Quiz 6: Process Costing

Business

The information about Lamont Company is given in the question. The cost incurred by the company in May is given. Given: img 1.The costs transferred out of each department are calculated as follows: img The costs transferred out of molding departmen t is img The costs transferred out of grinding department is img The costs transferred out of finishing department is img 2.The journal entries corresponding to these transfers are as follows: img Cost-added entry (Grinding only): img 3.If the grinding department had an ending WIP of $12,000 then, the cost transferred would become, img img The journal entry is: img Finished goods are reduced by $12,000.

Process: A process is a series of activities (operations) that are linked to perform a specific objective. For example, B Company, a manufacturer of wide variety of over-the-counter medications vitamins, uses process costing in its plants. Its different processes for production of one of the medications are given as under: Example: img Blending, encapsulating bottling are the three processes. Each process consists of four linked activities as described above.

Lising Therapy performs electro-mechanical treatments for its patients. The information of the cost and output is given. Given: img 1.The cost per treatment for April is, img 2.The cost of services sold for April is, img 3.If the overhead is reduced by 20% then Reduction in unit cost (profit change)  img

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