Assignment 3 Process Costing

ASSIGNMENT 3 – PROCESS COSTING Part 1. THEORIES AND CONCEPTS 1. In a process costing system, overhead is allocated to departments before being applied to units of product. 2. In order to use process costing, the output of a processing department should be homogeneous. 3. In process costing, the same equivalent units figure is used for both materials and conversion costs. 4. The "costs to be accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the cost of ending work in process inventory. 5. The "costs accounted for" portion of the cost reconciliation report includes the cost of ending work in process inventory and the cost of units transferred out. 6. Process costing would be appropriate for each of the following except: A. custom furniture manufacturing. B. oil refining. C. grain milling. D. newsprint production. 7. Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: A. the same as the number of units put into production. B. less than the number of units put into production. C. the same as the number of units completed. D. less than the number of units completed. 8 Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be: A. the same as the units completed. B. less than the units completed. C. the same as the units started during the period. D. less than the units started during the period. 9. Equivalent-unit calculations are necessary to allocate manufacturing costs between:

A. units completed and ending work in process. B. beginning work in process and units completed. C. units sold and ending work in process. D. cost of goods manufactured and beginning work in process. E. cost of goods manufactured and cost of goods sold.

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PART II. APPLICATION OF CONCEPTS 10. Barrett Corporation had 6,500 units of work in process on April 1. During April, 19,100 units were completed and as of April 30, 5,100 units remained in production. How many units were started during April? A. 11,600. B. 17,700. C. 20,500. D. 30,700. E. None of these. 11. Lester Corporation had 8,200 units of work in process on November 1. During November, 26,800 units were started and as of November 30, 7,900 units remained in production. How many units were completed during November? A. 16,100. B. 26,500. C. 27,100. D. 42,800. E. None of these. 12. Xin Co., had 3,000 units of work in process on April 1 that were 60% complete. During April, 10,000 units were completed and as of April 30, 4,000 units that were 40% complete remained in production. How many units were started during April? A. 8,600. B. 9,800. C. 11,000. D. 12,200. E. None of these. 13. Unizat Corporation uses the weighted-average method in its process costing system. The

following information pertains to one of the company's processing departments for a recent month:

All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to: A. $0.86 B. $0.90 C. $1.10 D. $1.18

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14. Hanson Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $90,780. An additional 84,000 units were started into production during the month and 82,000 units were completed in the Welding Department and transferred to the next processing department. There were 19,000 units in the ending work in process inventory of the Welding Department that were 40% complete with respect to conversion costs. A total of $690,780 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs is closest to: A. $6.707 B. $8.224 C. $8.900 D. $8.723 15. Park Company 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 accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $40,484 and a total of $213,890 in conversion costs were incurred in the department during January. The cost per equivalent unit for conversion costs for January in the Molding Department is closest to: A. $4.823 B. $4.186 C. $4.650 D. $4.590

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16. Jam Company uses the weighted-average method in its process costing system. Operating data for the Painting Department for the month of April appear below:

What were the equivalent units for conversion costs in the Painting Department for April? A. 78,680 B. 77,500 C. 72,300 D. 81,280 17. Fauste Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 10,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 55,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 52,000 units were completed in the Assembly Department and transferred to the next processing department. There were 13,000 units in the ending work in process inventory of the Assembly Department that were 80% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month? A. 58,000 B. 55,400 C. 62,400 D. 52,000 18. Natraj Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below:

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What were the equivalent units for conversion costs in the Lubricating Department for October? A. 41,220 B. 38,400 C. 37,800 D. 41,520 19. Sala 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 $2.64. How much conversion cost was assigned to the units transferred out of the Fitting Department during March? A. $118,800.00 B. $131,472.00 C. $126,508.80 D. $143,616.00 20. Yimron Corporation uses the weighted-average method in its process costing system. Information for the month of March concerning Department A, the first stage of the company's production process, follows:

Materials are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. What cost would be recorded for the ending work in process inventory? A. $3,400 B. $1,700 C. $4,400 D. $2,200

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21. Tesla Corporation, which adds materials at the beginning of production, uses a weightedaverage process-costing system. Consider the data that follow.

The company's cost per equivalent unit for materials is: A. $1.24. B. $1.66. C. $1.67. D. $2.05. E. some other amount. 22. Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 40,000 units during the month and had 10,000 units in process at month-end, 20% complete. Conversion costs associated with the beginning work-in-process inventory amounted to $231,000, and amounts that relate to the current month totaled $966,000. If conversion is incurred uniformly throughout manufacturing, Peach's equivalent-unit cost is: A. $23.00. B. $23.94. C. $24.15. D. $28.50. E. some other amount. USE THE FOLLOWING INFORMATION TO ANSWER 23-24. Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs are incurred evenly throughout the process. The company's beginning and ending work-in-process inventories totaled 10,000 units and 15,000 units, respectively, with the latter units being 2/3 complete at the end of the period. Universal started 30,000 units into production and completed 25,000 units. Manufacturing costs follow. Beginning work in process: Materials, $60,000; conversion cost, $150,000 Current costs: Materials, $180,000; conversion cost, $480,000 23. Universal's equivalent-unit cost for materials is: A. $4.50. B. $6.00. C. $8.00. D. $9.60. E. some other amount.

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24. Universal's equivalent-unit cost for conversion cost is: A. $13.71. B. $18.00. C. $21.00. D. $25.20. E. some other amount. USE THE FOLLOWING INFORMATION TO ANSWER NUMBERS 25-30. Southern Lake Chemical manufactures a product called Zubek. Direct materials are added at the beginning of the process, and conversion activity occurs uniformly throughout production. The beginning work-in-process inventory is 60% complete with respect to conversion; the ending work-in-process inventory is 20% complete. The following data pertain to May:

25. Using the weighted-average method of process costing, the equivalent units of direct materials total: A. 68,000. B. 69,400. C. 74,000. D. 75,000. E. some other amount. 26. Using the weighted-average method of process costing, the equivalent units of conversion activity total: A. 60,400. B. 68,000. C. 69,400. D. 74,000. E. some other amount.

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27. Using the weighted-average method of process costing, the cost per unit of direct materials is: A. $1.17. B. $1.18. C. $1.20. D. $1.28. E. some other amount. 28. Using the weighted-average method of process costing, the cost per unit of conversion activity is: A. $2.50. B. $2.53. C. $2.70. D. $2.76. E. some other amount. 29. Using the weighted-average method of process costing, the cost of goods completed and transferred during May is: A. $249,560. B. $250,240. C. $258,400. D. $263,840. E. some other amount. 30. Using the weighted-average method of process costing, the total costs remaining in work in process on May 31 are: A. $0. B. $12,040. C. $17,480. D. $25,640. E. some other amount.

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CASE Marcellus Corporation, which uses the weighted-average method of process costing, reported the following as of February 1:

Conversations with the production supervisor revealed that materials are introduced at the start of the process and conversion cost is incurred evenly throughout manufacturing. The company started 29,000 units during the month. Goods in process at the beginning and end of February totaled 3,000 units and 5,000 units, respectively, the latter batch being 60% complete. Just prior to leaving on vacation, a trusted staff assistant was asked to compute the cost of February's ending work-in-process inventory. Her calculations showed a huge rise in unit cost when compared with the February 1 figures, soaring to $250 [($470,000 + $280,000)  3,000 units (5,000 units  60%)]. Required: A. Did the staff assistant make any errors in her calculations? Explain. B. Analyze the company's production volume and determine the proper equivalent-unit figures for February. C. Calculate the proper unit costs for February. D. Calculate the cost of the February 28 work-in-process inventory. ===============================END==================================

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