# Managerial Accounting

## Quiz 4 :Process Costing

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Equivalent Units-Weighted-Average Method Societe Clemeau. a company located in Lyons. France, manufactures cement for the construction industry. Data relating to the kilograms of cement processed through the Mixing Department, the first department in the production process, are provided below for May: Required: 1. Compute the number of kilograms of cement completed and transferred out of the Mixing Department during May. 2. Compute the equivalent units of production for materials and for conversion for May.
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What is meant by the term equivalent units of production when the weighted-average method is used
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Equivalent units of production
" The number of units transferred to the next department and the equivalent units in the ending work in process inventory".
Equivalent units
" Partially completed number of units multiplied with percentage completion of those units".
Partially completed units are, the units not fully completed in all respects.
Completion percentage calculated as a measure for completing the units.
Equivalent units of production
The calculation can be done using the following formula:

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Assume that a company has two processing departments-Mixing and Firing. Prepare a journal entry to show a transfer of work in process from the Mixing Department to the Firing Department.
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The Journal entry for transfer of work in process from the mixing department to Firing Department will be as given below:
This entry is made at the end of the period.

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Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method Kalox, Inc., manufactures an antacid product that passes through two departments. Data for May for the first department follow: The beginning work in process inventory was 80% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 20% complete with respect to labor and overhead. Required: Assume that the company uses the weighted-average method of accounting for units and costs. 1. Compute the equivalent units for May's activity for the first department. 2. Determine the costs per equivalent unit for May.
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Applying Costs to Units-Weighted-Average Method Data concerning a recent period's activity in the Prep Department, the first processing department in a company that uses process costing, appear below: A total of 1,300 units were completed and transferred to the next processing department during the period. Required: Compute the cost of the units transferred to the next department during the period and the cost of ending work in process inventory.
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Cost Reconciliation Report-Weighted-Average Method Lech-Zurs Bakerie Corporation uses a process costing system. The Baking Department is one of the processing departments in its apple strudel manufacturing facility. In July in the Baking Department, the cost of beginning work in process inventory was $4,830, the cost of ending work in process inventory was$1,120, and the cost added to production was $25,650. Required: Prepare a cost reconciliation report for the Baking Department for July. Essay Answer: Tags Choose question tag In what ways are job-order and process costing similar Essay Answer: Tags Choose question tag Comprehensive Exercise; Second Production Department-Weighted-Average Method Papyrutech Corporation produces fine papers in three production departments-Pulping, Drying, and Finishing. In the Pulping Department, raw materials such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. The result is a thick slurry of fibers. In the Drying Department, the wet fibers transferred from the Pulping Department are laid down on porous webs, pressed to remove excess liquid, and dried in ovens. In the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The company uses the weighted-average method in its process costing system. Data for October for the Drying Department follow: No materials are added in the Drying Department. Pulping cost represents the costs of the wet fibers transferred in from the Pulping Department. Wet fiber is processed in the Drying Department in batches; each unit in the above table is a batch, and one batch of wet fibers produces a set amount of dried paper that is passed on to the Finishing Department. Required: 1. Determine the equivalent units for October for pulping and conversion. 2. Compute the costs per equivalent unit for October for pulping and conversion. 3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Finishing Department in October. 4. Prepare a cost reconciliation report for the Drying Department for October. Essay Answer: Tags Choose question tag Process Costing Journal Entries Schneider Brot is a bread-baking company located in Aachen, Germany, near the Dutch border. The company uses a process costing system for its single product-a popular pumpernickel bread. Schneider Brot has two processing departments-Mixing and Baking. The T-accounts below show the flow of costs through the two departments in April (all amounts are in the currency euros): Required: Prepare journal entries showing the flow of costs through the two processing departments during April. Essay Answer: Tags Choose question tag Cost Per Equivalent Unit-Weighted-Average Method Billinstaff Industries uses the weighted-average method in its process costing system. Data for the Assembly Department for May appear below: Required: 1. Compute the cost per equivalent unit for materials, for labor, and for overhead. 2. Compute the total cost per equivalent whole unit. Essay Answer: Tags Choose question tag How many Work in Process accounts are maintained in a company that uses process costing Essay Answer: Tags Choose question tag Assume that a company has two processing departments-Mixing followed by Firing. Explain what costs might be added to the Firing Department's Work in Process account during a period. Essay Answer: Tags Choose question tag Process Costing Journal Entries Arizona Brick Corporation produces bricks in two processing departments-Molding and Firing. Information relating to the company's operations in March follows: a. Raw materials were issued for use in production: Molding Department,$28,000: and Firing Department, $5,000. b. Direct labor costs were incurred: Molding Department.$18,000; and Firing Department, $5,000. c. Manufacturing overhead was applied: Molding Department,$24,000; and Firing Department, $37,000. d. Unfired, molded bricks were transferred from the Molding Department to the Firing Department. According to the company's process costing system, the cost of the unfired, molded bricks was$67,000. e. Finished bricks were transferred from the Firing Department to the finished goods warehouse. According to the company's process costing system, the cost of the finished bricks was $108,000. f. Finished bricks were sold to customers. According to the company's process costing system, the cost of the finished bricks sold was$106,000. Required: Prepare journal entries to record items (a) through (f) above.
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Under what conditions would it be appropriate to use a process costing system
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Why is cost accumulation simpler in a process costing system than it is in a job-order costing system
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Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method Solex Company produces a high-quality insulation material that passes through two production processes. Data for June for the first process follow: Required: 1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for June for the first process. 2. Compute the costs per equivalent unit for June for the first process. 3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in June.
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Computation of Equivalent Units-Weighted-Average Method Lindex Company uses a process costing system. The following data are available for one department for October: The department started 390,000 units into production during the month and transferred 410.000 completed units to the next department. Required: Compute the equivalent units of production for October, assuming that the company uses the weighted-average method of accounting for units and costs.
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Cost Assignment; Cost Reconciliation-Weighted-Average Method Kenton Industrial Corporation uses the weighted-average method in its process costing system. During April, the Baker Assembly Department completed its processing of 18.000 units and transferred them to the next department. The cost of beginning inventory and the costs added during April amounted to \$855,000 in total. The ending inventory in April consisted of 1.500 units, which were 909c complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending inventory for the month. 2. Compute the cost of ending inventory and of the units transferred to the next department for April. 3. Prepare a cost reconciliation for April. (Note: You will not be able to break the cost to be accounted for into the cost of beginning inventory and costs added during the month. )
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