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Exam 5: Process Costing6 Cost-Volume-Profit Relationships

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Question 21

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During August, the following transactions were recorded at Goyer Corporation.The company uses process costing. (1) Raw materials that cost $24,500 are withdrawn from the storeroom for use in the Assembly Department. All of these raw materials are classified as direct materials. (2) Direct labor costs of $29,000 are incurred, but not yet paid, in the Assembly Department. (3) Manufacturing overhead of $58,900 is applied in the Assembly Department using the department’s predetermined overhead rate. (4) Units with a carrying cost of $101,200 finish processing in the Assembly Department and are transferred to the Painting Department for further processing. (5) Units with a carrying cost of $106,100 finish processing in the Painting Department, the final step in the production process, and are transferred to the finished goods warehouse. (6) Finished goods with a carrying cost of $95,100 are sold. Required: Prepare journal entries for each of the transactions listed above.

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Question 22

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Carrington Corporation produces canned vegetable soup.The company uses the weighted-average method in its process costing system.The company sold 300,000 units in January.Data concerning inventories follow: What were the equivalent units for conversion costs for January?

A) 285,000 units.
B) 303,000 units
C) 300,000 units
D) 309,000 units

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

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Question 23

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In the department's cost reconciliation report for August, the cost of units transferred out of the department would be:

Jared Beverage Corporation uses a process costing system to collect costs related to the production of its celery flavored cola.The cola is first processed in a Mixing Department and is then transferred out and finished up in the Bottling Department.The finished cases of cola are then transferred to Finished Goods Inventory.The following information relates to the company's two departments for the month of January: How many cases of cola were completed and transferred to Finished Goods Inventory during January?

The cost per equivalent unit for materials for the month in the first processing department is closest to:

In a process costing system, manufacturing overhead cost is also called conversion cost.

Jersey Corporation has a process costing system in which it uses the weighted-average method.The equivalent units for conversion costs for the month were 47,500 units.The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs.The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs.The number of units started during the month was:

Lap Corporation uses the weighted-average method in its process costing system.The beginning work in process inventory in a particular department consisted of 80,000 units, 100% complete with respect to materials and 25% complete with respect to conversion costs.The total dollar value of this inventory was $226,000.During the month, 150,000 units were transferred out of the department.The costs per equivalent unit for the month were $2.00 for materials and $3.50 for conversion costs.The cost of the units completed and transferred out of the department was:

How many dolls were started in the Molding Department during January?

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000.During the month, the cost of units transferred out from the department was $148,000.In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:

Walbin Corporation uses the weighted-average method in its process costing system.The beginning work in process inventory in a particular department consisted of 12,000 units, 100% complete with respect to materials cost and 20% complete with respect to conversion costs.The total cost in the beginning work in process inventory was $39,400.A total of 42,000 units were transferred out of the department during the month.The costs per equivalent unit were computed to be $2.40 for materials and $4.50 for conversion costs.The total cost of the units completed and transferred out of the department was:

In August, one of the processing departments at Khatak Corporation had beginning work in process inventory of $34,000 and ending work in process inventory of $30,000.During the month, the cost of units transferred out from the department was $374,000. Required: Construct a cost reconciliation report for the department for the month of August.

Bachelet Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department for a recent month. Required: Using the weighted-average method: a.Determine the equivalent units of production for materials and conversion costs. b.Determine the cost per equivalent unit for materials and conversion costs. c.Determine the cost of units transferred out of the department during the month. d.Determine the cost of ending work in process inventory in the department.

The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for".The "Costs accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the cost of units transferred out.

Process costing is employed in industries that produce basically homogeneous products such as bricks, flour, or cement but would not be appropriate for assembly-type operations such as those that manufacture computers.

The cost per equivalent unit for materials for the month in the first processing department is closest to:

What are the equivalent units for conversion costs for the month in the first processing department?

What are the Molding Department's equivalent units related to materials for January?

In calculating cost per equivalent unit under the weighted-average method, prior period costs are combined with current period costs.

Walker Enterprises, Inc., uses a job-order costing system and sets a predetermined overhead rate at the beginning of each year based on estimated manufacturing overhead costs and estimated direct labor-hours for the upcoming year. Required: If the company sets its prices to cover actual direct materials costs, actual direct labor costs, and applied manufacturing overhead costs, will the company at least avoid a loss during the year?