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Exam 6: Process Costing

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Question 81

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___________________ requires that units pass through one process before they can be worked on in the next process.

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Question 82

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Process costing is appropriate for companies providing services.

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Question 83

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Which type of costing system works best with a large number of homogeneous products?

Figure 6-2. The Bing Corporation produces a product that passes through two processes.During June,the first department transferred 60,000 units to the second department.The cost of the units transferred was $90,000.Materials are added uniformly in the second process.The following information was provided about the second department's operations during June: Refer to Figure 6-2.Units completed in the second department during June for Bing Corporation would be

Figure 6-3. Kelley Inc.,manufactures a product that passes through two processes: mixing and molding.All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for October follows: During October,32,000 units were completed and transferred to the molding department.The following costs were incurred by the mixing department during October: By October 31,3,000 units that were 75 percent complete remained in Mixing.Kelley uses the weighted average method. Refer to Figure 6-3.Kelley's total cost per equivalent unit of production would be

Different percentage completion figures for manufacturing inputs pose a problem for the calculation of equivalent units,unit cost,and valuation of ending work in process.

Information concerning Department A of Ali Company for the month of June is as follows: All materials are added at the beginning of the process.Using the first-in,first-out method,the equivalent units for materials would be:

The _____________________ provides an analysis of the physical flow of units.

Harley Company manufactures a product that passes through two processes.The following information is available for the first department for October. All materials are added at the beginning of the process. Beginning work in process consisted of 25,000 units that were 80 percent complete with respect to conversion. Ending work in process consisted of 15,000 units that were 40 percent complete with respect to conversion. During the month,90,000 units were started in process. Required:

Explain how nonuniform inputs and multiple departments affect process costing.

The cost information section of the production report has two major subdivisions: (1)costs to account for and (2)costs accounted for.

In process manufacturing,the manufacturing input categories include:

Star Inc.,manufactures a product that passes through two processes: mixing and packaging.All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for June follows: During June,100,000 units were completed and transferred to packaging. The following costs were incurred by the mixing department during June: At June 30,8,000 units that were 70 percent complete remained in the mixing department. Use the weighted average method,and round unit costs to two decimal places. Required:

Firms that have adopted a __________ approach try to reduce WIP inventories to very low levels. or or

The cost of units finished at the last (final) department will flow from work in process to:

Figure 6-6. The Martin Company uses the weighted average method.The beginning work in process consists of 6,000 units (100% completed as to materials and 50% complete as to conversion costs) .The number of units completed was 120,000.The ending work in process consists of 10,000 units (100% complete as to materials and 20% complete as to conversion costs) . Refer to Figure 6-6.Calculate the number of units started during the period.

The FIFO method is the only method used to calculate equivalent units in process costing.

_________________ works well whenever relatively homogeneous products pass through a series of processes and receives similar amounts of manufacturing costs.