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Exam 3: Process Costing

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Question 21

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Middle Co.uses process costing to account for the production of chocolate candy bars.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Cost per equivalent unit has been calculated to be $4.00 for conversion costs and $3.00 for materials.3,000 units were in beginning inventory (100% complete for materials,80% for conversion) .12,000 units were started and completed during the period.Ending inventory still in process was 6,000 units (100% complete for materials,40% for conversion) .The value of ending inventory using the FIFO method would be:

A) $27,600.00
B) $34,699.80
C) $47,899.80
D) $97,500.00

E) C) and D)
F) B) and D)

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Question 22

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For a firm that uses process costing,calculating equivalent units makes it possible to fulfill which of the following requirements of GAAP?

A) Assigning an appropriate value to assets
B) Assigning an appropriate value to liabilities
C) Expensing period costs as they are incurred
D) Recognizing revenue when it is realized or realizable

E) A) and C)
F) None of the above

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Question 23

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Frost,Inc.is a service firm that uses process costing.The firm worked on a total of 1,600 cases this month,800 of which were completed during the period.The remaining cases were 40% complete.The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period,and had $4,800 in direct labor and manufacturing costs in beginning inventory.Using the weighted average method,what was the cost per equivalent unit?

James Co.uses process costing to account for the production of bottled energy drinks.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Equivalent units have been calculated to be 10,000 units for materials and 9,000 units for conversion costs.Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs.April costs were $36,000 for materials and $41,000 for conversion costs.Ending inventory still in process was 4,000 units (100% complete for materials,75% for conversion) .The value of units in ending inventory using the weighted average method would be closest to:

The journal entry to record the completion of goods includes:

Kenney Co.uses process costing to account for the production of canned energy drinks.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs.Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs.April costs were $57,600 for materials and $64,000 for conversion costs.Ending inventory still in process was 6,400 units (100% complete for materials,50% for conversion) .The cost per equivalent unit for materials using the weighted average method would be closest to:

Kenney Co.uses process costing to account for the production of canned energy drinks.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs.Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs.April costs were $57,600 for materials and $64,000 for conversion costs.Ending inventory still in process was 6,400 units (100% complete for materials,50% for conversion) .The total cost per unit using the weighted average method would be closest to:

The production report includes information about the number of physical units,plus ________ equivalent units.

Which of the following statements is correct with respect to the differences between using the weighted-average method or the FIFO method of preparing a process production report?

Swan Corp.began work on 3,000 units this period.Work in Process Inventory was 500 at the beginning of the period (60% complete)and 1,000 at the end of the period (50% complete).Beginning inventory costs were $3,000 for conversion costs and $7,000 for direct materials.During the period,Swan incurred $75,000 for conversion costs and $52,500 for direct materials.Swan uses the weighted average method of process costing.Direct materials are added at the beginning of the process,and conversion costs are incurred evenly throughout the period. Required: Using the weighted average method: a.How many units were completed during the period? b.Determine the number of equivalent units for direct materials. c.Determine the number of equivalent units for conversion costs. d.Calculate the cost per equivalent unit for direct materials. e.Determine the cost per equivalent unit for conversion costs.

The journal entry to record the purchase of direct materials for cash includes:

For a process costing firm,one could calculate the cost of beginning inventory in which of the following ways?

Physical units multiplied by the percentage of completion yields:

Livingston Co.uses process costing to account for the production of elastic bands.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs.April costs were $72,000 for materials and $80,000 for conversion costs.During April 8,000 units were completed.Ending work in process inventory was 4,000 units (100% complete for materials,50% for conversion) .The total cost per unit using the weighted average method would be:

To reconcile the total cost of Work in Process Inventory,account for:

Rathburn,Inc.is a service firm that uses process costing.The firm worked on a total of 1,000 cases this month,800 of which were completed during the period.The remaining cases were 40% complete.The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period,and had $4,800 in direct labor and manufacturing costs in beginning inventory.Using the weighted average method,what was the total cost of cases completed during the period?

The journal entry to record the issuance of direct materials into production includes:

A major difference between job order costing and process costing is the treatment of nonmanufacturing costs.

For units that are completed and transferred out in a firm that uses the weighted average method of process costing:

Which of the following is not used in the calculation of cost per equivalent unit?