CHAPTER 16A

PROCESS COSTING

CHAPTER LEARNING OBJECTIVES

1. Discuss the uses of a process cost system and how it compares to a job order cost system. Companies that mass-produce similar products in a continuous fashion use process cost systems. Once production begins, it continues until the finished product emerges. Each unit of finished product is indistinguishable from every other unit.

Job order cost systems are similar to process cost systems in three ways: (1) Both systems track the same cost elements—direct materials, direct labor, and manufacturing overhead. (2) Both accumulate cost in the same accounts—Raw Materials Inventory, Factory Labor, and Manufacturing Overhead. (3) Both assign accumulated costs to the same accounts—Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. However, the method of assigning costs differs significantly.

There are four main differences between the two cost systems: (1) A process cost system uses separate Work in Process accounts for each department or manufacturing process, rather than only one work in process account used in a job order cost system. (2) A process cost system summarizes costs in a production cost report for each department. A job order cost system charges costs to individual jobs and summarizes them in a job cost sheet. (3) Costs are totaled at the end of a time period in a process cost system, but at the completion of a job in a job cost system. (4) A process cost system calculates unit cost as: Total manufacturing costs for the period ÷ Equivalent units produced during the period. A job order cost system calculates unit cost as: Total cost per job ÷ Units produced.

2. Explain the flow of costs in a process cost system and how to record the assignment of manufacturing costs. A process cost system assigns manufacturing costs for raw materials, labor, and overhead to work in process accounts for various departments or manufacturing processes. It transfers the costs of partially completed units from one department to another as those units move through the manufacturing process. The system transfers the costs of completed work to Finished Goods Inventory. Finally, when inventory is sold, the system transfers the costs to Cost of Goods Sold.

To assign the costs of raw materials, labor, and overhead, decrease Raw Materials Inventory, Factory Labor, and Manufacturing Overhead, and increase Work in Process Inventory for each department. To record the cost of goods transferred to another department, decrease Work in Process for the department whose work is finished and increase Work in Process Inventory for the department to which the goods are transferred. To record units completed and transferred out to the warehouse, decrease Work in Process Inventory for the department whose work is finished and increase Finished Goods Inventory. To record the sale of goods, decrease Finished Goods Inventory and increase Cost of Goods Sold.

3. Compute equivalent units. Equivalent units of production measure work done during a period, expressed in fully completed units. Companies use this measure to determine the cost per unit of completed product. Under the weighted-average method, equivalent units are the sum of units completed and transferred out plus equivalent units of ending work in process.

4. Complete the four steps to prepare a production cost report. The four steps to complete a production cost report are as follows.(1) Compute the physical unit flow—that is, the total units to be accounted for. (2) Compute the equivalent units of production separately for direct materials and conversion costs. (3) Compute the unit production costs, expressed in terms of equivalent units of production. (4) Prepare a cost reconciliation schedule, which shows that the total costs accounted for equals the total costs to be accounted for.

The production cost report contains both quantity and cost data for a production department. There are four sections in the report: (1) number of physical units, (2) equivalent units determination, (3) unit costs, and (4) cost reconciliation schedule.

^a5. Compute equivalent units using the FIFO method. Equivalent units under the FIFO method are the sum of the work performed to (1) finish the units of beginning work in process inventory, if any; (2) complete the units started into production during the period; and (3) start, but only partially complete, the units in ending work in process inventory.

TRUE-FALSE STATEMENTS

1. Process cost systems focus on the process involved in mass-producing products that are very similar in nature.

2. Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine.

3. A company that produces YouTube videos would likely use a process cost system.

4. In a process cost system, costs are tracked through a series of connected manufacturing processes or departments rather than by individual jobs.

5. In a process cost system, total costs are determined at the end of a month or year.

6. Separate work in process inventory accounts are maintained for each production department or manufacturing process in a process cost system.

7. In a process cost system, direct materials, direct labor, and manufacturing overhead are only added in the first production department.

8. The assignment of the three manufacturing cost elements to Work in Process Inventory in a process cost system is the same as in a job order cost system.

9. Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

10. In a process cost system, labor costs incurred may be captured on time tickets.

11. A primary driver of overhead costs in continuous manufacturing operations is machine time used.

12. Equivalent units of production are used to determine the cost per unit of completed products.

13. Equivalent units of production measure the work done during a period, expressed in fully completed units.

14. Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process inventory.

15. The weighted-average method of computing equivalent units is a commonly used method in practice.

16. There are no units in process at the beginning of the period, 1,500 units in process at the end of the period that are 40% complete, and 15,000 units completed and transferred out during the period. Based on this information, there were 14,400 equivalent units of production during the period.

17. The first step performed in preparing a production cost report is computing the equivalent units of production.

18. Equivalent units of production must be calculated before the unit production costs can be computed.

19. The physical units in a department are another name for the equivalent units of production.

20. Unit material cost is computed by taking total material costs added to the department for the period and dividing it by the physical units in the process during the period.

21. When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing.

22. The total manufacturing cost per unit is used in costing the units completed and transferred out during the period.

23. A production cost report is an internal document for management that shows production quantity and cost data for a particular job.

24. Production cost reports provide a basis for evaluating the productivity of a department.

25. Companies often use a combination of a process cost and a job order cost system, called operations costing.

^a26. The FIFO method of calculating equivalent units is easier to understand and use than the weighted-average method.

^a27. The FIFO method of calculating equivalent units is conceptually superior to the weighted- average method.

^a28. When comparing the FIFO with the weighted-average method of calculating equivalent units, the FIFO method provides more current cost information.

^a29. There are no units in ending Work in Process Inventory at the end of the period under the FIFO method of calculating equivalent units.

^a30. Companies using the weighted-average method to calculate equivalent units do not complete units left over from the previous accounting periods, they start new units.

31. In continuous process manufacturing, generally once the production begins, it continues until the finished product emerges.

32. One similarity of process cost systems and job order cost systems is that both determine total manufacturing costs after each job.

33. The flow of costs in a process cost system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department.

34. When finished goods are sold, cost of goods sold is recorded as an increase to Finished Goods Inventory and a decrease to Cost of Goods Sold.

35. When there is no beginning Work in Process Inventory and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

36. In order to compute the physical unit flow, a company must first compute unit production costs.

^a37. Under the FIFO method of computing equivalent units, it is assumed that the beginning Work in Process Inventory is completed before new work is started.

MULTIPLE CHOICE QUESTIONS

38. A process cost system is most appropriate when

a. a variety of different products are produced, each one requiring different types of materials, labor, and overhead.

b. the focus of attention is on a particular job or order.

c. similar products are mass-produced.

d. individual products are custom made to the specification of customers.

39. A characteristic of products that are mass-produced in a continuous fashion is that

a. the products are identical or very similar in nature.

b. they are grouped in batches.

c. they are produced at the time an order is received.

d. their costs are accumulated on job cost sheets.

40. A process cost system would be used for all of the following products except

a. instant ramen noodles.

b. portable phone chargers.

c. music videos.

d. energy drinks.

41. In a process cost system,

a. a work in process inventory account is maintained for each product.

b. a materials requisition must identify the job on which the materials will be used.

c. a work in process inventory account is maintained for each process.

d. one work in process inventory account is maintained for all the processes, similar to a job order cost system.

42. Differences between a job order cost system and a process cost system include all of the following except the

a. documents used to track costs.

b. point at which costs are totaled.

c. unit cost computations.

d. flow of costs.

43. Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

a. The detail at which costs are calculated

b. The time period each covers

c. The number of work in process inventory accounts

d. The manufacturing cost elements included

44. Which of the following is a true statement about process cost systems?

a. In process cost systems, costs are accumulated but not assigned.

b. A process cost system has one work in process inventory account for each process.

c. In process cost systems, costs are summarized on job cost sheets.

d. Unit costs are not computed in process cost systems.

45. Which of the following is correct regarding cost systems?

Job Order Process

a. Work in process account several one for each process

b. Work in process account one one

c. Work in process account one one for each process

d. Work in process account several one

46. In a process cost system, unit costs are determined using a

a. numerator of costs of each job.

b. denominator of equivalent units produced during the period.

c. denominator of equivalent units produced for the job.

d. denominator of equivalent units produced for the day.

47. In a process cost system, manufacturing costs are summarized on a

a. job order cost sheet.

b. process order cost sheet.

c. production cost report.

d. manufacturing cost sheet.

48. Which of the following manufacturing cost elements are incurred in a process cost system?

a. Direct materials

b. Direct labor

c. Manufacturing overhead

49. In a process cost system, product costs are summarized

a. on job order cost sheets.

b. on production cost reports.

c. after each unit is produced.

d. when the products are sold.

50. When manufacturing overhead costs are assigned to production in a process cost system, they increase

a. the Finished Goods Inventory account.

b. Cost of Goods Sold.

c. a Manufacturing Overhead account.

d. a Work in Process Inventory account.

51. A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed and transferred out. Costs transferred out of the Baking Department will be transferred to

a. Finished Goods Inventory.

b. Cost of Goods Sold.

c. Work in Process—Packaging Department.

d. Manufacturing Overhead.

52. Which of the following would not appear as an increase to the work in process account of a second department in a two-stage production process?

a. Materials used

b. Overhead applied

c. Labor assigned

d. Cost of products transferred out

53. Materials requisitions are

a. not used in process costing.

b. generally used more frequently in process costing than job order costing.

c. generally used less frequently in process costing than job order costing.

d. used more frequently by latter stage production departments.

54. A primary driver of overhead costs in continuous manufacturing operations is

a. direct labor dollars.

b. direct labor hours.

c. machine hours.

d. machine maintenance dollars.

55. Price Company assigns overhead based on machine hours. The Milling Department logs 2,400 machine hours and the Cutting Department shows 4,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show a(n)

a. increase to Manufacturing Overhead for $32,000.

b. decrease to Work in Process —Cutting Department for $20,000.

c. increase to Work in Process for $20,000.

d. decrease to Manufacturing Overhead for $32,000.

56. Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending Work in Process Inventory at 80% completion and 32,000 physical units. There are no units in beginning Work in Process Inventory. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?

a. 42,000.

b. 40,000.

c. 8,000.

d. 30,000.

57. 20,000 units in a process that are 70% complete are equal to

a. 20,000 equivalent units of production.

b. 8,000 equivalent units of production.

c. 14,000 equivalent units of production.

d. 6,000 equivalent units of production.

58. A process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process that were 30% complete. The equivalent units of production for the period were

a. 85,000 equivalent units.

b. 135,000 equivalent units.

c. 100,000 equivalent units.

d. 70,000 equivalent units.

59. A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete as to conversion costs in the ending work in process at the end of January. What were the equivalent units of production for materials for the month of January?

a. 98,000 equivalent units

b. 82,000 equivalent units

c. 70,000 equivalent units

d. 90,000 equivalent units

60. A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete as to conversion costs in the ending work in process at the end of January. What were the equivalent units of production for conversion costs for the month of January?

a. 70,000 equivalent units

b. 82,000 equivalent units

c. 78,000 equivalent units

d. 90,000 equivalent units

61. Equivalent units are calculated by

a. multiplying the percentage of work done by the equivalent units of output.

b. dividing physical units by the percentage of work done.

c. multiplying the percentage of work done by the physical units.

d. dividing equivalent units by the percentage of work done.

62. Minor Company had the following department data:

Physical Units

Work in Process Inventory, July 1 30,000

Completed and transferred out 165,000

Work in Process Inventory, July 31 45,000

Materials are added at the beginning of the process. What are equivalent units for materials in July?

a. 165,000.

b. 180,000.

c. 240,000.

d. 210,000.

63. Corsi Company had the following department data:

Physical Units

Work in Process Inventory, beginning -0-

Completed and transferred out 90,000

Work in Process Inventory, ending 7,000

Materials are added at the beginning of the process. What are equivalent units for materials during the period?

a. 90,000.

b. 94,000.

c. 97,000.

d. 83,000.

64. Gantner Company had the following department information about physical units and percentage of completion:

Physical Units

Work in Process Inventory, May 1 (60%) 60,000

Completed and transferred out 180,000

Work in Process Inventory, May 31 (40%) 50,000

If materials are added at the beginning of the production process, are equivalent units for materials for the month of May?

a. 240,000.

b. 230,000.

c. 224,000.

d. 200,000.

65. It is necessary to calculate equivalent units of production in a department because

a. a physical count of units is impossible.

b. some units worked on in the department are not fully complete.

c. the physical units in the department are always 100% complete.

d. at times a department may use a job order cost system and then switch to a process cost system.

66. In the month of June, a department had 20,000 units in beginning work in process inventory that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June, there were 10,000 units in ending work in process that were 40% complete as to conversion costs. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. How many units were completed and transferred out of the process in June?

a. 90,000 units

b. 80,000 units

c. 100,000 units

d. 110,000 units

67. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete as to conversion costs. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June were

a. 100,000 equivalent units.

b. 110,000 equivalent units.

c. 114,000 equivalent units.

d. 90,000 equivalent units.

68. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete as to conversion costs. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

a. 90,000 equivalent units.

b. 104,000 equivalent units.

c. 100,000 equivalent units.

d. 110,000 equivalent units.

69. A process with no beginning work in process, completed and transferred out 35,000 units during a period and had 14,000 units in the ending work in process that were 50% complete as to conversion costs. What are the equivalent units of production for the period for conversion costs?

a. 42,000 equivalent units

b. 49,000 equivalent units

c. 56,000 equivalent units

d. 28,000 equivalent units

70. A process with 1,600 units of beginning work in process, completed and transferred out 25,000 units during a period. There were 10,000 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. What are the equivalent units of production for the period for material costs?

a. 29,000 equivalent units

b. 35,000 equivalent units

c. 27,000 equivalent units

d. 33,000 equivalent units

71. Hanker Company had the following department data on physical units:

Work in Process Inventory, beginning 3,000

Completed and transferred out 18,000

Work in Process Inventory, ending 2,400

Materials are added at the beginning of the process. What are equivalent units for materials during the period?

a. 18,600

b. 21,000

c. 20,400

d. 15,000

72. Super-Tech Industries had the following department information about physical units and percentage of completion:

Physical Units

Work in Process Inventory, 6/1 (75% complete as to conversion costs) 8,000

Completed and transferred out 22,000

Work in Process Inventory, 6/30 (50% complete as to conversion cost) 12,000

If materials are added at the beginning of the production process, are equivalent units for materials during June?

a. 30,000

b. 34,000

c. 36,000

d. 28,000

73. Gloria Company had no beginning work in process inventory. During the period, 16,000 units were completed and transferred out, and there were 1,200 units of ending work in process inventory. How many units were started into production during the period?

a. 17,200

b. 16,000

c. 14,800

d. 1,200

74. Cohen Company is calculating the equivalent units for conversion costs for a period in which the company had 5,000 units of ending work in process at 80% completion as to conversion costs and 45,000 units that were completed and transferred out. There are no units in beginning work in process in the department. Materials are added at the beginning of the process and conversion costs occur evenly throughout the entire production period. What are the equivalent units of production for conversion costs for the period?

a. 50,000

b. 49,000

c. 46,000

d. 44,000

75. If beginning work in process is 4,000 units, ending work in process inventory is 2,000 units, and the units accounted for equals 15,000 units, what number of units must have been started into production?

a. 19,000

b. 17,000

c. 11,000

d. 13,000

76. The Molding Department of Kennett Company has the following production data: beginning work in process inventory 25,000 units (60% complete as to conversion costs), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process inventory 50,000 units (40% complete as to conversion costs). Assuming materials are entered at the beginning of the process, equivalent units for materials are

a. 500,000.

b. 425,000.

c. 450,000.

d. 525,000.

77. The Molding Department of Kennett Company has the following production data: beginning work in process inventory 25,000 units (60% complete as to conversion costs), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process inventory 50,000 units (40% complete as to conversion costs). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are

a. 500,000.

b. 455,000.

c. 470,000.

d. 450,000.

78. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete as to conversion costs), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete as to conversion costs). Assuming materials are entered at the beginning of the process, equivalent units for materials are

a. 770,000.

b. 650,000.

c. 690,000.

d. 810,000.

79. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete as to conversion costs), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete as to conversion costs). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are

a. 770,000.

b. 810,000.

c. 722,000.

d. 650,000.

80. Crawford Company has the following equivalent units of production for July:

materials 20,000 and conversion costs 18,000.

Production cost data are:

Materials Conversion

Work in Process Inventory, July 1 $ 6,400 $ 3,000

Costs added in July 50,400 42,000

The unit production costs for July are:

Materials Conversion Costs

a. $2.52 $2.50

b. 2.84 2.33

c. 2.52 2.33

d. 2.84 2.50

81. In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, completed and transferred out 24,000 units, and had an ending work in process of 3,000 units. How many units were started into production by Moyer during the month?

a. 18,000.

b. 21,000.

c. 24,000.

d. 27,000.

82. In the Shaping Department of Rollins Company, the unit materials cost is $5.00 and the unit conversion cost is $3.00. The department completed and transferred out 40,000 units and had 5,000 units in ending work in process 20% complete as to conversion costs. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is

a. $8,000.

b. $25,000.

c. $28,000.

d. $40,000.

83. Holton Company has the following equivalent units of production for July:

materials 20,000 and conversion 18,000.

Production cost data are:

Materials Conversion

Work in Process Inventory, July 1 $ 8,000 $ 3,750

Costs added in July 63,000 52,500

The unit production costs for July are

Materials Conversion Costs

a. $3.15 $3.13

b. 3.55 2.92

c. 3.15 2.92

d. 3.55 3.13

84. In Kapler Company, the Cutting Department had beginning work in process of 8,000 units, completed and transferred out 25,000 units, and had an ending work in process of 4,000 units. How many units were started into production by Kapler during the month?

a. 17,000

b. 21,000

c. 25,000

d. 29,000

85. In the Shaping Department of Jenkins Company the unit materials cost is $3.00 and the unit conversion cost is $1.80. The department completed and transferred out 8,000 units and had 2,000 units in ending work in process which were 20% complete as to conversion costs. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process inventory is

a. $1,920.

b. $6,000.

c. $6,720.

d. $9,600.

86. Cinder Company had the following department information for the month:

Total materials costs $60,000

Equivalent units of production for materials 10,000

Total conversion costs $90,000

Equivalent units of production for conversion costs 20,000

What is the total manufacturing cost per unit?

a. $10.50

b. $12.00

c. $4.50

d. $6.00

87. Materials costs of $600,000 and conversion costs of $642,600 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 100,000 units were started into production in September, and 8,000 units in ending work in process that were 40% complete as to conversion costs at the end of September.

What was the total amount of manufacturing costs assigned to the units that were completed and transferred out of the processing department in September?

a. $1,058,920

b. $1,173,000

c. $1,242,600

d. $1,151,000

88. Materials costs of $600,000 and conversion costs of $642,600 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 100,000 units were started into production in September, and 8,000 units in ending work in process that were 40% complete as to conversion costs at the end of September.

What was the total amount of manufacturing costs assigned to the 8,000 units in ending work in process inventory?

a. $99,040

b. $91,600

c. $40,800

d. $69,600

89. Charley Company’s Assembly Department has materials cost of $2 per unit and conversion cost of $4 per unit. There are 20,000 units in ending work in process which are 70% complete as to conversion costs and 100% complete as to materials. What are total costs to be assigned to ending work in process inventory?

a. $56,000

b. $96,000

c. $84,000

d. $120,000

90. Byrd Company decided to analyze certain costs for June of the current year. Units started into production equaled 14,000 and ending work in process equaled 2,000 units. If there was no beginning work in process, what is the conversion cost per unit if ending work in process was 25% complete as to conversion costs and total conversion costs equaled $52,500?

a. $3.28

b. $4.38

c. $4.20

d. $3.62

91. Long Company has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 6,000 and ending work in process equaled 400 units. Long had no beginning work in process. Conversion costs are applied equally throughout production and materials are added at the beginning of the process. What is the materials cost per unit if ending work in process was 25% complete as to conversion costs and total materials costs equaled $18,000?

a. $3.00

b. $2,95

c. $3.05

d. $2.81

92. Conversion cost per unit equals $7.00. Total materials costs is $80,000. Equivalent units of production are 20,000. What is the total manufacturing cost per unit?

a. $11.00

b. $7.00

c. $4.00

d. $3.00

93. Physical units are 40,000. Total conversion costs are $158,000. There are 1,000 units in ending work in process inventory that are 50% complete as to conversion costs. What is the conversion cost per unit?

a. $4.00

b. $3.95

c. $4.05

d. $3.95

94. Madison Industries has equivalent units of production of 8,000 for materials and for conversion costs. Total manufacturing costs are $200,000. Total materials costs are $150,000. What is the conversion cost per unit?

a. $2.50

b. $6.25

c. $25.00

d. $5.00

95. Equivalent units of production for materials total 40,000. There were 32,000 units completed and transferred out. Equivalent units of production for conversion costs were 36,000. What are the physical units for conversion costs if ending work in process inventory is 50% complete as to conversion costs?

a. 36,000

b. 40,000

c. 8,000

d. 32,000

96. If equivalent units are 15,000 for conversion costs and 10,000 units were completed and transferred out, what is the stage of for the 20,000 units remaining in ending work in process inventory?

a. 75%

b. 25%

c. 10%

d. 20%

97. At the beginning of April, a department had 500 units in Work in Process Inventory that were 60% complete as to conversion costs. These units had $60,000 of materials costs and $45,000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 10,000 units were completed and transferred to Finished Goods Inventory and there were 2,000 units that were 25% complete as to conversion costs in Work in Process Inventory on April 30. During April, manufacturing costs charged to the department were: Materials $1,380,000; Conversion costs $1,530,000.

The cost assigned to the units completed and transferred out to Finished Goods Inventory during April was

a. $2,700,000.

b. $2,715,000.

c. $2,820,000.

d. $2,685,000.

98. At the beginning of April, a department had 500 units in Work in Process Inventory that were 60% complete as to conversions costs. These units had $60,000 of materials costs and $45,000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 10,000 units were completed and transferred out to Finished Goods Inventory and there were 2,000 units that were 25% as to conversion costs complete in Work in Process Inventory on April 30. During April, manufacturing costs charged to the department were: Materials $1,380,000; Conversion costs $1,530,000.

The cost assigned to the units in the ending Work in Process Inventory was

a. $360,000.

b. $315,000.

c. $240,000.

d. $435,000.

99. Zibba Company enters materials at the beginning of the process. In January, there was no beginning work in process, but there were 200 units in the ending work in process inventory. The number of units completed and transferred out equals the number of

a. units started.

b. units started less 200.

c. units started plus 200.

d. equivalent units.

100. If there are no units in process at the beginning of the period, then

a. the company must be using a job order cost system.

b. only one computation of equivalent units of production will be necessary.

c. the units started into production will equal the number of units completed and transferred out.

d. the units to be accounted for will equal the units completed and transferred out and the units in process at the end of the period.

101. Which of the following is not a necessary step in preparing a production cost report?

a. Compute the equivalent units of production.

b. Compute the physical unit flow.

c. Prepare the job order cost sheet.

d. Prepare a cost reconciliation schedule.

102. Honrad Company's Assembly Department has materials cost of $4 per unit and conversion cost of $8 per unit. There are 30,000 units in ending work in process which are 70% complete as to conversion costs. Materials are added at the beginning of the process. What are the total costs to be assigned to the ending work in process inventory?

a. $168,000

b. $288,000

c. $253,200

d. $360,000

103. In a process cost system, units to be accounted for in a department are equal to the

a. number of units started into production or transferred into the department.

b. number of units transferred out of the department.

c. units in the beginning work in process inventory plus the units started into production or transferred into the department.

d. ending work in process inventory plus the units started into production or transferred into the department.

104. The total units accounted for equals units in

a. beginning Work in Process Inventory – units completed and transferred out.

b. beginning Work in Process Inventory + ending Work in Process Inventory.

c. ending Work in Process Inventory + units completed and transferred out.

d. ending Work in Process Inventory – units started into production.

105. The Slicing Department production process shows:

Units

Beginning Work in Process Inventory 10,000

Ending Work in Process Inventory 50,000

Total units to be accounted for 180,000

How many units were started into production in the Slicing Department?

a. 190,000

b. 130,000

c. 180,000

d. 170,000

106. Department 1 of a two-department production process reports:

Units

Beginning Work in Process Inventory 10,000

Ending Work in Process Inventory 50,000

Total units to be accounted for 180,000

How many units were completed and transferred out to Department 2?

a. 50,000

b. 130,000

c. 180,000

d. 170,000

107. The Assembly Department reports the following information:

Units

Beginning Work in Process Inventory 20,000

Ending Work in Process Inventory 65,000

Units Completed and Transferred Out 31,000

What are the total units to be accounted for by the Assembly Department?

a. 96,000

b. 65,000

c. 85,000

d. 76,000

108. The last department in a production process shows the following information at the end of the period:

Units

Beginning Work in Process Inventory 25,000

Started into Production 240,000

Ending Work in Process Inventory 50,000

How many units were completed and transferred out to Finished Goods Inventory during the period?

a. 240,000

b. 265,000

c. 290,000

d. 215,000

109. A process began the month with 3,000 units in the beginning work in process inventory and ended the month with 2,000 units in the ending work in process inventory. If 22,000 units were completed and transferred out of the process during the month, how many units were started into production during the month?

a. 21,000

b. 23,000

c. 22,000

d. 20,000

110. If 150,000 units are started into production, there was no beginning work in process inventory, and 50,000 units are in process at the end of the period, how many units were completed and transferred out?

a. 150,000

b. 50,000

c. 100,000

d. 200,000

111. Total units to be accounted for less units in beginning work in process inventory equals

a. total units accounted for.

b. units completed and transferred out.

c. units started into production.

d. equivalent units.

112. If 180,000 units are completed and transferred out of a department, there was no beginning work in process inventory, and there are 30,000 units in process at the end of the period, the number of units that were started into production during the period is

a. 210,000.

b. 180,000.

c. 150,000.

d. 30,000.

113. A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of July, there was no beginning work in process inventory; 40,000 units were completed and transferred out; and there were 20,000 units in the ending work in process inventory that were 40% complete as to conversion costs. During July, $120,000 materials costs and $105,000 conversion costs were charged to the department.

The unit production costs for materials and conversion costs for July were

Materials Conversion Costs

a. $2.00 $1.75

b. $2.00 $2.19

c. $2.50 $1.75

d. $3.00 $2.66

114. Conversion cost per unit equals $6. Total materials cost equal $90,000. Equivalent units for materials are 10,000. What is the total manufacturing cost per unit?

a. $15

b. $6

c. $12

d. $9

115. The following department data are available:

Total materials costs $180,000

Equivalent units of production for materials 60,000

Total conversion costs $105,000

Equivalent units of production for conversion costs 30,000

What is the total manufacturing cost per unit?

a. $3.00

b. $3.50

c. $6.50

d. $7.75

116. Byers Company had the following department information for the month:

Total materials costs $48,000

Equivalent units of production for materials 10,000

Total conversion costs $80,000

Equivalent units of production for conversion costs 20,000

What is the total manufacturing cost per unit?

a. $4.26

b. $10.40

c. $8.53

d. $8.80

117. Physical units accounted for are 160,000. Total conversion costs are $387,100. There are 4,000 units in ending work in process inventory which are 50% complete as to conversion costs. What is the conversion cost per unit?

a. $2.45

b. $2.42

c. $2.39

d. $2.36

118. A department had the following information for the month:

Total materials costs $300,000

Conversion cost per unit $3.00

Total manufacturing cost per unit $5.00

What are the equivalent units of production for materials?

a. 150,000

b. 100,000

c. 60,000

d. Cannot be determined from the information provided

119. Maisley Company decided to analyze certain costs for June of the current year. Units started into production equaled 28,000 and ending work in process inventory equaled 4,000. If there was no beginning work in process inventory, what is the conversion cost per unit if ending work in process inventory was 25% complete as to conversion costs and total conversion costs equaled $140,000?

a. $4.40

b. $5.00

c. $5.60

d. $5.83

120. Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to a processing department in the month of September. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process inventory, 20,000 units were started into production in September, and there were 5,000 units in ending work in process inventory that were 40% complete as to conversion costs at the end of September.

What was the total amount of manufacturing costs assigned to the units that were completed and transferred out of the process in September?

a. $2,250,000.

b. $3,000,000.

c. $2,409,750.

d. $2,047,500.

121. Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to a processing department in the month of September. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process inventory, 20,000 units were started into production in September, and there were 5,000 units in ending work in process inventory that were 40% complete as to conversion costs at the end of September.

What was the total amount of manufacturing costs assigned to the 5,000 units in the ending Work in process inventory?

a. $682,500.

b. $750,000.

c. $480,000.

d. $300,000.

122. Mayer Company has recently tried to improve its analysis for its manufacturing process. Units started into production this month was 18,000 and ending work in process inventory was 1,200 units. Mayer had no beginning work in process inventory. Conversion costs are applied equally throughout production and materials are applied at the beginning of the process. What is the materials cost per unit if ending work in process inventory was 25% complete as to conversion costs and total materials costs equaled $72,000?

a. $4.00

b. $4.21

c. $16.00

d. $3.75

123. Madison Industries has equivalent units of 8,000 for materials and for conversion costs. Total manufacturing costs are $128,000. Total materials costs are $96,000. What is the conversion cost per unit?

a. $2

b. $4

c. $16

d. $3

124. In a process cost system, a production cost report is prepared

a. only for the first processing department.

b. for all departments in the aggregate.

c. for each processing department.

d. only for the last processing department.

125. A production cost report

a. is prepared for each product.

b. is prepared from a job cost sheet.

c. will show quantity and cost data for a production department.

d. will not identify a specific department if more than one department is involved in the production process.

126. In the production cost report, the total

a. physical units accounted for equals the costs accounted for.

b. physical units accounted for equals the physical units to be accounted for.

c. costs charged equals the units to be accounted for.

d. costs accounted for equals the costs of the units started into production.

^a127. The Cutting Department’s output during the period consists of 22,000 units completed and transferred out, and 4,000 units in ending work in process inventory that were 25% complete as to materials and conversion costs. Beginning work in process inventory was 2,000 units that were 25% complete as to materials and conversion costs. Under the FIFO method, what are the equivalent units of production for materials?

a. 24,300

b. 22,500

c. 25,300

d. 24,000

135. A process cost system would be used by all of the following except a(n)

a. cereal manufacturer.

b. social media consulting company.

c. oil company.

d. lawn mower manufacturer.

136. Which of the following is considered a difference between a job order cost and a process cost system?

a. The manufacturing cost elements

b. Documents used to track costs

c. The accumulation of the costs of materials, labor, and overhead

d. The flow of costs

137. The basic similarities between job order cost and process cost systems include all of the following except the

a. manufacturing cost elements.

b. flow of costs.

c. point at which costs are totaled.

d. accumulation of the costs of materials, labor, and overhead.

138 Equivalent units of production are a measure of

a. units completed and transferred out.

b. units stared into production and transferred out.

c. units in ending work in process inventory.

d. the work done in a period expressed in fully completed units.

139. Total physical units to be accounted for are equal to the units

a. started (or transferred) into production.

b. started (or transferred) into production plus the units in beginning work in process.

c. started (or transferred) into production less the units in beginning work in process.

d. completed and transferred out.

140. In computing equivalent units, ___________ is not part of the equivalent units of production equation.

a. units transferred out

b. beginning Work in Process Inventory

c. ending Work in Process Inventory

d. None of these is correct.

141. In Saint-Simon, Inc., the Assembly Department started into production 60,000 units and completed and transferred out 70,000 units. If beginning Work in Process Inventory was 30,000 units, how many units are in ending Work in Process Inventory?

a. 0

b. 10,000

c. 20,000

d. 40,000

142. The total units to be accounted for is computed by adding

a. beginning units in process to units completed and transferred out.

b. ending units in process to units started into production.

c. beginning units in process to units started into production.

d. ending units in process to total units accounted for.

143. In the Camria Company, materials are entered at the beginning of the process. If there is no beginning work in process inventory, but there is an ending work in process inventory, the number of equivalent units for materials costs will be

a. the same as the units started.

b. the same as the units completed and transferred out.

c. less than the units started into production.

d. less than the units completed and transferred out.

144. For the Assembly Department, unit materials cost is $6 and unit conversion cost is $9. If there are 10,000 units in ending work in process inventory that are 75% complete as to conversion costs and 100% complete as to materials cost, the costs to be assigned to the ending work in process inventory are

a. $150,000.

b. $127,500.

c. $112,500.

d. $135,000.

145. The total costs accounted for in a production cost report equals the

a. cost of units completed and transferred out only.

b. cost of units started into production.

c. cost of units completed and transferred out plus the cost of ending work in process inventory.

d. cost of beginning work in process inventory plus the cost of units completed and transferred out.

146. In a production cost report, which one of the following sections is not shown under Costs?

a. Unit costs

b. Costs to be accounted for

c. Costs during the period

d. Units accounted for

BRIEF EXERCISES

BE 147

Tip Top Painting Company has the following production data for January:

• Beginning Work in Process Inventory, 0 units
• Units completed and transferred out, 35,000
• Units in ending Work in Process Inventory, 10,000 that are 30% complete for conversion costs

Materials are added only at the beginning of the process.

Instructions

Compute equivalent units of production for both materials and conversion costs.

Ex. 159

Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost system. Lutz had the following transactions during the current month:

(a) Purchased raw materials for $50,000.

(b) Raw materials requisitioned for production were:

Direct materials

Mixing department $20,000

Finishing department 14,000

(c) Incurred factory labor costs of $74,000.

(d) Factory labor used:

Mixing department $44,000

Finishing department 30,000

(e) Manufacturing overhead is applied to the product based on machine hours used in each department:

Mixing department—400 machine hours at $30 per machine hour.

Finishing department—500 machine hours at $20 per machine hour.

(f) Units costing $56,000 were completed in the Mixing Department and were transferred out to the Finishing Department.

(g) Units costing $70,000 were completed in the Finishing Department and were transferred out to Finished Goods Inventory.

(h) Finished goods costing $40,000 were sold.

Ex. 159 (Cont.)

Instructions

Record the preceding transactions for Lutz Company using the format below.

Ex. 160

Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods Inventory, $5,600. During the month the following transactions occurred:

1. Purchased $40,000 of raw materials.

2. Incurred $75,000 of factory labor.

3. Incurred $50,000 of manufacturing overhead.

4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000.

5. Assigned factory labor for Finishing, $60,000 and Fabricating, $15,000.

6. Assigned $45,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating.

Instructions

Enter beginning balances and record the transactions for the month using the following format .

Ex. 161

The Pasta Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following balances and increases:

Cooking Packaging

Beginning Work in Process Inventory $ -0- $ 6,000

Direct Materials 40,000 26,000

Factory Labor 20,000 9,000

Overhead 30,000 15,000

Costs transferred in 65,000

Instructions

Enter beginning balances and record the February transactions that involved the Work in Process Inventory accounts, using format below.

Ex. 162

Benson Industries uses a process cost system. Products are processed first by Department A, then by Department B, before being transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October:

Costs of units transferred in $120,000

Manufacturing costs added in Department B:

Direct materials $50,000

Direct labor 12,000

Manufacturing overhead 19,000 81,000

Total costs charged to Department B in October $201,000

The cost of work in process in Department B at October 1 is $25,000, and the cost of work in process at October 31 is $30,000.

Instructions

Using the format below, record for the month of October:

(a) The transfer of production from Department A to B.

(b) The manufacturing costs incurred by Department B.

(c) The transfer of completed units from Department B to the Finished Goods Inventory warehouse.

Ex. 163

Hardy Company manufactures a single product by a continuous process that involves two production departments. The records indicate that $140,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product during the current period. The factory overhead rate is $25 per machine hour; machine hours were 5,000 in Department 1 during the current period. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000.

Instructions

Using the format below, record

(a) The flow of costs into Department 1 for

(1) direct materials

(2) direct labor

(3) overhead

(b) The transfer of production costs to Department 2.

Ex. 164

Muffy Painting Company has the following production data for March.

Ending Work in Process

Beginning Units % Complete as to

Month Work in Process Transferred Out Units Conversion Cost

March 3,000 42,000 12,000 75%

Instructions

Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process.

Ex. 165

The Nitrogen Fixation Department of Tomco Company began the month of December with work in process of 4,000 units that were 100% complete as to materials and 30% complete as to conversion costs. Units completed and transferred out during the month were 12,000 units. Ending work in process inventory contains 10,000 units that are 100% complete as to materials and 40% complete as to conversion costs.

Instructions

Compute the equivalent units of production for materials and conversion costs for the month of December.

Ex. 166

At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows:

Beginning Work In Process Ending Work In Process

Percentage Units Completed Percentage

Month Units Completed and Transferred Out Units Completed

July -0- — 11,000 1,500 90%

Sept. 2,500 20% 9,000 5,000 70%

Instructions

(a) Compute the physical units for July.

(b) Compute the equivalent units of production for materials and conversion costs for September.

Ex. 167

Watts Company adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process.

Instructions

Complete the following calculation of equivalent units for materials and conversion costs.

Equivalent Units

Physical Units Materials Conversion Costs

Completed and transferred out 40,000

Ending Work in Process Inventory

Materials

Conversion costs, 75% complete 12,000

Total units

Ex. 168

Oates Company’s Work in Process – Finishing account shows the following activity.

Production records show that there were 2,000 units in beginning Work in Process Inventory, 50% complete as to conversion costs; 8,000 units started into production, and 4,500 units completed and transferred out. The beginning Work in Process Inventory had conversion costs of $3,150. Conversion costs of $6,600 were added during the period. The units in ending inventory were 60% complete as to conversion costs. Materials are added at the beginning of the process.

Instructions

(a) How many units are in process at June 30?

(b) What is the unit conversion cost for June?

(c) What is the conversion cost in the June 30 work in process inventory?

Ex. 169

The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $137,100 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.

Other data for the month of July are as follows:

Beginning work in process inventory, 7/1 25,000 units (40% complete)

Units completed and transferred out 70,000 units

Ending work in process inventory, 7/31 30,000 units (30% complete)

Instructions

1. How many physical units have to be accounted for in July?

2. What are the equivalent units of production for materials and for conversion costs for the month of July?

3. What is the total cost assigned to the 70,000 units that were completed and transferred out of work in process in July?

4. What is the total cost of the July 31 work in process inventory?

Ex. 170

The Finishing Department of Edwards Company has the following production and cost data for July, its first month of operation:

1. Completed and transferred out, 8,000 units

2. Ending Work in Process Inventory, 2,000 units that are 40% complete as to conversion costs

3. Materials added, $30,000; conversion costs incurred, $17,600

Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Instructions

(a) Compute the equivalent units of production for materials and conversion costs for the month of July.

(b) Compute unit costs and prepare a cost reconciliation schedule.

Ex. 171

Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1, the beginning work in process inventory consisted of 20,000 units which were 60% complete and had a cost of $175,000, $145,000 of which were materials costs. During March, the following occurred:

Materials added: $305,000

Conversion costs incurred: $120,000

Units completed and transferred out in March: 50,000

Units in ending work in process inventory (40% complete as to conversion costs) : 25,000

Instructions

1. What are the equivalent units of production for materials and conversion costs in the Fabricating Department for the month of March?

2. What are the costs assigned to the ending work in process inventory on March 31?

3. What are the costs assigned to units completed and transferred out during March?

Ex. 172

Given below are the production data for Department No. 1 for the first month of operation:

Costs charged to Department 1:

Materials $12,000

Labor 2,600

Overhead 15,900

During this first month of operations, 4,000 units were started into production; 3,500 units were completed and transferred out; and the remaining 500 units are 100% completed with respect to materials and 40% complete with respect to conversion costs.

Instructions

Compute the following:

(a) Unit materials cost

(b) Equivalent units for conversion costs

(c) Unit conversion cost

(d) Total cost of 500 units in process at end of month

(e) Total cost of 3,500 units transferred out

Ex. 173

Kinsler Company’s Work in Process – Painting account shows the following activity.

Production records show that there were 700 units in the beginning work in process inventory that were 30% complete as to conversion costs, 3,800 units started into production, and 4,000 units completed and transferred out. The beginning work in process inventory had materials cost of $3,060 and conversion costs of $2,240. The units in ending working process inventory were 40% complete as to conversion costs. Materials are entered at the beginning of the painting process.

Instructions

(a) How many units are in process at May 31?

(b) What is the unit materials cost for May?

(c) What is the unit conversion cost for May?

(d) What is the total cost of units completed and transferred out in May?

(e) What is the cost of the May 31 work in process inventory?

Ex. 174

The Cutting Department of Sanderson Company has the following production and cost data for July.

Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Instructions

(a) Determine the equivalent units of production for (1) materials and (2) conversion costs.

(b) Compute unit costs and prepare a cost reconciliation schedule.

Ex. 175

Wilkinson Company has gathered the following information.

Units in beginning work in process inventory -0-

Units started into production 54,000

Units in ending work in process inventory 10,000

Percent complete for conversion costs in

ending work in process inventory 60%

Costs incurred:

Direct materials $ 81,000

Direct labor $ 99,000

Overhead $131,000

Instructions

(a) Compute equivalent units of production for materials and for conversion costs.

(b) Determine the unit costs of production.

(c) Show the assignment of costs to units completed and transferred out and those still in process.

Ex. 176

Carlton Company has gathered the following information

Units in beginning work in process inventory 25,000

Units started into production 115,000

Units in ending work in process inventory 30,000

Percent complete for conversion costs in

ending work in process inventory 40%

Costs incurred:

Direct materials $175,000

Direct labor $235,400

Overhead $191,600

Materials are added at the beginning of the process.

Instructions

(a) Compute equivalent units of production for materials and for conversion costs.

(b) Determine the unit costs of production.

(c) Show the assignment of costs to units completed and transferred out and those still in process.

Ex. 177

The Polishing Department of Estaban Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production

Beginning work in process inventory: 2,000 units that are 100% complete as to materials and 40% complete as to conversion costs

Units started into production during the period: 48,000

Ending work in process inventory: 6,000 units that are 30% complete as to conversion costs.

Manufacturing costs

Beginning work in process inventory costs: $18,000 of materials and $13,000 of conversion costs.

Materials costs added: $202,000

Labor costs incurred: $178,300

Overhead applied: $312,500

Instructions

(a) Compute the equivalent units of productions for materials and conversion costs for the month of September.

(b) Compute the unit costs for materials and conversion costs for the month.

(c) Determine the costs to be assigned to the units completed and transferred out and those still in process.

Ex. 178

Grey Building Supplies' total materials costs are $30,000 and total conversion costs are $33,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.

Instructions

Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.

Ex. 179

Glazer, Inc. has the following production data for June:

Completed and transferred out 50,000 units

Ending Work in Process Inventory 5,000 units

The units in ending Work in Process Inventory are 100% complete for materials and 60% complete for conversion costs. Materials costs are $3 per unit and conversion costs are $6 per unit.

Instructions

Determine the costs to be assigned to the units transferred out and the units in ending Work in Process Inventory.

Ex. 180

Production costs chargeable to the Sanding Department in July in Magnum Company were $30,000 for materials, $17,000 for labor, and $13,000 for manufacturing overhead. Equivalent units of production are 30,000 for materials and 20,000 for conversion costs.

Instructions

Compute the unit costs for materials and conversion costs.

Ex. 181

Mayer Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in Process Inventory on May 1 was 75% complete as to conversion costs and Work in Process Inventory on May 31 was 60% complete for conversion costs.

Instructions

Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

MAYER COMPANY

Molding Department

Production Cost Report

For the Month Ended May 31, 2022

Equivalent Units

QUANTITIES Physical Units Materials Conversion Costs

Units to be accounted for

Work in process, May 1 8,000

Started into production 32,000

Total units 40,000

Units accounted for

Completed and transferred out 35,000

Work in process, May 31 5,000

Total units 40,000

COSTS

Unit costs Materials Conversion Costs Total

Costs in May $140,000 $161,500 $301,500

Equivalent units

Unit costs $ $ $

Costs to be accounted for

Work in process, May 1 $ 60,000

Started into production 241,500

Total costs $301,500

Cost Reconciliation Schedule

Costs accounted for

Completed and transferred out $

Work in process, May 31

Materials $

Conversion costs

Total costs $301,500

Ex. 182

Baker Winery manufactures a fine wine in two departments, Fermenting and Bottling. In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine is bottled and then sent to the finished goods warehouse. Labor and overhead are incurred uniformly through both processes. Materials are entered at the beginning of both processes. Cost and production data for the Fermenting Department for December 2022 are presented below:

Cost data

Beginning work in process inventory $ 37,000 ($30,000 of materials cost)

Materials 390,000

Conversion costs 116,000

Total costs $543,000

Ex. 182 (cont.)

Production data

Beginning Work in Process Inventory (gallons) 5,000 (40% complete as to conversion costs)

Gallons started into production 79,000

Ending Work in Process Inventory (gallons) 8,000 (75% complete as to conversion costs)

Instructions

(a) Compute the equivalent units of production.

(b) Determine the unit production costs.

(c) Determine the costs to be assigned to units completed and transferred out and those in ending Work in Process Inventory.

Ex. 183

The Assembly Department of Nitz Company has the following production and cost data at the end of May, 2022, its first month of operations.

Production: 30,000 units started into production; 25,000 units completed and transferred out and 5,000 units 100% completed as to materials and 40% complete as to conversion costs.

Manufacturing Costs: Materials added at beginning of process, $90,000; labor, $75,000; overhead $60,000.

Instructions

Prepare a production cost report for the month of May.

Ex. 184

Romero Company—Perth Division is a state of the art production facility that manufactures landing gears for airplanes. The 500 units in the September 30 work in process inventory are 60% complete for conversion costs. Materials are assumed to be 100% complete. Total materials costs during the period totaled $840,000.

Instructions

As the new plant accountant, you are asked to complete the production cost report which appears as follows:

Ex. 184 (cont.)

ROMERO COMPANY—Perth Division

Assimilation Department

Production Cost Report

For the Month Ended September 30, 2022

Equivalent Units

QUANTITIES Physical Units Materials Conversion Costs

Units to be accounted for

Work in process, September 1 300

Started into production 1,100

Total units 1,400

Units accounted for

Completed and transferred out 900 900 900

Work in process, September 30 500 500

Total units 1,400 1,400

COSTS

Unit Costs Materials Conversion Costs Total

Costs in September $840,000 $ $1,104,000

Equivalent units of production

Unit costs $ $ 220 $

Costs to be accounted for

Work in process, Sept. 1 $ 243,400

Started into production

Total costs $

Cost Reconciliation Schedule

Costs accounted for

Completed and transferred out $

Work in Process Inventory, September 30:

Materials $

Conversion costs 66,000

Total costs $1,104,000