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Exam 4: Process Costing

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Question 41

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Ibarra Corporation uses the first-in, first-out method in its process costing system. The first processing department, the Forming Department, started the month with 16,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $19,250. An additional 97,000 units were started into production during the month and 100,000 units were completed and transferred to the next processing department. There were 13,000 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs. A total of $593,123 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

A) $6.100
B) $5.890
C) $5.422
D) $6.115

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

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Question 42

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Gaba Corporation uses the first-in, first-out method in its process costing system. The Grinding Department started the month with 17,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. An additional 60,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 70,000 units were completed in the Grinding Department and transferred to the next processing department. There were 7,000 units in the ending work in process inventory of the Grinding Department that were 10% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Grinding Department for the month?

A) 70,700
B) 60,500
C) 50,000
D) 70,000

E) A) and D)
F) B) and D)

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Question 43

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In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $42,000. During the month, $259,000 of costs were added to production and the cost of units transferred out from the department was $253,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: A total of 6,500 units were started and 5,900 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.What are the equivalent units for conversion costs for the month in the first processing department?

When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials.

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.

The James Corporation has four departments with data as follows: Maintenance Department costs are allocated on the basis of labor hours. The amount of cost allocated to Milling from Maintenance under the direct method would be:

Intask Corporation uses the first-in, first-out method in its process costing system. Beginning inventory in the mixing department consisted of 7,100 units that were 75% complete with respect to conversion costs. Ending work in process inventory consisted of 6,100 units that were 60% complete with respect to conversion costs. If 14,200 units were transferred to the next processing department during the period, the equivalent units of production for conversion cost would be:

Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Medicine and Geriatric Medicine. 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.The total Geriatric Medicine Department cost after allocations is closest to:

Ricardo Corporation uses the first-in, first-out method in its process costing system. During June, 36,000 units were completed in Department M. Of this total, 6,000 were in the beginning work in process and the remainder were started and completed during the month. The work in process at June 1 was 40% complete with respect to conversion costs. Materials are added at the beginning of the process. A total of 8,000 units were in work in process at June 30; these units were 80% complete with respect to conversion costs. The equivalent units of production for conversion costs for June is closest to:

Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to:

In May, one of the processing departments at Messerli Corporation had beginning work in process inventory of $14,000 and ending work in process inventory of $35,000. During the month, $148,000 of costs were added to production and the cost of units transferred out from the department was $127,000. The company uses the first-in, first-out method in its process costing system. In the department's cost reconciliation report for May, the total cost to be accounted for would be:

Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: Costs in the Personnel Department total $168,283 per year.Suppose the company uses the direct method of allocation. The amount of Personnel Department cost that would be allocated to Operating Department 2 would be closest to:

Details of the manufacturing activity in Amy Corporation's Assembly Department for the month of December is given below: All materials are added at the beginning of processing in the Assembly Department.The equivalent units for materials for the month, using the weighted-average method, is:

Gunes 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 8,500 units were started and 7,400 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 total cost transferred from the first processing department to the next processing department during the month 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 ending work in process inventory in the first processing department according to the company's cost system is closest to:

Kota Toy Corporation manufactures lizard dolls in two departments, Molding and Assembly. In the Molding Department, plastic is injected into a lizard-shaped mold. The dolls that come out of the molds are then transferred to the Assembly Department where hair is applied. Kota uses a weighted-average process cost system to collect costs in both departments.On January 1, the Molding Department had 4,000 dolls in process. These dolls were 100% complete with respect to direct materials and 70% complete with respect to conversion cost. During January, Molding completed 79,000 dolls. On January 31, Molding had 7,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 25% complete with respect to conversion cost.How many dolls were started in the Molding Department during January?

Mundes Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 2,000 units that were 60% complete with respect to materials and 40% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $8,800. During the period, 8,000 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $4.00 for material and $5.00 for conversion costs. The cost of units transferred out during the month was:

Equivalent units of production for a process costing system using the first-in, first-out method are equal 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 per equivalent unit for materials for the month in the first processing department is closest to: