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Exam 18: Process Costing

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Question 21

Multiple Choice

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Which of the following is NOT a way in which managers use the production cost reports to make decisions for their companies?

A) evaluating performance
B) identifying the most profitable products
C) controlling period costs
D) preparing the financial statements

E) A) and B)
F) All of the above

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Question 22

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The Polishing Department of Gaura,Inc.had 18,000 units in process on June 1 and received 30,000 units from the Machining Department.What is the number of units to account for by the Polishing Department for June? The company uses the FIFO costing method.

A) 30,000 units
B) 18,000 units
C) 48,000 units
D) 12,000 units

E) C) and D)
F) A) and D)

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Question 23

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On September 30,the Sorting Department of Java Works had ending Work-in-Process Inventory of 30,000 units that was 46% complete for materials and 36% complete for conversion costs.The company uses the FIFO method.This means that for the beginning Work-in-Process Inventory,________% of the materials and ________% of conversion costs were added during October.

The Assembling Department of Origination Inc.had 10,000 units in process on December 1 and received 30,000 units from the Sewing Department.During the month,it completed 20,000 units and transferred them to the Packaging Department.Calculate the number of units accounted for by the Assembling Department for December.Prepare the production cost report for the Assembling Department for the units for the month of December.Use the FIFO method.

The Polishing Department of Silverworks,Inc.had 15,000 units in process on June 1 and received 25,000 units from the Machining Department.During the month,it completed 32,000 units and transferred them to the Packaging Department.Prepare the production cost report for the Polishing Department for the units for the month of June.(Use the first-in,first-out method.)

Conversion costs include ________.

Babette Manufacturing produces plastic toys and uses process costing.There are three processing departments-Assembling,Finishing,and Packaging.On January 1,the Finishing Department had 2000 units of partially processed product in production.During January,31,000 units were transferred in from the Assembling Department and 29,000 units were completed and transferred out.At the end of the month,4000 units of partially processed products remained in the Finishing Department.The weighted- average method is used.See additional details below. Finishing Department,ending balance at January 31 leercent completed for materials cost: $94\%$ Percent completed for conversion cost: $70 \%$ What was the number of equivalent units for the month of January,with respect to direct materials,for the Finishing Department?

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

The combined production costs from all departments for completed products are transferred to the Cost of Goods Sold account immediately after the completion of all production processes.The perpetual inventory system is used.

Coat-All Paint Company used a predetermined overhead allocation rate to allocate $80,000 and $50,000 of indirect costs to the Coloring Department and the Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.Process costing is used.

In a production cost report prepared under the FIFO method,equivalent units of production are NOT computed for ________.

During the month,Kimura Manufacturing incurred (not paid) $47,000 in direct labor costs in Department 1,$26,000 direct labor costs in Department 2,and $3500 of indirect labor costs.The summary journal entry to record these transactions includes a ________.Process costing is used.

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

The Polishing Department of Metalware Fixtures,Inc.had 20,000 units in process on June 1 and received 23,000 units from the Machining Department.During the month,it completed 31,000 units and transferred them to the Packaging Department and had 12,000 units in ending Work-in-Process Inventory.The company uses FIFO.Calculate the number of units accounted for by the Polishing Department for June.

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

Briton Inc.has two processes-Coloring Department and Mixing Department.Briton sold 350 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead cost incurred amounted to $150,000 at the end of the year.Record the necessary journal entries for the sale of goods and for adjustment of over- or underallocated manufacturing overhead at the end of the year.Briton uses the perpetual inventory system and process costing.

When finished products are sold,Sales Revenue is debited,and Cost of Goods Sold is credited.Process costing and the perpetual inventory system are used.

Under process costing,the unit cost of the completed units is less than the unit cost of the incomplete units.

A process costing system is generally used by companies that produce homogeneous products.

A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.