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Exam 3: Process Costing

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Question 71

Multiple Choice

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In a process costing system with three departments, when items are sold, the cost of the items is moved from

A) Work in Process to Finished Goods.
B) Work in Process to Cost of Goods Sold.
C) Cost of Goods Sold to Finished Goods.
D) Finished Goods to Cost of Goods Sold.

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Question 72

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Rally Gifts uses process costing. In its Forming Department, all the materials are added at the beginning of processing. At the end of the year, 6,000 units remain in Work in Process inventory in the department. During the year, 54,000 units were completed and transferred out and 55,000 units were started. How many equivalent units will be used in the cost per equivalent unit calculation for material costs?

A) 61,000 units
B) 54,000 units
C) 60,000 units
D) 48,000 units

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Question 73

Multiple Choice

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Cheese Heads Cheddar utilizes a process costing system. The beginning Work in Process Inventory in the Cutting Department consisted of 16,000 units which were 100% complete with respect to materials and 20% complete with respect to conversion costs. The ending Work in Process Inventory consisted of 12,000 units which were 100% complete with respect to materials and 50% complete with respect to conversion costs. The total cost in beginning inventory was $65,000 with an additional $270,400 added during the period. During the month, 62,000 units were transferred out to the next department. The equivalent cost per unit was $1.50 for materials and $3.30 for conversion costs. How much is the total cost of the inventory transferred out during the period?

Hanover Glassware produces crystal serve ware and uses process costing. At the start of May, 2,300 units were in process. During May, 11,000 units were completed and 2,000 units were in process at the end of May. The units in process at the end of May were 80% complete with respect to material and 30% complete with respect to conversion costs. Other information is as follows: $\begin{array}{cr}\text { Work in process, May } 1 \text { : }\\\text { Direct material } & \$ 28,800 \\\text { Conversion costs } & 48,000 \\\text { Costs incurred during May: } & \\\text { Direct material } & \$ 198,000 \\\text { Conversion costs } & 242,000\end{array}$ How much is the cost per equivalent unit for direct materials?

Sanchez, Inc. uses process costing. Equivalent units for its Molding Department totaled 18,600 during January for conversion costs. 15,000 units were transferred out of the Molding Department to the Finishing Department during the month. If the items remaining in ending Work in Process inventory are 40% complete as to conversion costs and 80% complete as to materials, how many physical units are there in ending Work in Process inventory in the Molding Department?

Realm Company uses process costing and had an equivalent cost of $2.30 per unit for direct materials and $1.80 per unit for conversion costs during May in its Rolling Department. There were 11,600 units completed and transferred to finished goods, and 1,000 units in ending Work in Process inventory for the Rolling Department that were 80% complete with respect to direct material and 60% complete with respect to conversion costs. How much is ending Work in Process in the Rolling Department?

Which of the following describes the differences between job-order and process costing?

America Productions uses a process costing system. Its Belting Department's Work in Process inventory account at March 31 consists of 7,000 units that are 100% complete with respect to materials and 70% complete with respect to conversion costs. If the total conversion cost in the Work in Process inventory account is $552,000 and the cost per equivalent unit for conversion costs is $6.00, how many units were completed and transferred out?

Heinz Bottling Company produces various glass and plastic containers and uses a process costing system. The following information relates to production in the Formulating Department during January for the company's 2-quart size glass jars: .Beginning Work in Process inventory: 4,500 units, 85% complete as to conversion costs .Beginning Work in Process inventory-cost of direct materials, $18,000 .Beginning Work in Process inventory-costs of conversion, $14,000 .Number of jars started in January: 270,000 units .Ending Work in Process inventory: 2,000 units, 35% complete as to conversion .Direct materials added during January: $78,075 .Conversion costs incurred during January: $40,700 Direct materials are added at the beginning of the Formulating process, and conversion costs are incurred uniformly throughout production. How much is the cost per equivalent unit for materials?

Keystone Snow Boards Manufacturing Company produces entry-level snowboards and uses process costing. All materials are added at the start of the process. The following information on units is available for September production for the company's Cutting Department: $\begin{array}{lr}\text { Beginning Work in Process, 30\% complete for conversion costs } & 14,000 \\\text { Units started } & 125,000 \\\text { Ending Work in Frocess, 60\% complete for conversion costs } & 15,000 \\\text { Units completed } & 124,000\end{array}$ The following costs are available for September: $\begin{array}{lrrr}&\text { Material }&\text {Conversion Cost }&\text {Total Cost }\\\text { Beginning Work in Process } & \$ 8,200 & \$ 1,350 & \$ 9,550 \\\text { Current cost } & \underline{70,600} & \underline{47,120} & \underline{117,720} \\\text { Total cost } & \underline{\$ 7,800} & \underline{\$ 48,470} & \underline{\$ 127,270}\end{array}$ Assume equivalent units for materials are 157,600 units. How much is the cost per unit for materials?

Material is generally added evenly throughout the production process.