred out of the department was:

Saada Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March. The Fitting Department's cost per equivalent unit for conversion cost for March was $6.00. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?