Smith Manufacturing uses the weighted average process costs method.Smith has provided the follow data: \[\begin{array} { l r r r } & \text { Total Units/Cost } & \text { Material } & \text { Conversion } \\ \hline \text { Beginning inventory } & 25,000 & & \\ \text { Units started during period } & 175,000 & & \\ \text { Units completed during period } & 185,000 & & \\ \text { Costs from beginning inventory } & \$ 641,250 & \$ 561,250 & \$ 80,000 \\ \text { Costs incurred during period } & \$ 6,868,750 & \$ 4,038,750 & \$ 2,830,000 \end{array}\] Units still in process at the end of the period are 100% complete as to material and 60% complete as to conversion.What is the cost of materials allocated to units completed during the period?

A) $4,255,000 B) $4,600,000 C) $4,038,750 D) $6,868,750 E) None of the above. A) $4,255,000 B) $4,600,000 C) $4,038,750 D) $6,868,750 E) None of the above.

Smith Manufacturing uses the weighted average process costs method.Smith has provided the follow data: \[\begin{array} { l r r r } & \text { Total Units/Cost } & \text { Material } & \text { Conversion } \\ \hline \text { Beginning inventory } & 25,000 & & \\ \text { Units started during period } & 175,000 & & \\ \text { Units completed during period } & 185,000 & & \\ \text { Costs from beginning inventory } & \$ 641,250 & \$ 561,250 & \$ 80,000 \\ \text { Costs incurred during period } & \$ 6,868,750 & \$ 4,038,750 & \$ 2,830,000 \end{array}\] Units still in process at the end of the period are 100% complete as to material and 60% complete as to conversion.What is the cost per equivalent unit for conversion costs?

A) $24.18 B) $34.34 C) $15.00 D) $14.55 E) $15.29 A) $24.18 B) $34.34 C) $15.00 D) $14.55 E) $15.29

Smith Manufacturing uses a standard costing system.For the current period, Smith allocated the following costs using a predetermined overhead rate: \[\begin{array} { l r r r } & \text { Material } & \text { Conversion } & \text { Total } \\ \text { Allocated Costs: } & & & \\ \text { Units completed } & \$ 40,000 & \$ 20,000 & \$ 60,000 \\ \text { Units in process end of period } & \$ 5,000 & \$ 3,000 & \$ 8,000 \\ & \$ 45,000 & \$ 23,000 & \$ 68,000 \\ & & & \\ \text { Actual Costs: } & \$ 50,000 & \$ 22,000 & \$ 72,000 \end{array}\] What are Smith's material and conversion variances for the month?

A) $10,000 Unfavorable materials variance/$2,000 Unfavorable conversion variance. B) $20,000 Unfavorable materials variance/$2,000 Favorable conversion variance. C) $5,000 Unfavorable materials variance/$1,000 Favorable conversion variance. D) $12,000 materials variance/$50,000 conversion variance. E) None of the above. A) $10,000 Unfavorable materials variance/$2,000 Unfavorable conversion variance. B) $20,000 Unfavorable materials variance/$2,000 Favorable conversion variance. C) $5,000 Unfavorable materials variance/$1,000 Favorable conversion variance. D) $12,000 materials variance/$50,000 conversion variance. E) None of the above.

Exam 15: Process-Costing Systems

Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process are only 20 percent complete.What is the number of equivalent units in WIP inventory at the end of the period?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

B

Which of the following is not a difference in a job-cost environment and a process-cost environment?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

D

To apply a standard process costing system, we use the standards for materials, labor and overhead to value Cost of Goods Manufactured and Work In Process.

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(True/False)

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Question 3

Correct Answer:

Verified

True

When using the weighted average costs method, the cost of beginning inventory is:

(Multiple Choice)

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Question 4

In the mechanics of process costing, why is an allocation that computes costs based on the number of physical units not accurate?

(Multiple Choice)

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Question 5

Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process.Smith has issued all the needed materials, but has completed only 20% of the assembly work.What is the number of total equivalent units in work in process for material and conversion at the end of the period?

(Multiple Choice)

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Question 6

Typically in process costing, separate rates are computed for materials costs and for conversion costs.

(True/False)

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Question 7

Most process costing systems use weighted average process costs which do not distinguish between the costs from the prior period and costs incurred during the current period.

(True/False)

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Question 8

When using a standard process costing system, under-applied overhead is:

(Multiple Choice)

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Question 9

In a process costing system, in-process units are converted to physical units.

(True/False)

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Question 10

Smith Manufacturing uses the weighted average process costs method.Smith has provided the follow data: Total Units/Cost Material Conversion Beginning inventory 25,000 Units started during period 175,000 Units completed during period 185,000 Costs from beginning inventory \ 641,250 \ 561,250 \ 80,000 Costs incurred during period \ 6,868,750 \ 4,038,750 \ 2,830,000 Units still in process at the end of the period are 100% complete as to material and 60% complete as to conversion.What is the cost of materials allocated to units completed during the period?

(Multiple Choice)

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Question 11

Smith Manufacturing uses the weighted average process costs method.Smith has provided the follow data: Total Units/Cost Material Conversion Beginning inventory 25,000 Units started during period 175,000 Units completed during period 185,000 Costs from beginning inventory \ 641,250 \ 561,250 \ 80,000 Costs incurred during period \ 6,868,750 \ 4,038,750 \ 2,830,000 Units still in process at the end of the period are 100% complete as to material and 60% complete as to conversion.What is the cost per equivalent unit for conversion costs?

(Multiple Choice)

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Question 12

A process costing system can accommodate more than two cost pools by calculating a separate equivalent unit basis for each cost pool.

(True/False)

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Question 13

A firm should employ standard costing only in those production environments where a firm makes similar or identical units in large quantities.

(True/False)

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Question 14

An advantage of process costing is that all inputs are required at the beginning of the process.

(True/False)

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Question 15

For units still in process, when using the weighted average method multiply the physical units by the percentage completion and add this amount to the units completed to obtain total equivalent units for the period.

(True/False)

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Question 16

Smith Manufacturing uses a standard costing system.For the current period, Smith allocated the following costs using a predetermined overhead rate: Material Conversion Total Allocated Costs: Units completed \ 40,000 \ 20,000 \ 60,000 Units in process end of period \ 5,000 \ 3,000 \ 8,000 \ 45,000 \ 23,000 \ 68,000 Actual Costs: \ 50,000 \ 22,000 \ 72,000 What are Smith's material and conversion variances for the month?

(Multiple Choice)

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Question 17

Standard costing is simple to adapt to a job shop environment where each job is unique.

(True/False)

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Question 18

Because the predetermined rates in process costing come from company budgets, we refer to these rates as budgeted rates and to the system as a budgeted costing system.

(True/False)

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Question 19

Which of the following is not a step in preparing a process costing report?

(Multiple Choice)

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Question 20

Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process are only 20 percent complete.What is the number of equivalent units in WIP inventory at the end of the period?

Which of the following is not a difference in a job-cost environment and a process-cost environment?

To apply a standard process costing system, we use the standards for materials, labor and overhead to value Cost of Goods Manufactured and Work In Process.

When using the weighted average costs method, the cost of beginning inventory is:

In the mechanics of process costing, why is an allocation that computes costs based on the number of physical units not accurate?

Typically in process costing, separate rates are computed for materials costs and for conversion costs.

Most process costing systems use weighted average process costs which do not distinguish between the costs from the prior period and costs incurred during the current period.

When using a standard process costing system, under-applied overhead is:

In a process costing system, in-process units are converted to physical units.

A process costing system can accommodate more than two cost pools by calculating a separate equivalent unit basis for each cost pool.

A firm should employ standard costing only in those production environments where a firm makes similar or identical units in large quantities.

An advantage of process costing is that all inputs are required at the beginning of the process.

For units still in process, when using the weighted average method multiply the physical units by the percentage completion and add this amount to the units completed to obtain total equivalent units for the period.

Standard costing is simple to adapt to a job shop environment where each job is unique.

Because the predetermined rates in process costing come from company budgets, we refer to these rates as budgeted rates and to the system as a budgeted costing system.

Which of the following is not a step in preparing a process costing report?

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Cost Flows and Cost Terminology

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Refining Systems: Support Activity

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