1.Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
For each company, indicate whether the company is most likely to use job-order costing or process costing.
2.Job 827 was recently completed. The following data have been recorded on its job cost sheet:
|
Direct materials |
$61,050 |
|
Direct labor hours |
1,332 labor hours |
|
Direct labor wage rate |
$14 per labor-hour |
|
Machine Hours |
1,480 machine hours |
|
Number of units completed |
3,700 units |
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour.
3.Harmon Company uses the weighted-average method in its process costing system. The Curing Department of Harmon Company reported the following information for the month of November.
|
Units |
Percentage complete with respect to conversion |
|
|
Work in process, November 1 |
10,000 |
80% |
|
Units started |
28,000 |
|
|
Completed and transferred out |
30,000 |
|
|
Work in process, November 30 |
8,000 |
30% |
|
|
|
|
|
Costs for November |
Materials |
Conversion |
|
Work in process, November 1 |
$34,500 |
$48,600 |
|
Added during the month |
$146,000 |
$194,400 |
All materials are added at the beginning of the process.
Required: Compute the following items using the weighted-average method:
i. The equivalent units of production for materials.
ii. The cost per equivalent unit for conversion.
iii. The total cost assigned to units transferred out of the Curing Department during November.
iv. The cost assigned to work in process inventory as of November 30
4.Baroche Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.
|
Work in process, beginning: |
||
|
Units in process |
100 |
|
|
Percent complete with respect to materials. |
70% |
|
|
Percent complete with respect to conversion. |
40% |
|
|
Costs in in the beginning inventory: |
||
|
Materials cost |
$364 |
|
|
Conversion cost |
$1,120 |
|
|
Units started into production during the month |
23,000 |
|
|
Units completed and transferred out |
22,900 |
|
|
Costs added to production during the month: |
||
|
Materials cost |
$124,160 |
|
|
Conversion cost |
$637,088 |
|
|
Work in proccss, ending |
||
|
Units in process |
200 |
|
|
Percent complete with respect to materials |
80% |
|
|
Percent complete with respect to conversion |
70% |
|
Using the weighted-average method:
i. Determine the equivalent units of production for materials and conversion costs.
ii. Determine the cost per equivalent unit for materials and conversion costs.
iii. Determine the cost of units transferred out of the department during the month.
iv. Determine the cost of ending work in process inventory in the department.