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Exam 20: Process Cost Systems

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Question 51

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Conversion costs are generally added evenly throughout the process.

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Question 52

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Use this information about the Finishing Department to answer the questions that follow. ​ The following production data were taken from the records of the Finishing Department for June: ​ ​ -What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories?

A) 68,000 units
B) 70,400 units
C) 66,200 units
D) 4,200 units

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Question 53

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Match each phrase that follows with the term (a-h) it describes. -Summary of the activity in a processing department for a specific period

The cost of materials transferred into the Bottling Department of Mountain Springs Water Company is $32,400, with $26,000 from the Purifying Department, plus an additional $6,400 from the materials storeroom. The conversion cost for the period in the Bottling Department is $8,750 ($3,750 factory applied and $5,000 direct labor). The total cost transferred to finished goods for the period was $31,980. The Bottling Department had a beginning inventory of $1,860. (a)Journalize the cost of transferred-in materials, conversion costs, and the cost transferred out to finished goods. (b)Determine the balance of Work in Process-Bottling at the end of the period.

Match each business that follows to the type of costing system (a or b) it would typically use. -Paper manufacturer

In a process cost system, product costs are accumulated by processing department rather than by job.

Which of the following is not included in conversion costs?

If the costs of direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.

Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period.

On March 1, Upton Company's Packaging Department had work in process inventory of 8,820 units, which had been transferred in from the Finishing Department. These units had accumulated costs of $315,000 in previous departments and $16,000 for conversion costs in the Packaging Department.During March, 30,000 units were transferred into the department. These units had accumulated costs of $770,000 in the previous departments. The Packaging Department incurred $54,000 in conversion costs during the month. On March 31, 700 units remained in ending inventory. These units were 80% complete with respect to conversion costs.​Calculate the cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using the average cost method. Rounded to the nearest cent.

The journal entry to record the flow of costs into Department 2 for direct labor is

Use this information about Carmelita Inc. to answer the questions that follow. ​ Carmelita Inc. has the following information available: ​ ​ $\begin{array} { | l | r | r | } \hline & \text { Costs from Beginning Inventory } & \text { Costs from Current Period } \\\hline \text { Direct materials } & \$ 2,000 & \$ 22,252 \\\hline \text { Conversion costs } & 6,200 & 150,536 \\\hline\end{array}$ ​ -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 the nearest cent when calculating total costs.?The total costs transferred into Finished Goods for units started and completed were

Zang Co. manufactures its products in a continuous process involving two departments, Machining and Assembly. Prepare journal entries to record the following transactions related to production during June: (a)Materials purchased on account, $180,000. (b)Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials; Assembly, $4,900 indirect materials. (c)Direct labor used by Machining, $23,000; Assembly, $47,000. (d)Depreciation expenses: Machining, $4,500; Assembly, $7,800. (e)Factory overhead applied: Machining, $9,700; Assembly, $11,300. (f)Machining Department transferred $98,300 to Assembly Department; Assembly Department transferred $83,400 to finished goods. (g)Sold goods on account, $100,000; cost of goods sold, $68,000.

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

Costs of ending work in process inventory are included in the cost per equivalent unit computation.

The journal entry to record the flow of costs into Department 1 during the period for applied overhead is

Match each phrase that follows with the term (a-e) it describes. -Focuses on reducing time, cost, and poor quality within the process

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.

The journal entry to record the flow of costs from Department 1 into Department 2 is

In a process costing system, the cost per equivalent unit is computed before computing equivalent units.