Chapter 17 - Process Cost Systems

For the month of September, Florida, Inc., incurs a direct materials cost of $12,000 for 7,500 gallons of strawberry lemonade produced in its Mixing Department. It also incurs conversion costs of $6,000 with 80% completed. If the conversion cost per equivalent unit was $1.15 per gallon in August, what is the difference in the conversion cost per equivalent unit between the two months?

$0.15

Libby Company manufactures a single product by a continuous process, involving the production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $160,000, $125,000, and $150,000, respectively.The journal entry to record the cost of direct labor for the period is

Work in Process—Department 1125,000 Wages Payable125,000

The yield is the ratio of

the quantity of materials output to the quantity of materials input.

Department Z had no work in process at the beginning of the period, 18,000 units were started during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (assuming the company uses FIFO): Direct materials$80,100Direct labor102,300Factory overhead37,140 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the units completed during the period?

$205,600

Which of the following measures would not help managers to control and improve manufacturing operations?

Commissions paid per time period

During the current month, Grey Company sold 60,000 units for $10 each. Each unit had an equivalent cost of $6 each. The journal entry to record the sale would include which of the following?

Cost of Goods Sold360,000 Finished Goods360,000

Which of the following products would use a process cost system?

Gasoline

Guardino Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.The journal entry to record the flow of costs into Department 1 during the period for factory overhead is

Work in Process—Department 1150,000 Factory Overhead—Department 1150,000

The cost of production report may include all of the following except

advertising costs.

The last step in preparing a cost of production report is

allocating costs to units transferred out.

The second step in preparing a cost of production report is

computing the equivalent units of production.

Conversion costs are comprised of

direct labor and factory overhead.

The cost of production report may be used for all the following except analyzing the change in

general and administrative costs per equivalent units between periods.