CHP 8: Process Costing

Department A's beginning work in process conversion costs were $6,675. During the month, total conversion costs were $32,700. Total equivalent units were 10,000 for materials and 7,500 for conversion costs. The cost per equivalent unit for conversion costs using the FIFO method equals Blank______.

$4.36

Which of the following are included in Section 5 of the production cost report when using FIFO costing?

-Costs of ending work-in-process inventory. -Costs of units started and completed in the current period. -Costs to complete beginning inventory.

Which of the following are true?

-Process costing does not maintain a record of the cost of each unit produced. -Process costing generally has lower recordkeeping costs than job costing.

Which of the following sections of the production cost report focus on managing the physical flow of units?

-Section 1 -Section 2

Which of the following sections of the production cost report focus on managing costs?

-Section 3 -Section 4 -Section 5

Which of the following are true of process costing?

-Weighted-average costing adds the costs together first and then divides this total cost by the total work for the two periods. -FIFO costing keeps the costs and the work separate and, in effect, computes separate unit costs for the two periods.

Process costing assumes that Blank______.

-all units are homogeneous -all units follow the same path through the production processes

Prior department costs are Blank______.

-also called transferred-in costs -conceptually equivalent to raw materials costs -generally excluded for performance evaluation purposes -often excluded when comparing actual department costs with budgeted costs

Advantages of FIFO costing over weighted-average costing include Blank______.

-inventory numbers are more likely to reflect reality -it is easier to identify and manage current period costs

The costs of units transferred out of one department and into another are Blank______.

-relatively easy to calculate -called prior department costs

The production cost report Blank______.

-summarizes the production and cost results for a period -includes the five steps for assigning costs to goods transferred out and to ending work-in-process inventory

FIFO costing Blank______.

-transfers out costs in beginning inventory in a lump sum -separates current period costs from those in beginning inventory

Department XY started the month with 1,000 units in work in process that were 100% complete as to materials and 70% complete as to conversion costs. During the month, 12,000 units were started, and 9,000 units were completed and transferred to Department ZT. The ending work in process units in Department XY are 100% complete as to materials and 40% complete as to conversion costs. Equivalent units of production for Department XY using FIFO costing equals Blank______

12,000 units for materials and 9,900 units for conversion costs

Department A's beginning work in process for materials cost totaled $15,000. Current material costs for the month equal $90,000, and there are 5,000 equivalent units. Material cost per equivalent unit using FIFO costing is $. (Enter your answer as a whole number.)

18

Department A's beginning work in process cost for materials totaled $15,000. Current material costs for the month are $90,000 and there are 5,000 equivalent units. Material cost per equivalent unit using weighted-average costing is $. (Enter your answer as a whole number.)

21/21.00

The final step in the costing process is to Blank______.

assign product costs to batches of work

Process costing can Blank______.

be adapted to reflect production flows that are not totally homogeneous

Direct labor is sometimes treated as part of manufacturing overhead because it is Blank______.

a small portion of total product cost

The key difference between operations costing and job and process costing is that Blank______ are different.

direct materials

The key difference between operation costing and job and process costing is that for each work order or batch passing through a particular operation, Blank______.

direct materials are different but conversion costs are the same

Prior department costs are included in department product cost calculations for Blank______.

inventory valuation only