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Exam 3: Process Cost Systems

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Question 71

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The following unit data were assembled for the assembly process of the 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) All of the above
F) C) and D)

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Question 72

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Yield measures the ratio of the materials output quantity to the materials input quantity.

A) True
B) False

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Question 73

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The direct labor costs and factory overhead costs incurred by a production department are referred to as conversion costs.

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: All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to four decimal places) ?

Which of the following businesses would normally use job order costing systems and which would normally use process costing systems? Tax consultant Paint manufacturer Nail manufacturer Videographer Lotions and cosmetics manufacturer Web design

The Blue Lake Water Company has two departments, Purifying and Bottling. The Bottling Department received 76,000 liters from the Purifying Department. During the period, the Bottling Department completed 74,000 liters, including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How many liters were started and completed during the period?

Describe the flow of materials in a process cost accounting system.

Carmelita Inc., has the following information available: 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:

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 $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for direct materials is

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the number of equivalent units of conversion costs was:

The FIFO method of process costing is simpler than the Average cost method.

Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of $7,000. During the period, 4,000 units of direct materials were added at a cost of $8,200, and 4,500 units were completed. At the end of the period, 500 units were 40% completed. All materials are added at the beginning of the process. Direct labor was $28,700 and factory overhead was $4,510. The cost of the 500 units in process at the end of the period if the first-in, first-out method is used to cost inventories was

In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred was $84,000, and applied factory overhead was $45,500. What is the total conversion cost?

Eagle Co. manufactures bentwood chairs and tables.  Wood for both products is steam-bent in the same process, but different types of wood are used for each product.  Thus, materials cost is identified separately to each product.  One production cycle uses 20 board feet.  Labor cost is identified to the process as a whole, as is overhead cost.  Data for the month of July follow: (a) Compute July's predetermined rate for the steam-bending process (b) Compute July's direct material costs for chairs and tables (c) Compute conversion costs to be applied to chairs and tables in July (d) Journalize the following entries: (1) Assignment of direct materials to chairs and tables (2) Application of conversion costs to chairs and tables (3) The transfer of completed chairs and tables to the Finishing Department. All of July's production was completed in July.

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% 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. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was

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.

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, what is the equivalent units for materials and conversion costs, respectively?

The cost of production report reports the cost of the goods sold.

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 $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 2 during the period for direct materials is