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Exam 4: Process Costing

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Question 1

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Easy Incorporated uses the first-in, first-out 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 first-in, first-out 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 ending work in process inventory.d. Determine the cost of units transferred out of the department during the month.

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First-in, first-out methodUnits started and completed during the period = Units completed during the period - Units in beginning work in process inventory = 23,100 - 600 = 22,500a. 11eb6b8f_61f0_d2e0_bf83_456636238c40_TB8314_00 b. 11eb6b8f_61f0_d2e1_bf83_37fefade7197_TB8314_00 c. 11eb6b8f_61f0_d2e2_bf83_8f469ffd6f7d_TB8314_00 d. 11eb6b8f_61f0_d2e3_bf83_eb1a4a30820f_TB8314_00

Question 2

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Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 900 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,300 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.The cost per equivalent unit for materials for the month in the first processing department is closest to:

A) $19.19
B) $19.96
C) $20.75
D) $19.71

E) B) and C)
F) A) and B)

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Question 3

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Catoire Consultancy uses the direct method to allocate its service department costs to its operating departments. The company has two service departments, Information Technology and Administration, and two operating departments, Corporate Practice and Government Practice. Data concerning those departments follow: Information Technology Department costs are allocated on the basis of computers and Administration Department costs are allocated on the basis of employees. Required: Allocate the service department costs to the operating departments using the direct method.

Under the __________ method of allocating service department costs, services provided by service departments to other service departments are ignored and all service department costs are allocated directly to the operating departments.

Mccabe Corporation uses the weighted-average method in its process costing. The following data pertain to its Assembly Department for September. Required:Compute the equivalent units of production for both materials and conversion costs for the Assembly Department for September using the weighted-average method.

Whiston Corporation uses the weighted-average method in its process costing system. The following data were taken from the records of the first processing department for a recent month. Required:a. How many units were transferred to the next department during the month?b. What were the equivalent units of production for materials and for conversion costs for the month?c. What were the costs per equivalent unit of production for materials and for conversion costs for the month?d. What was the cost of the ending work in process inventory in the department at the end of the month?e. What was the cost of the units completed and transferred to the next department during the month?

Lorona Incorporated has provided the following data concerning the Assembly Department for the month of April. The company uses the weighted-average method in its process costing. During the month, 7,400 units were completed and transferred from the Assembly Department to the next department. Required:Determine the cost of ending work in process inventory and the cost of units transferred out of the department during April using the weighted-average method.

Hutchcroft Corporation uses the weighted-average method in its process costing. The following data concern the company's Assembly Department for the month of June. During the month, 6,200 units were completed and transferred from the Assembly Department to the next department. Required:Determine the cost of ending work in process inventory and the cost of units transferred out of the department during June using the weighted-average method.

Blondell Legal Services, Limited Liability Company, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Law and Corporate Law. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and Information Technology costs are allocated second on the basis of Personnel costs.In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Law Department is closest to:

Mullins Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The cost of a completed unit transferred out of the department is closest to: (Round equivalent units to the nearest whole number and round all other intermediate calculations to 2 decimal places.)

San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows: Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. San Juan Minerals does not distinguish between variable and fixed overhead costs.Assuming that San Juan Minerals allocates service department costs using the direct method, the total cost allocated from Maintenance to Processing would be closest to:

Maute Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to:

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:

Cadot Incorporated 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, determine the equivalent units of production for materials and conversion costs.

Crone Corporation uses the first-in, first-out method in its process costing system. The following data concern the company's Assembly Department for the month of August. Required:Determine the cost of ending work in process inventory and the cost of units transferred out of the department during August using the first-in, first-out method.

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs.The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,300 units. The costs and percentage completion of these units in beginning inventory were: A total of 10,300 units were started and 7,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.The cost per equivalent unit for materials for the month in the first processing department is closest to:

Any difference in the equivalent units calculated under the weighted-average and the first-in, first-out methods is due to the units in the ending work in process inventory.

Rauzman Corporation uses the first-in, first-out method in its process costing. The following data concern the company's Mixing Department for the month of August. Required:Compute the cost per equivalent unit for materials and conversion for the Mixing Department for August using the first-in, first-out method.

Which of the following types of companies would typically use process costing rather than job-order costing?