PROCESS COST ACCOUNTING questions homework

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Description

Ex. 161

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.

Physical Units

Equivalent Units

Materials

Conversion Costs

Completed and transferred
out

40,000

Ending work in process

Materials

Conversion costs, 75% complete

18,000

Total units

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*18,000 ÷ .75

Ex. 162

The
general ledger of Oates Company has the following work in process account. WORK
IN PROCESS—FINISHING

6/1

Balance

8,000

6/30

Transferred out ?

6/30

Materials

1,800

6/30

Labor

2,400

6/30

Overhead

3,350

6/30

Balance

?

Production
records show that there were 2,000 units in beginning inventory, 50% complete;
5,000 units started, and 4,500 units transferred out. The beginning work in
process had conversion costs of $ 3,700. The units in ending inventory were 60%
complete. Materials are added at the beginning of the process.

Instructions

Answer the following questions.

(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 inventory?

(

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Ex. 163

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 $133,000 in conversion costs were charged to the
department. The beginning work in process inventory was $108,000 on July 1,
comprised of $80,000 of materials costs and $28,000 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

90,000 units

Ending work in process inventory,
7/31

10,000 units

(20% complete)

Instructions

Answer the following
questions and show computations to support your answers.

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 90,000 units that were transferred out of the process in July?

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

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Ex. 164

The Finishing Department of Edwards
Manufacturing has the following production and cost data for July:

1. Transferred out, 3,000
units.

2. Started 5,000 units that
are 40% completed at July 31.

3. Materials added, $32,000;
conversion costs incurred, $12,500.

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. 165

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 $125,000, $95,000 of
which were materials costs. During March, the following occurred:

Materials added

$230,000

Conversion costs incurred

$129,000

Units completed and
transferred out in March

50,000

Units in ending work in
process March 31 (20% complete)

15,000

Process Cost
Accounting 21 – 39

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Ex.
165
(cont.)

Instructions

Answer the following
questions and show the computations that support your answers.

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. 166

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

2,800

Overhead

12,400

During this first month of
operations, 4,000 units were started into production; 3,500 units were
transferred out; and the remaining 500 units are 100% completed with respect to
materials and 60% complete with respect to conversion costs.

Instructions

Compute the following:

(a) Unit materials cost.

(b) Equivalent units of
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.

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Ex. 167

Grey Building Supplies’ total
materials costs are $40,000 and total conversion costs are $39,000. Equivalent
units of production for materials are 10,000, and 6,500 for conversion costs.

Instructions

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

Ex. 168

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

Transferred out

50,000
units

Ending work in process

6,000
units

The units in work in process are 100%
complete for materials and 60% complete for conversion costs. Materials costs
are $8 per unit and conversion costs are $11 per unit.

Instructions

Determine the costs to be
assigned to the units transferred out and the units in ending work in process.

Ex. 169

Production
costs chargeable to the Sanding Department in July in Magnum Company are
$20,000 for materials, $17,000 for labor, and $10,000 for manufacturing
overhead. Equivalent units of production are 25,000 for materials and 18,000
for conversion costs.

Instructions

Compute the unit costs for materials
and conversion costs.

Ex. 170

Poole
Manufacturing 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 on May 1 was 75% complete and
work in process on May 31 was 40% complete.

Instructions

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

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Ex. 170

(cont.)

POOLE MANUFACTURING COMPANY

Molding Department

Production
Cost Report

For the Month Ended May 31, 2008

QUANTITIES

Physical Units

Equivalent Units

Materials

Conversion Costs

Units to be accounted for

Work in process, May 1

16,000

Started into production

50,000

Total units

66,000

Units accounted for

Transferred out

46,000

Work
in process, May 31

20,000

Total
units

66,000

COSTS

Unit costs

Materials

Conversion Costs

Total

Costs in May

$198,000

$135,000

$

333,000

Equivalent units

Unit costs

$

$

$

Costs to be accounted for

Work in process, May 1

$

83,000

Started into production

250,000

Total costs

$

333,000

Cost Reconciliation Schedule

Costs accounted for

Transferred out

$

Work in process,
May 31

Materials

$

Conversion costs

Total costs

$

333,000

Ex. 171

Baker Winery manufactures 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 2008 are presented below:

Cost data

Beginning work in process inventory

$

37,000

($30,000 of
materials cost)

Materials

390,000

Conversion costs

153,000

Total costs

$

580,000

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Ex. 171

(cont.)

Production data

Beginning work in process (gallons)

10,000

(40%)

Gallons started into production

130,000

Ending work in process (gallons)

16,000

(25%)

Instructions

(a) Compute the equivalent
units of production.

(b) Determine the unit
production costs.

(c) Determine the costs to be
assigned to units transferred out and ending work in process.

Ex. 172

The Assembly Department of
Lynn Company has the following production and cost data at the end of May,
2008.

Production: 35,000 units started into
production; 25,000 units transferred out and 10,000 units 100% completed as to
materials and 40% completed as to conversion costs.

Manufacturing Costs: Materials added at
beginning of process, $70,000; labor, $100,000; overhead $74,000.

Instructions

Prepare a production cost report for
the month of May.

Ex. 173

Bunker
Company—Perth Division is a new state of the art production facility that
manufactures landing gear for airplanes. The ending September 30th work in
process is comprised of labor and overhead and is approximately 60% complete.
All materials are assumed to be 100% complete. Total materials costs during the
period totaled $910,000.

Instructions

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

21
– 46 Test Bank for Accounting
Principles, Eighth Edition

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Ex.
173
(cont.)

BUNKER COMPANY—Perth Division

Assimilation Department

Production Cost Report

For the Month Ended September 30, 2008

QUANTITIES

Physical Units

Equivalent Units

Materials

Conversion Costs

Units to be accounted for

Work in process, September 1

300

Started into production

1,000

Total units

1,300

Units accounted for

Transferred out

900

900

900

Work in process,
September 30

400

400

Total units

1,300

1,300

COSTS

Unit
Costs

Materials

Conversion Costs

Total

Costs in September

$910,000

$

$1,195,000

Equivalent units

Unit costs

$

$

$

250

Costs to be accounted for

Work in process, Sept. 1

$ 263,400

Started into production

Total
costs

$

Cost Reconciliation
Schedule

Costs accounted for

Transferred out

$

Work in process, September

Materials

$

Conversion costs

60,000

Total costs

$1,195,000

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PROCESS COST ACCOUNTING questions homework

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Description

BE 143

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

• Beginning work in process,
0 units

• Units transferred out,
35,000

• Units in ending work in
process, 4,000, which 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.

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BE 144

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

• Beginning work in process,
2,000 units

• Units transferred out,
42,000

• Units in ending work in
process, 6,000, which are 80% 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.

145

The Kirkland Department of
Delta Manufacturing began the month of December with beginning work in process
of 4,000 units that are 100% complete as to materials and 30% complete as to
conversion costs. Units transferred out are 10,000 units. Ending work in
process contains 1,000 units that are 100% complete as to materials and 60%
complete as to conversion costs.

Instructions

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

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BE 146

White Supplies’ total
material costs are $50,000 and total conversion costs are $65,000. Equivalent
units of production for materials are 10,000, and 3,250 for conversion costs.

Instructions

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

BE 147

Apoly Manufacturing Company
has the following production data for January.

Ending Work in Process

Beginning

Units Started into

% Complete as
to

Work in Process

Production

Units

Conversion Cost

-0-

6,500

700

30%

Instructions

Compute the physical
units for January.

BE 148

Sandusky Widget Company has
the following production data for March.

Ending Work in Process

Month

Beginning

Units

% Complete as
to

Work in Process

Transferred Out

Units

Conversion Cost

March

1,200

5,100

800

20%

Process Cost
Accounting 21 – 27

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BE 148

(cont.)

Instructions

Compute the physical
units for March.

BE 149

Sequal Company has the
following production data for June: units transferred out 46,000, and ending
work in process 4,000 units that are 100% complete for materials and 30%
complete for conversion costs. Unit materials cost is $5 and unit conversion
cost is $11.

Instructions

Determine the costs to be
assigned to the units transferred out and the units in ending work in process.

Solution 149 (4 min.)

BE 150

Tomlinson Company has the
following production data for May:

• Beginning work in process,
0 units

• Units started, 62,000

• Ending work in process,
7,000 units that are 100% complete for materials and 60% complete for
conversion costs

• Unit materials cost, $7

• Unit conversion cost, $10

Instructions

Determine the costs to be
assigned to the units transferred out and the units in ending work in process.

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BE 151

Dirt Cleaners, Inc. has the
following production data for January:

Transferred out

50,000
units

Ending work in process

6,000
units

The units in ending work in
process are 100% complete for materials and 60% complete for conversion costs.
There is no beginning work in process. Materials cost is $10 per unit and
conversion costs are $11 per unit.

Instructions

Determine the costs to be
assigned to the units transferred out and the units in ending work in process.

BE 152

Production costs chargeable
to the Sanding Department in July for Joyful Art are $12,500 for materials,
$26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of
production are 25,000 for materials and 18,000 for conversion costs.

Instructions

Compute the unit costs for
materials and conversion costs.

Process Cost
Accounting 21 – 29

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EXERCISES

Ex. 153

Baez Manufacturing Company
produces a product in two departments: (1) Mixing and (2) Finishing. The
company uses a process cost accounting system.

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

(b) Raw materials requisitioned
for production were:

Direct materials

Mixing department

$20,000

Finishing department

14,000

(c) Incurred labor costs of
$80,000.

(d) Factory labor used:

Mixing department

$48,000

Finishing department

32,000

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

Mixing department—600 machine hours at
$45 per machine hour.

Finishing department—500 machine hours
at $30 per machine hour.

(f) Units costing $66,000 were
completed in the Mixing Department and were transferred to the Finishing
Department.

(g) Units costing $60,000 were
completed in the Finishing Department and were transferred to finished goods.

(h) Finished goods costing
$30,000 were sold on account for $45,000.

Instructions

Prepare
the journal entries to record the preceding transactions for Baez Manufacturing
Company.


Ex. 154

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, $5,600. During the month the
following transactions occurred:

1. Purchased $45,000 of raw
materials on account.

2. Incurred $65,000 of factory
labor. Wages are unpaid.

3. Incurred $50,000 of
manufacturing overhead; $44,000 was paid and the remainder is unpaid.

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

Process Cost
Accounting 21 – 31

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Ex.
154
(cont.)

5. Used factory labor for
Finishing, $52,000 and Fabricating, $13,000.

6. Applied $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

Journalize the transactions
for the month.

Ex. 155

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 debits:

Cooking

Packaging

Beginning work in process

$ -0-

$ 6,000

Materials

40,000

21,000

Labor

21,000

9,000

Overhead

25,000

14,000

Costs transferred in

50,000

Instructions

Journalize the February
transactions that involved the work in process accounts.

21 – 32 Test Bank for Accounting Principles, Eighth
Edition

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Ex. 156

Benson
Industries uses a process cost system. Products are processed first by
Department A, second by Department B, and then they are 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

$40,000

Direct labor

11,000

Manufacturing overhead

19,000

70,000

Total costs charged to
Department B in October

$190,000

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 has been determined to be $30,000.

Instructions

Prepare journal entries to 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 warehouse.

Process Cost
Accounting 21 – 33

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Ex. 157

Hardy Company manufactures
a single product by a continuous process, involving two production departments.
The records indicate that $120,000 of direct materials were issued to and
$200,000 of direct labor was incurred by Department 1 in the manufacture of the
product. The factory overhead rate is $15 per machine hour; machine hours were
6,000 in Department 1. 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

Prepare entries to 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. 158

Muffy Painting Company has
the following production data for March.

Ending Work
in Process

Month

Beginning

Units

% Complete as to

Work in Process

Transferred Out

Units

Conversion Cost

March

2,000

42,000

8,000

80%

Instructions

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

21
– 34 Test Bank for Accounting
Principles, Eighth Edition

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Ex. 159

The Nitrogen Fixation
Department of Tomco Manufacturing began the month of December with beginning
work in process of 4,000 units that are 100% complete as to materials and 30%
complete as to conversion costs. Units transferred out are 10,000 units. Ending
work in process contains 3,000 units that are 100% complete as to materials and
60% complete as to conversion costs.

Instructions

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

Ex. 160

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

Month

Percentage

Units
Completed

Percentage

Units

Completed

and
Transferred Out

Units

Completed

July

-0-

—

10,000

500

90%

Sept.

2,500

20%

9,000

4,000

70%

Process Cost
Accounting 21 – 35

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Ex.
160
(cont.)

Instructions

(a) Compute the physical units
for July.

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

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