PROCESS COSTING

AVERAGE METHOD
SELF EXERCISE 1

(Adapted from Garrison/Noreen)

1.Health Beverage Company uses a process costing system to collect costs related to the
production of its celery flavored cola. The cola is first processed in a Mixing
Department at Health and is then transferred out and finished up in the Bottling
Department. The finished cases of cola are then transferred to Finished Goods
Inventory. The following information relates to Health's two departments for the
month of January:

Bottlin
Mixing g
10,00
Cases of cola in work in process, January 1...................... 0 3,000
Cases of cola completed/transferred out during 77,00
January........................................................................................ 0 ?
Cases of cola in work in process, January 31................... 4,000 8,000

How many cases of cola were completed and transferred to Finished Goods
Inventory during January?

2.The Assembly Department started the month with 83,000 units in its beginning work
in process inventory. An additional 334,000 units were transferred in from the prior
department during the month to begin processing in the Assembly Department.
There were 34,000 units in the ending work in process inventory of the Assembly
Department.
How many units were transferred to the next processing department during the
month?

3.Colby Company has a process costing system in which the weighted-average method
is used. The company adds all materials at the beginning of the process in the
Molding Department, which is the first of two stages of its production process.
Information concerning the materials used in the Molding Department during March
is as follows:

Material
Units s Costs
22,00
Work in process at March 1................................................... 0 $11,000
90,00
Units started during March.................................................... 0 $46,120
Units completed and transferred to next department 97,00
during March........................................................................... 0
 What was the materials cost of the work in process inventory at March 31?

4.Barnett Company uses the weighted-average method in its process costing system.
The company adds materials at the beginning of the process in Department M.
Conversion costs were 75% complete with respect to the 4,000 units in work in
process at May 1 and 50% complete with respect to the 6,000 units in work in
process at May 31. During May, 12,000 units were completed and transferred to the
next department. An analysis of the costs relating to work in process at May 1 and to
production activity for May follows:

Material Conversio
s n
Work in process 5/1......................... $13,800 $3,740
Costs added during May.................. $42,000 $26,260

The total cost per equivalent unit for May was:

5.Maurice Company uses the weighted-average method in its process costing system.
The company adds materials at the beginning of the process in the Forming
Department, which is the first of two stages of its production process. Information
concerning the materials used in the Forming Department in April follows:

Materials
Units Costs
Work in process at April 1...................................................... 12,000 $6,000
100,00
Units started during April....................................................... 0 $51,120
Units completed and transferred to next department
during April.............................................................................. 88,000

What was the materials cost of the work in process at April 30?
6.Destry Company uses the weighted-average method in its process costing system. The
first processing department, the Welding Department, started the month with
10,000 units in its beginning work in process inventory that were 30% complete
with respect to conversion costs. The conversion cost in this beginning work in
process inventory was $19,200. An additional 60,000 units were started into
production during the month. There were 19,000 units in the ending work in
process inventory of the Welding Department that were 70% complete with respect
to conversion costs. A total of $380,060 in conversion costs were incurred in the
department during the month.

What would be the cost per equivalent unit for conversion costs for the month?
(Round off to three decimal places.)

7.Limber Company uses the weighted-average method in its process costing system.
Operating data for the first processing department for the month of June appear
below:

Percent
Complete
with Respect
Units to Conversion
18,00
Beginning work in process inventory...... 0 80%
81,00
Started into production during June........ 0
17,00
Ending work in process inventory............ 0 80%

According to the company's records, the conversion cost in beginning work in

process inventory was $15,264 at the beginning of June. Additional conversion costs
of $68,208 were incurred in the department during the month.
What was the cost per equivalent unit for conversion costs for the month? (Round
off to three decimal places.)

8.Roy Company manufactures a product in Departments A and B. Materials are added at

the beginning of the process in Department B. Roy uses the weighted-average
method in its process costing system. Conversion costs for Department B were 50%
complete with respect to the 6,000 units in the beginning work in process and 75%
complete with respect to the 8,000 units in the ending work in process. A total of
12,000 units were completed and transferred out of Department B during February.
An analysis of the costs in Department B for February follows:

Transferred Material Conversio

In s n
Work in process, February 1......... $12,000 $2,500 $1,000
Costs added during February....... $29,000 $5,500 $5,000
 The total cost per equivalent unit during February was closest to:

9.Hammoudi Company uses the weighted-average method in its process costing system.
The first processing department, the Welding Department, started the month with
16,000 units in its beginning work in process inventory that were 90% complete
with respect to conversion costs. The conversion cost in this beginning work in
process inventory was $61,920. An additional 53,000 units were started into
production during the month and 45,000 units were completed in the Welding
Department and transferred to the next processing department. There were 24,000
units in the ending work in process inventory of the Welding Department that were
70% complete with respect to conversion costs. A total of $194,340 in conversion
costs were incurred in the department during the month.

What would be the cost per equivalent unit for conversion costs for the month?
(Round off to three decimal places.)

10. Paquet Company uses the weighted-average method in its process costing system.
The Molding Department is the second department in its production process. The
data below summarize the department's operations in January.

Percent
Complete
with Respect
Units to Conversion
Beginning work in process inventory.................... 7,700 40%
Transferred in from the prior....................................
56,00
department during January........................................ 0
Completed and transferred to the next.................
58,40
department during January........................................ 0
Ending work in process inventory.......................... 5,300 90%

The accounting records indicate that the conversion cost that had been assigned to
beginning work in process inventory was $16,940 and a total of $347,320 in
conversion costs were incurred in the department during January.

What was the cost per equivalent unit for conversion costs for January in the
Molding Department? (Round off to three decimal places.)
11. Jimmy Company uses the weighted-average method in its process costing system.
The ending work in process inventory consists of 9,000 units. The ending work in
process inventory is 100% complete with respect to materials and 70% complete
with respect to labor and overhead. If the cost per equivalent unit for the period is
$3.75 for material and $1.25 for labor and overhead, what is the balance of the
ending work in process inventory account?

12. Lawton Company produces canned tomato soup in a single processing department
and has a process costing system in which it uses the weighted-average method. The
company sold 250,000 units in the month of January. Data concerning inventories
follow:

Units
Inventory at January 1:
Work in process...................................................................... None
75,00
Finished goods......................................................................... 0
Inventory at January 31:
16,00
Work in process (conversion 75% complete)............ 0
60,00
Finished goods......................................................................... 0
 What were the equivalent units for conversion costs for January?

13. Jersey Company has a process costing system in which it uses the weighted-average
method. The equivalent units for conversion costs for the month were 47,500 units.
The beginning work in process inventory consisted of 15,000 units, 60% complete
with respect to conversion costs. The ending work in process inventory consisted of
10,000 units, 75% complete with respect to conversion costs. The number of units
started during the month was:

14. Boswal Company uses the weighted-average method in its process costing system.
The Assembly Department started the month with 6,000 units in its beginning work
in process inventory that were 80% complete with respect to conversion costs. An
additional 52,000 units were transferred in from the prior department during the
month to begin processing in the Assembly Department. There were 18,000 units in
the ending work in process inventory of the Assembly Department that were 20%
complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department
for the month?

15. Jolly Company uses the weighted-average method in its process costing system.
Operating data for the Painting Department for the month of April appear below:

Percent
Complete
with
Respect to
Units Conversion
Beginning work in process inventory.............................. 4,700 90%
Transferred in from the prior department during
April........................................................................................... 59,700
Ending work in process inventory..................................... 7,300 80%

What were the equivalent units for conversion costs in the Painting Department for
April?