Give three examples of industries that use process-costing systems

Weighted-average method, assigning costs. ZanyBrainy Corporation makes interlocking children's blocks in a single processing department. Direct materials are added at the start of production. Conversion costs are added evenly throughout production. ZanyBrainy uses the weighted-average method of process costing. The following information for 0 ctober 2017 is available. $$\begin{array}{lccc} & & \multicolumn{2}{c} {\text { Equivalent Units }} \\ \\)\cline { 3 - 5 } & \\( \text { Physical } \text { Units } & \begin{array}{c} \text { Direct } \\ \text { Materials } \end{array} & \begin{array}{c} \text { Conversion } \\ \text { costs } \end{array} \\ \hline \text { Work in process, 0ctober 1 } & 12,000^{\mathrm{a}} & 12,000 & 9,600 \\ \text { Started in 0ctober } & 48,000 & & \\ \text { Completed and transferred out during October } & 55,000 & 55,000 & 55,000 \\ \text { Work in process, 0ctober 31 } & 5,000^{\mathrm{b}} & 5,000 & 1,500 \end{array}$$ "Degree of completion: direct materials, \(100 \%\); conversion costs, \(80 \%\). ' 1\. Calculate the cost per equivalent unit for direct materials and conversion costs. 2\. Summarize the total costs to account for, and assign them to units completed (and transferred out) and to units in ending work in process.Degree of completion: direct materials, \(100 \%\); conversion costs, \(30 \%\).

Explain equivalent units. Why are equivalent-unit calculations necessary in process costing?

Equivalent units, comprehensive. Louisville Sports manufactures baseball bats for use by players in the major leagues. A critical requirement for elite players is that each bat they use have an identical look and feel. As a result, Louisville uses a dedicated process to produce bats to each player's specifications. One of Louisville's key clients is Ryan Brown of the Green Bay Brewers. Producing his bat involves the use of three materials- ash, cork, and ink-and a sequence of 20 standardized steps. Materials are added as follows: Ash: This is the basic wood used in bats. Eighty percent of the ash content is added at the start of the process; the rest is added at the start of the 16 th step of the process. Cork: This is inserted into the bat in order to increase Ryan's bat speed. Half of the cork is introduced at the beginning of the seventh step of the process; the rest is added at the beginning of the 14 th step. Ink: This is used to stamp Ryan's name on the finished bat and is added at the end of the process. Of the total conversion costs, \(6 \%\) are added during each of the first 10 steps of the process, and \(4 \%\) are added at each of the remaining 10 steps. On May 1,2017 , Louisville had 100 bats in inventory. These bats had completed the ninth step of the process as of April 30,2017 . During May, Louisville put another 60 bats into production. At the end of May, Louisville was left with 40 bats that had completed the 12 th step of the production process. 1\. Under the weighted-average method of process costing, compute equivalent units of work done for each relevant input for the month of May. 2\. Under the FIF0 method of process costing, compute equivalent units of work done for each relevant input for the month of May.

Describe the distinctive characteristic of weighted-average computations in assigning costs to units completed and to units in ending work in process.

Benchmarking, ethics. Amanda McNall is the corporate controller of Scott Quarry. Scott Quarry operates 12 rock-crushing plants in Scott County, Kentucky, that process huge chunks of limestone rock extracted from underground mines. Given the competitive landscape for pricing, Scott's managers pay close attention to costs. Each plant uses a process-costing system, and at the end of every quarter, each plant manager submits a production report and a production-cost report. The production report includes the plant manager's estimate of the percentage of completion of the ending work in process as to direct materials and conversion costs, as well as the level of processed limestone inventory. McNall uses these estimates to compute the cost per equivalent unit of work done for each input for the quarter. Plants are ranked from 1 to 12 , and the three plants with the lowest cost per equivalent unit for direct materials and conversion costs are each given a bonus and recognized in the company newsletter. McNall has been pleased with the success of her benchmarking program. However, she has recently received anonymous e-mails that two plant managers have been manipulating their monthly estimates of percentage of completion in an attempt to obtain the bonus. 1\. Why and how might managers manipulate their monthly estimates of percentage of completion and level of inventory? 2\. McNall's first reaction is to contact each plant controller and discuss the problem raised by the anonymous communications. Is that a good idea? 3\. Assume that each plant controller's primary reporting responsibility is to the plant manager and that each plant controller receives the phone call from McNall mentioned in requirement 2. What is the ethical responsibility of each plant controller (a) to Amanda McNall and (b) to Scott Quarry in relation to the equivalent-unit and inventory information each plant provides? 4\. How might McNall learn whether the data provided by particular plants are being manipulated?