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Exam 4: Systems Design: Process Costing

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Question 71

True/False

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In process costing,costs are accumulated in processing departments,rather than by job.

A) True
B) False

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Question 72

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Using the weighted-average method,the cost per equivalent unit of materials for May is closest to which of the following?

A) $4.12.
B) $4.50.
C) $4.60.
D) $5.03.

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

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Question 73

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What was the cost of the work-in-process inventory in the Finishing Department at the end of May?

The Morgan Company uses the weighted-average method in its process costing system.For a particular department,the company had 54,000 equivalent units of production with respect to conversion costs in March.There were 7,500 units in the department's beginning work-in-process inventory,two-thirds complete with respect to conversion costs.During March,52,500 units were started and 50,000 were completed and transferred out of the department.What was the ending work-in-process inventory in the department?

Carver Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department for a recent month: Required: Using the weighted-average method, determine the equivalent units of production for materials and conversion costs by compiling the "Quantity Schedule and Equivalent Units" portion of the production report.

(Appendix 4B)Delta Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Cutting,Milling,and Assembly.Delta allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours.Budgeted operating data for the year just completed follow: Required: a) Prepare a schedule to allocate Service Department costs to the Production Departments by the direct method, rounding all dollar amounts to the nearest whole dollar. b) Prepare a schedule to allocate Service Department costs to the Production Departments by the step-down method, allocating Custodial Services first, and rounding all amounts to the nearest whole dollar

Job-costing systems tend to produce more accurate product cost information compared to process costing systems.On the other hand they also tend to be more costly systems than processing costing systems. Required: Comment on the two observations.

(Appendix 4A)Production and cost data for the month of February for Process A of the Packer Manufacturing Company were as follows: The company uses the FIFO cost method in its process costing system. Required: a) Calculate the equivalent units and unit costs for February for materials and conversion costs. b) Determine the cost transferred to finished goods. c) Determine the amount of cost that should be assigned to the ending work-in-process and finished goods inventories.

(Appendix 4A) Garson Company uses the FIFO method in its process costing system.The Grinding Department started the month with 18,000 units in its beginning work-in-process inventory; 10% of the units were complete with respect to conversion costs.During the month,an additional 98,000 units were transferred in from the preceding department to begin processing in the Grinding Department.During the month,115,000 units were completed in the Grinding Department and transferred to the next processing department.Of the 1,000 units in the ending work-in-process inventory of the Grinding Department,20% were complete with respect to conversion costs.What were the equivalent units of production for conversion costs in the Grinding Department for the month?

(Appendix 4B) What would be the amount of Maintenance Department cost allocated to the Accounting Department?

(Appendix 4B) Boa Corp.uses the direct method to allocate service department overhead costs to operating departments.Information for the month of June follows: What would be the amount of maintenance department costs allocated to Operating Department A for June?

Assuming that Cherrington Company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for May,rounded to the nearest cent?

(Appendix 4A)Sharp Company has a process costing system.The following data relate to the company's Mixing Department for a recent month: All materials are added at the beginning of the mixing process. Required: a) (Appendix 4A) Compute the equivalent units of production for materials using the FIFO method. b) (Appendix 4A) Compute the equivalent units of production for conversion using the FIFO method. c) Compute the equivalent units of production for materials using the weighted-average method. d) Compute the equivalent units of production for conversion using the weighted-average method.

(Appendix 4A) Herston Company uses the FIFO method in its process costing system.The beginning work-in-process inventory in a particular department consisted of 6,000 units,two-thirds complete with respect to conversion costs.During the month,42,000 units were started and 40,000 units were completed and transferred out of the department.The company had 40,000 equivalent units of production for conversion costs.Which of the following represents the ending work-in-process inventory in the department?

(Appendix 4A)Darver Inc.uses the FIFO method in its process costing system.The following data concern the operations of the company's first processing department for a recent month: Required: Prepare a production report for the department using the FIFO method.

Baker Company uses the weighted-average method in its process costing system.The Assembly Department started the month with 8,000 units in its beginning work-in-process inventory that were 90% complete with respect to conversion costs.An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department.There were 11,000 units in the ending work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?

Lucas Company uses the weighted-average method in its process costing system.The company adds materials at the beginning of the process in the Forming Department,which is the first of two stages in its production process.Information concerning operations in the Forming Department in October follows: What was the materials cost of work in process on October 31?

(Appendix 4A) Assuming that Tru-Colour Paint Company uses the FIFO method,what are the equivalent units of production for conversion costs?

Strap Company uses the weighted-average method in its process costing system.The company has only one processing department.The ending work-in-process inventory consists of 10,000 units,60% complete with respect to materials.The total dollar value of this inventory is $38,000.The costs per equivalent unit are $5.00 for materials and $4.00 for conversion costs for the period.With respect to conversion costs,what is the ending work-in-process inventory?

(Appendix 4B)The step method usually provides results that are a reasonable approximation of the results that the reciprocal method provide.