| 1. Under what conditions would it be appropriate to use a process costing system? 2. What similarities exist between job-order and process costing? | 3. Coéts are accumulated by job in a job-order costing system; how are costs accumulated ina + process costing system? 4, What two essential features must characterize any processing department? Da tinguish between departments arranged in a sequential pattem and departments arranged int al spall pattem, 6. Why is cost accumulation easier under a process costing system than it is under a job-order : ting’system? | 7. How many Work ii’Process accounts are maintained in a company using process costing? | 8.) Afsiime that a company has two processing departments, mixing and firing, Prepare a journal Leg try to show a transfer of partially completed units from the mixing department to the firing | -partinent.! ame again that a company has two: processing departments, mixing and firing. Explain pint gost might be: added to the firing department's Work in Process account’ during a : Bat ven ed what do the kent equivalent units of production mean? Inder 'the wweighted-average method; what assumption is made relative to units in the beginning work in process inventory when equivalent units and unit costs are computed? does the computation: of. equivalentsunits under*the FIFO method differ from the computation of equivalent units under the weighted-average method? . Whit is a quantity schedule, and what purpose does it serve? 5 . On'the cost reconciliation part of the production report, the weighted-average method treats j “all'units transferred out in the same way. How does this differ from the FIFO method of adling units transferred out? |15, Under processinig costing, it is often suggested that a product is like a rolling snowball as it | loves from department to department. Why is this an apt comparison? 16. From the standpoint of cost control, why is the FIFO method superior to the weighted- <4, | | .;:average method? 5 Bebe ily | exbrcises! E> | E~—1) Compute the equivalent tinits of production for each of the following independent cases |. undoy/ FIFO method and Average method of costing, \ : |S) dnprocess, beginning 1/5 completed 10,000 units 1 il ||'Started in process 50,000 units 7 i | | Finished and transferred 35,000 units: J | | Jn process, ending 2/5 completed « 1b) In process, beginning 1/4 completed 12,000 units V/8-completed 8,000 units ; { oo Started in process 50,000-urits Bog || Finished nid transferre 40,000 units | \Inprocess, ending . 1/6 completed 2 ~ foe 102 EEE| For each of the following independent cuses compute the equivalent unit of production ‘wih supporting computation for missing items under FIFO method of costing: | eee nen ine ecinin 2/5 completed the 1 { 3/5 completed t 4) 2/5 completed Slated i in process |; “injshed and transferred | roe, end 1/2 is 4/5 completed ‘balance is 1/2 completed .)| In process, beginning 1/3 completed | |Started in process. inished and transferred . In process, ending’ 1/5 completed ul ih seccess, begininiig 1/4 incomplete started in’process | rocess, ending 1/4 complete’ remaining units represent 25% ofthe total units completed), i Siatted in proves Finished and transferred (The work in process at the beginning is twice'as much as the work in process at the end and their stages of completion are 3/4 ‘and 1/6 respectively). i )/ Started in process * ‘Finished and transferred | (The work in process at the end || ofthe period is only 75% of ' \work in process at the beginning” land its stages of completion fe 4/5 and 1/2, respectively). 1, dd) | Started in process In process, ending % incomplete Of the finished and transferred units, 3/5 represent work in process at the beginning which | were 2/3 completed during the ‘current period). 103 10,000 units 10,000 units 5,000 units 40,000 units 45,000 units 2 44,000 units 30,000 units 20,000 units ? 12,000 units 4,000 units 20,000 units 32,000 units 12,000 units 19,000 units 24,000 units 16,000 units¢) | In process, beginning 1/2 completed 9,000 units Started in process 12,000 units Transferred out : 6,000 units In process,end . » 5/6 completed 2 ‘| In process, beginning 5/8 completed 2 Started in process 10,000 units Finished and transferred out 8,000 units \Finished and on hand 1,600 units Tn process, ending 4/5 completed 16,400 units | 4 | 35% on the fifth day ied uniformly. ‘Received from Department’ || Finished and transfered 40% during the last four days sa Ii process, beginining 30% complete 10% on the first day of the process 15% during the next three days In process eriding 8 days processed ‘Department B applies material on installment basis described below: — Y : hiv. ¢ production for Department B showed the following: 12,000 units 50,000 units 40,000 units ” a Department M applies material cost on installment basis as follows: 40% at the start ofthe process te 25% when the process is 60% completed 15% when the process is 75% completed 2 ‘when the process is 100% completed l¢ processing period in this department-covers:ten’(10) days and conversion cost are ompute the equivalent units of production for materials anid. conversion costs. it ' mad The department's production data for October and November 2000 were: Yt *. October ‘November | In process beginning, none 2 i | Finished and tronsferred. 32,000 35) no | 1 Received from Dept. L 35,000 ‘i ie In process efiding 2 5200 ; Stage of completion . 25% 65% Note: Conversion cost are applied uniformly throughout the process Compute the equivalent production for Material and Conversion cost for October Requir i * & November, 204bred: 1 ih Conversion ost are applied uniformly throughout the process ied Compute the equivalent production for material and conversion cost for October | @November. DEPARTMENTS : AL —a_ In process, December 1 10,000 $,000 Stage of completion 40% 10% Started in process 20,000 25,000 In process, December 31 - 2 10,000 , Stage of completion 60% 60% Hinent A applies materials 100% at the start of the process while Department B applies a ee O09 at the end of the process. In both departments conversion cost. are applied nif nly. en | Compute the equivalent units of production for department A & B. Using the same production data in number $ above compute the equivalent unit of reuson for Departments A and B under the following assumption, 0% of materials are ‘ process is 1/2 compl fi 1 | Dept. B= 60% of matenats tha end of the process ry | gn’ both departments, conversion cost are applied uniformly throughout the process. 7. ‘Triple Point, Inc., uses process costing to account for the costs of its only Product D. {| Production takes place in three departments: Fabrication, Assembly and Packaging. At the end of the fiscal year, June 30 the following inventory of Product Dis ‘on hand: 1) No unused raw materials or packaging material © b) Fabricetion Deparment: 300 units, 1 complete as to raw material and 12 fet complete as to direct labor. @.) Assembly Department: 1,000 uniis 2/5 complete as to direct labor. 4) Packaging Department: 100 units 3/4 complete as to packaging materials and 1/4 complete as to direct labor. e.) Shipping Arce: 400 units. J at start of the process, 30% when the ce at the end of the process. the start of the process, and 40% at the ; Using FIFO method of costing, compute the following: 1.) The number of equivalent units of raw materials in all inventories at June 30. | 2.) The number of equivalent units of febrication department direct labor in . all inventories at June 30. . 105 :3.) The number of equivalent units of packing material in all inventories at s June 30, ‘18. hs Company’ has process cost system using FIFO cost method. All materials are |. ||| introduced at the beginning of the process in Department I. The following information is | Jnadeevalable forthe month of July: fr In process, (40% complete | 2s to conversion) 500 units: || # Started in process 2,000 units 1) Transferred to Department il. 2,100 units || ©” Inprocess, January 31 (25% complete i ' to conversion) 400 init i | Hi red: one the EUP for the month of January for Materials and Conversion Cost. i ' 9! sing ithe data from E = “8, compute EUP under Weighted-Average Method, -: the pewee g data pertains to the Melting Department for August: fat th Jnits %4 of Completion get a i In nage, August 1 iam started 30% nits finished and transferred jaro, August 31 100% 80% ocess und Material Q is udded when incurred uniformly throughout the process. : Compute EUP for Material A and Material Q for the month of August. | COST OF PRODUCTION REPORT ~ FIFO. In March, Department B transferred to |. Department C, $0,000 units costing P 150,000. In eddition to the above, Department C ") ‘provided the following data: |p. . > Inprocess, beginning | $,000 units (1/5 completed) —P 15,670 ‘ i 3,000 units (5/6 completed) — P 10,269 |.) During’ the month, "Department C transferred to stockroom 48,000 units, while 1,000 units are finished and on hand. Reminder is divided as follows: one-third is 40% complete + two-thirds are 60% complete Cost iathered during the month consist of materials P 15,240, labor P 5,030; and overhead P 6,036, Labor andOverhead are applied uniformly to production. Required: Cost of Production Report under the.following independent cases. 206