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Exam 4: Process Costing

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Question 61

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Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied.In the first step of the allocation, the amount of Administration Department cost allocated to the Assembly Department is closest to:

A) $15,140
B) $27,000
C) $13,000
D) $19,000

E) B) and D)
F) None of the above

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Question 62

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Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Information Technology Department cost allocated to the two operating departments is closest to:

A) $26,880
B) $15,929
C) $58,119
D) $21,943

E) A) and C)
F) None of the above

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Question 63

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Activity in Saggers Corporation's Assembly Department for the month of March follows: The equivalent units for conversion for March, using the first-in, first-out method, are:

Krumbly Corporation uses the first-in, first-out method in its process costing system. At the beginning of the month, Department D's work in process inventory contained 2,000 units. These units were 100% complete with respect to materials and 40% complete with respect to conversion costs, with a total cost at that point of $13,600. During the month, conversion costs amounted to $8 per equivalent unit. If all 2,000 units are fully complete by the end of the month and transferred out of the department, the total cost of the 2,000 units transferred out will be closest to:

Normand Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for materials for the month in the first processing department?

The step-down method of allocating service department costs:

The following data have been provided by Cutts Corporation, which uses the weighted-average method in its process costing. The data are for the company's Shaping Department for October. Required:Compute the equivalent units of production for both materials and conversion costs for the Shaping Department for October using the weighted-average method.

Strzelecki Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Data concerning those departments follow: Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B.The total Operating Department Y cost after allocations is closest to:

Kurtulus Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: (Round "Cost per equivalent unit" to 3 decimal places. Round "Cost of ending work in process inventory" to the nearest whole dollar amount.)

Bistrol Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,400 units were started and 7,500 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 70% complete with respect to materials and 60% complete with respect to conversion costs.The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Carver Corporation uses the first-in, first-out method in its process costing system. The Assembly Department started the month with 2,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. An additional 66,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 9,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?

Parker Corporation has two service departments, Cafeteria and Engineering, and two operating departments. The number of employees in each department is given below: The costs of the Cafeteria are allocated to other departments on the basis of the number of employees in the departments. If these costs are budgeted at $69,375, the amount of Cafeteria cost allocated to Engineering under the direct method would be closest to:

The cost per equivalent unit for conversion costs will always be the same under both the first-in, first-out and the weighted-average methods if there is no beginning work in process inventory.

Kota Toy Corporation manufactures lizard dolls in two departments, Molding and Assembly. In the Molding Department, plastic is injected into a lizard-shaped mold. The dolls that come out of the molds are then transferred to the Assembly Department where hair is applied. Kota uses a weighted-average process cost system to collect costs in both departments.On January 1, the Molding Department had 4,000 dolls in process. These dolls were 100% complete with respect to direct materials and 70% complete with respect to conversion cost. During January, Molding completed 79,000 dolls. On January 31, Molding had 7,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 25% complete with respect to conversion cost.What account would Kota debit to record the transfer of dolls out of the Molding Department?

Clarks Corporation uses the first-in, first-out method in its process costing. The following data pertain to its Assembly Department for June. Required:Determine the equivalent units of production for the Assembly Department for June using the first-in, first-out method.

Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,800 units were started and 7,100 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 70% complete with respect to conversion costs.The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Cervetti, Incorporated, allocates service department costs to operating departments using the step-down method. The company has two service departments, Administration and Physical Plant, and two operating departments, Assembly and Testing. Data concerning those departments follow: Administration Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total Testing Department cost after allocations is closest to:

Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 12,000 units, 100% complete with respect to materials cost and 20% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $39,400. A total of 42,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $2.40 for materials and $4.50 for conversion costs. The total cost of the units completed and transferred out of the department was:

Malmedy Corporation uses the first-in, first-out method in its process costing system. The following data pertain to operations in the first processing department for a recent month: What was the cost per equivalent unit for materials during the month?

Maute Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total amount of Administrative Department cost allocated to the Adult Medicine Department is closest to: