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Exam 17: Process Cost Systems

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Question 81

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If the products of a manufacturing process are produced to customer specifications, a process cost system is more appropriate than a job order cost system.

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B) False

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Question 82

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The cost per equivalent unit of direct materials and conversion in the Bottling Department of Mountain Springs Water Company is $0.45 and $0.12, respectively. The equivalent units to be assigned costs are as follows: The beginning work in process inventory had a cost of $2,200. Determine the cost of completed and transferred-out production, and the ending work in process inventory.

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Question 83

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Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.​ -The number of equivalent units of production for conversion costs for the period was

In a process costing system, costs flow into finished goods inventory only from the work in process inventory of the last manufacturing process.

Match each business that follows to the type of costing system (a or b) it would typically use. -Movie studio A)Job order costing B)Process costing

Custom-made goods would be accounted for using a process costing system.

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

If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900.

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 units at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 -Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period; 30,000 units of direct materials were added during the period; 32,000 units were completed during the period; and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was

The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is $27,225. The conversion cost for the period in the Bottling Department is $7,596. The total equivalent units for direct materials and conversion are 60,500 liters and 63,300 liters, respectively. Determine the direct materials and conversion cost per equivalent unit. Round answers to nearest cent.

Match each phrase that follows with the term (a-h) it describes. -Prime costs A)Direct labor and factory overhead B)Direct labor and direct materials C)Transferred-in costs D)Equivalent units E)Process costing F)Job order costing G)First-in, first-out method H)Cost of production report

Match each phrase that follows with the term (a-e) it describes. -Measures the quantity of output of production relative to the inputs A)Cost of production report B)Equivalent units of production C)First-in, first-out (FIFO) method D)Last-in, first-out (LIFO) method E)Whole units F)Yield

If the principal products of a manufacturing process are identical, a process cost system is more appropriate than a job order cost system.

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,000 liters in beginning work in process inventory (30% complete). During the period 71,000 liters were completed. The ending work in process was 5,000 liters (70% completed). What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process?

Alexandra Company's Molding Department opened on July 1. During July, 70,000 units were completed and transferred out to the next department. On July 31, the 10,000 units that remained in inventory were 40% complete with respect to conversion costs and 100% complete with respect to materials.​ How many equivalent units of work did the Molding Department complete during July for materials and conversion costs?

The FIFO method of process costing is simpler than the weighted average method.

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: ​ -Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, the materials and conversion cost per unit (rounded to the nearest cent) , respectively, are

The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is $28,072. The conversion cost for the period in the Bottling Department is $10,275. The total equivalent units for direct materials and conversion are 63,800 and 68,500, respectively. Determine the direct materials and conversion cost per equivalent unit. Round answers to nearest cent.

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 direct materials costs is

Conversion costs are usually incurred evenly throughout a process.