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Process Costing

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EXERCISE 3–1: Process Costing and Job-Order Costing [LO1]
Which method of determining product costs, job-order costing or process costing, would be more appropriate in each of the following situations? * a. An Elmer’s glue factory. * b. A textbook publisher such as McGraw-Hill. * c. An Exxon oil refinery. * d. A facility that makes Minute Maid frozen orange juice. * e. A Scott paper mill. * f. A custom home builder. * g. A shop that customizes vans. * h. A manufacturer of specialty chemicals. * i. An auto repair shop. * j. A Firestone tire manufacturing plant. * k. An advertising agency. * l. A law office.
EXERCISE 3–2: Job-Order Costing Documents [LO2]
Cycle Gear Corporation …show more content…

* a. $80,000 in raw materials were purchased on account. * b. $71,000 in raw materials were requisitioned for use in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. * c. Total labor wages of $112,000 were incurred. Of this amount, $101,000 was for direct labor and the remainder was for indirect labor. * d. Additional manufacturing overhead costs of $175,000 were incurred.
Required:
Record the above transactions in journal entries.
EXERCISE 5–1: Fixed and Variable Cost Behavior
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.
Required:
* 1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.

 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain.
EXERCISE 5–3: High-Low Method
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out

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