ACCT 2220 CH 3

A process with no beginning work in process, completed and transferred out 95,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:

110,000 equivalent units.

Multiple Choice Question 106 Department 1 of a two department production process shows: Units Beginning Work in Process 10,000 Ending Work in Process 50,000 Total units to be accounted for 160,000 How many units were transferred out to Department 2?

110,000.

In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, transferred out 16,000 units, and had an ending work in process of 3,000 units. How many units were started by Moyer during the month?

13,000.

The Mixing Department's output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete as to materials and conversion costs. Beginning inventory is 1,000 units, 40% complete as to materials and conversion costs. Assuming the weighted-average method, the equivalent units of production are

23,000. ANSWER: The equivalent units of production is the sum of units completed and transferred out (20,000) and the equivalent units of ending work in process inventory (5,000 units X 60%) or 20,000 + 3,000 = 23,000 units.

Stock Company has 2,000 units in beginning work in process inventory, 20% complete as to conversion costs, 23,000 units transferred out to finished goods, and 3,000 units in ending work in process 33 1/3% complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. Equivalent units for materials and conversion units are, respectively

26,000, 24,000. ANSWER: The equivalent units for materials are 26,000 (23,000 units transferred out plus 3,000 in ending work in process inventory). The equivalent units for conversion costs are 24,000 (23,000 transferred out plus 33 1/3% of the ending work in process inventory or 1,000).

Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending work in process at 80% completion and 28,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?

26,000.

A process with 1,600 units of beginning work in process, completed and transferred out 20,000 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. How much is equivalent units of production for the period for material costs?

28,000 equivalent units.

Using the data in 57, the equivalent units under the FIFO method for conversion costs are:

324,000. ANSWER: Equivalent units for conversion costs are: Beg. work in process (20,000 X 40%) 8,000 Units started and completed 300,000 Ending work in process (40,000 X 40%) 16,000 Total Equivalent Units 324,000

The Molding Department of the Smith Company has the following production data: beginning work in process 20,000 units (60% complete), started in production 340,000 units, completed and transferred out 320,000 units, and ending working process 40,000 units (40% complete). Assume materials are entered at the beginning of the process, the equivalent units under the FIFO method are:

340,000. ANSWER: Equivalent units for materials are: Units started and completed 300,000 Ending work in process (40,000 X 100%) 40,000 Total Equivalent Units 340,000

The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 425,000 units, completed and transferred out 400,000 units, and ending work in process 50,000 units (40% complete). Assuming materials are entered at the beginning of the process, equivalent units for materials are:

450,000.

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 July, there were no units in the beginning work in process inventory; 60,000 units were started into production in July; and there were 15,000 units that were 40% complete in the ending work in process inventory at the end of July. What were the equivalent units of production for conversion costs for the month of July?

51,000. ANSWER: Units of beginning work in process (0) + started into production (60,000) = 60,000 total units. Total units (60,000) - ending work in process units (15,000) = units transferred out (45,000). Units transferred out-conversion (45,000 x 100%) + equivalent units of ending work in process-conversion (15,000 x 40%) = equivalent units of production-conversion costs (51,000) ("Illustration 21-9", "Illustration 21-10" and "Illustration 21-11").

In RYZ Company, there are zero units in beginning work in process, 7,000 units started into production, and 500 units in ending work in process 20% completed. The physical units to be accounted for are

7,000. ANSWER: There are 7,000 physical units to be accounted for (0 units in beginning inventory + 7,000 units started).

Vintage Baskets had the following department data: Work in process, physical units, August 1 8,000 Completed and transferred out physical units 69,000 Work in process, physical units, August 31 6,000 Materials are added at the beginning of the process. Conversion costs are added evenly throughout the process. The incomplete units are 40% completed as to conversion costs. What is the total number of equivalent units for materials during August using the weighted-average method

75,000. ANSWER: Since 100% of materials is added at the beginning of process, total equivalent units for materials = 69,000 +6,000 = 75,000. Work in process, August 1 8,000 Started in production 67,000 Total units 75,000 Units transferred out 69,000 Work in process, August 31 6,000 Total units 75,000 Equivalent Units Materials Conversion Costs Units transferred out 69,000 69,000 Work in process, August 31 6,000 x 100% 6,000 6,000 x 40% 2,400 Total equivalent units 75,000 71,400

In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 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. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?

90,000 units.

Dartmouth Company has two process departments, machining and assembly, that produce products. At what point can the company add manufacturing overhead costs to the products?

As the production takes place in each of the two process departments.

Which one of the following occurs in a process cost system?

Costs are accumulated in a production cost report.

In computing equivalent units using the weighted-average method, the beginning work in process is part of the equivalent units of production formula.

False

Which of the following companies would most likely use process costing for the product or service it produces?

Friskies Cat Food - cans of tuna flavored food.

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

True

Managers can use the cost data in production cost reports to assess whether unit costs and total costs are reasonable.

True

The accumulation of the costs of materials, labor, and overhead is similar in job order and process costing.

True

Unit production costs are costs expressed in terms of equivalent units of production.

True

Marco Company has two processing departments and uses a process costing system. Which account is debited when the company assigns factory labor costs to production?

Work in Process is debited.

In a process cost system, manufacturing overhead

is assigned to a work in process account for each production department on the basis of a predetermined overhead rate.

Conversion costs are the sum of

labor costs and overhead costs.

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

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