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Exam 20: Process Costing

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Question 71

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At the end of an accounting period,the costs assigned to a production department can be split into the cost of units fully completed and transferred out,and the cost of units partially completed and remaining in the Work-in-Process Inventory of that department.

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Question 72

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Joywell,Inc.has four processing departments and follows a process costing system.It incurred $150,000 in machinery depreciation and $60,000 in indirect costs that were paid in cash.Provide the journal entries to record these transactions.

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Question 73

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In a process costing system,equivalent units must be calculated separately for materials and conversion costs.

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the last units completed and sold.

In a process costing system,production costs are ________.

Under process costing,depreciation on plant machinery is debited to the respective department's Work-in-Process Inventory.

Selected production and cost data of Westgate Manufacturing Company follow for June: On June 30,the Mixing Department ending Work-in-Process Inventory was 80% complete for materials and 40% complete for conversion costs.The Finishing Department ending Work-in-Process Inventory was 75% complete for materials and 60% complete for conversion costs. Requirements: 1.Compute the equivalent units of production for direct materials and for conversion costs for the Mixing Department. 2.Compute the equivalent units of production for transferred in costs,direct materials,and conversion costs for the Finishing Department.

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

Gatherer,Inc.uses a process costing system.It prepares a production cost report for each processing department.How will the managers of Gatherer use these production cost reports to prepare the balance sheet at the end of an accounting period?

The four-steps of tracking product costs in a process costing system are ________.

Direct labor costs are accumulated in the Manufacturing Overhead account.

Peterson Enterprises manufactures picture frames.Its production operations are divided into two departments - Assembly and Finishing.The company uses a process costing system.Peterson incurred the following costs during the year to produce 5,600 picture frames: If Peterson can only sell 5,800 picture frames during the year,what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent. )

PM Manufacturing produces a chemical pesticide 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,37,000 fl.oz.of chemicals were started in production.Of these,30,000 fl.oz.were completed,and 7,000 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.The weighted-average method is used. At the end of the month,PM calculated equivalent units in the Mixing Department as shown below: * Percent complete for direct materials costs: 100% Percent complete of completion for conversion costs: 60% During January,the Mixing Department incurred $50,000 in direct materials costs and $213,400 in conversion costs.How much was the cost per equivalent unit for materials and for conversion costs? (Use the weighted average method and round your answer to the nearest cent. )

In a production cost report,the number of total units to account for consists of ________.The weighted-average method is used.

Winnie,Inc.has two processes-Coloring Department and Mixing Department.The company assigned $300,000 to the 3,500 gallons of paint transferred from Mixing Department to Finished Goods Inventory.The journal entry to record completion of processing is ________.

Production cost reports prepared using the first-in,first-out (FIFO)method determine the cost of equivalent units of production by accounting for beginning inventory costs separately from current period costs.

Gravity Manufacturing produces a chemical pesticide 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,47,000 fl.oz.of chemicals were started in production.Of these,38,000 fl.oz.were completed,and 9,000 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.The weighted-average method is used. At the end of January,the equivalent unit data for the Mixing Department were as follows: * Percent complete for conversion costs: 40% In addition to the above,the costs per equivalent unit were $1.51 for direct materials and $5.00 for conversion costs.Using this data,calculate the cost of the units that were transferred out of the Mixing Department and into the Refining Department.

The number of equivalent units for direct materials and conversion costs must always be equal.

Which of the following best describes the term equivalent units?

What are conversion costs? In determining equivalent units of production,why are conversion costs calculated separately from direct materials?