Smartbook Ch 6

Direct materials costs in beginning work-in-process totaled $100,000 and beginning work-in-process conversion costs were $200,000. Current costs added are $202,500 for materials and $659,750 for conversion. Given 15,000 equivalent units for materials and 13,000 equivalent units for conversion, the cost per equivalent unit for conversion using the FIFO method is ______.

$50.75 Reason: $659,750÷13,000 = $50.75

Direct materials costs in beginning work-in-process totaled $100,000 and beginning work-in-process conversion costs were $200,000. Current costs added are $202,500 for materials and $659,750 for conversion. Given 15,000 equivalent units for materials and 13,000 equivalent units for conversion, the cost per equivalent unit for materials using the FIFO method is ______.

$13.50 Reason: $202,500÷15,000 = $13.50

A juice manufacturer has 50,000 gallons of juice in process at the beginning of the month. By month's end 25,000 gallons were complete, 20,000 gallons were 60% complete and 5,000 units were 40% complete. Equivalent units equals ______ gallons.

39,000 Reason: 25,000 + 20,000 × 60% + 5,000 × 40% = 39,000 gallons

Which of the following statements regarding process costing are true?

Completed goods are transferred to Finished Goods inventory. A separate work-in-process account is maintained for each production department.

Process costing methods include ______.

FIFO weighted-average

True or false: Both the physical flow and the cost flow of goods are affected by the processing costing method chosen.

False

Units to account for equals the sum of the units in ______.

beginning inventory plus the number of units started during the period

The process costing method(s) that includes only current period costs when calculating unit cost is (are) ______.

only FIFO

Units that are completed and transferred from a production department and units in ending work-in-process are called __________ units.

output

The key document in a typical process costing system is the _______ _________ report.

production cost

Equivalent units should ______ be calculated separately for direct materials, direct labor, and factory overhead.

sometimes

Process costing methods include ______.

weighted-average FIFO

The process costing method(s) that includes both prior period and current period costs when calculating unit cost is (are) ______.

weighted-average only

A company had 2,000 units of work-in-process beginning inventory that were 50% complete for materials and conversion costs. Ending work-in-process units are 100% complete for materials and 40% complete for conversion. During the period 30,000 units were started and 27,000 were completed. The number of equivalent units for conversion using the FIFO method is ______.

28,000 Reason: Ending WIP = 30,000 + 2,000 - 27,000 = 5,000 EU(conversion) = 27,000 + 40% × 5,000 - 2,000 × 50% = 28,000

Given 5,000 units in beginning work-in-process, 3,000 units in ending work-in-process, 25,000 units started and 27,000 completed units, the number of units to account for is ______.

30,000 Reason: 5,000 + 25,000 = 30,000

A company had 2,000 units of work-in-process beginning inventory that were 50% complete for materials and conversion costs. Ending work-in-process units are 100% complete for materials and 40% complete for conversion. During the period 30,000 units were started and 27,000 were completed. The number of equivalent units for materials using the FIFO method is ______.

31,000 Reason: Ending WIP = 30,000 + 2,000 - 27,000 = 5,000 EU(materials) = 27,000 + 100% × 5,000 - 2,000 × 50% = 31,000

A company started the month with 8,000 units in beginning inventory that were 70% complete as to materials and 40% complete as to conversion costs. During the month those units were completed and another 30,000 units were started in production. At the end of the month 6,000 of the 30,000 units are still in process. The ending work in process is 80% complete as to materials and 60% complete as to conversion costs. Calculate the equivalent units for materials under the FIFO method.

31,200 units Reason: Units started and finished = 30,000 - 6,000 = 24,000 8,000 × 30% + 24,000 + 6,000 × 80% = 31,200

A company started the month with 8,000 units in beginning inventory that were 70% complete as to materials and 40% complete as to conversion costs. During the month those units were completed and another 30,000 units were started in production. At the end of the month 6,000 of the 30,000 units are still in process. The ending work in process is 80% complete as to materials and 60% complete as to conversion costs. Calculate the equivalent units for conversion costs under the FIFO method.

32,400 units Reason: Units started and finished = 30,000 - 6,000 = 24,000 8,000 × 60% + 24,000 + 6,000 × 60% = 32,400

For the purpose of computing equivalent units of production, most process industries combine factory overhead and direct labor and call them _________ __________.

conversion costs

The production cost report summarizes ______.

cost assigned to completed units costs incurred during the period physical and equivalent units of a department

Equivalent units are the number of same or similar complete units that ______.

could have been produced given the work actually performed

In process costing, conversion costs are ______.

direct labor and factory overhead

Firms that use process costing ______.

engage in the continuous production of a few similar products

In process costing, unit product cost is calculated by dividing process costs in each department by the number of ________.

equivalent units produced

Beginning work-in-process and all units that enter a production department during an accounting period are called ______ units.

input

The physical flow of units ______.

is always the same under the FIFO and weighted-average methods

The category of transferred in costs appears in ______.

work-in-process for all departments except the first