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Exam 20: Process Costing

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Question 31

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Production cost reports prepared using the first-in,first-out (FIFO)method determine the cost of equivalent units of production by accounting for beginning inventory costs separately from current period costs.

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Question 32

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The Zakchari Company has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process,and materials are added at the beginning of each process.Data from August for the Recovery Department are as follows: $\begin{array} { | l | r | } \hline & \text { Metric Tons } \\\hline \text { Beginning Work-in-Process } & \\\text { Inventory } & 3,000 \\\hline \text { Transferred In } & 18,500 \\\hline \text { Ending Work-in-Process Inventory } & 6,500 \\\hline\end{array}$ In August,15,000 metric tons were completed and sent to the Packaging Department.The ending Work-in-Process Inventory was 50% complete with respect to conversion costs.Prepare a production cost report for the Recovery Department to show the equivalent units for direct materials and conversion costs.The weighted-average method is used.

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Zakchari Company.
Production Cost Report...

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Question 33

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In process costing,which of the following is recorded by debiting the Manufacturing Overhead account?

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.

Alchemy Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,56,000 fl.oz.of chemicals were started in production.Of these,30,000 fl.oz.were completed and 26,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly throughout the process.The weighted-average method is used. At the end of the month,Alchemy calculated equivalent units.The ending inventory in the Mixing Department was 75% complete with respect to conversion costs.With respect to direct materials,what is the number of equivalent units in the ending inventory?

Which of the following is an example of how managers use production cost reports to control costs?

Under a process costing system,product costs are accumulated with respect to jobs completed.

A cellular phone manufacturer is more likely to use a process costing system rather than job order costing.

A production cost report shows only the calculations for the physical flow of products.

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 first-in,first-out (FIFO) method creates better month-to-month cost comparisons than the weighted-average method ________.

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the last units completed and sold.

Carbamate Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2000 gallons of partially processed product in production.During January,31,000 gallons were transferred in from the Mixing Department,and 32,000 gallons were completed and transferred out.At the end of the month,1000 gallons of partially processed product remained in the Refining Department.The weighted-average method is used.See additional details below. Refining Department,ending balance at January 31 Percent completed for materials cost: $\quad 90 \%$ Percent completed for conversion cost: $\quad 76 \%$ What was the total number of equivalent units of production for conversion costs for the month of January for the Refining Department?

Garcia Manufacturing has two processes-Coloring and Mixing.The company assigned $390,000 to the 6000 gallons of paint transferred from Mixing Department to Finished Goods Inventory.The journal entry to record this assignment of cost is ________.

The Work-in-Process Inventory account of a department is credited when overallocation of manufacturing overhead occurs in that department.Process costing is used.

During the month,Barrera Manufacturing incurred (not paid) $45,000 in direct labor costs in Department 1,$22,000 direct labor costs in Department 2,and $3500 of indirect labor costs.Which of the following is NOT part of the summary journal entry to record these transactions? Process costing is used.

Thompson,Inc.purchased raw materials for $6,000 and $25,000 for cash and on account,respectively.Provide the journal entry to record the purchase of raw materials.Process costing is used.

Black Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials worth $38,000 purchased on account were assigned to Department I.At the end of the year,when the production cost report for Department I was prepared,Black Hills assigned $40,000 to the units transferred from Department I to Department II.The journal entry to record the transfer of units to Department II will ________.

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

Martinez Products manufactures a line of desk chairs.Martinez's production operations are divided into two departments - Department 1 and Department 2.The company uses a process costing system.Martinez incurred the following costs during the year to produce 25,700 chairs: $\begin{array} { | l | l | } \hline \text { Department 1 } & \$ 863,500 \\\hline \text { Department 2 } & \$ 287,000 \\\hline\end{array}$ If Martinez sells 22,600 chairs during the year,what will be the cost per chair produced? (Round your answer to two decimal places.)