Question 1

For which of the following industries would it NOT be appropriate to use process costing?

Accepted Answer

A)  Custom furniture building. 
B)  Oil refining. 
C)  Grain milling. 
D)  Newsprint production. 
A)  Custom furniture building. 
B)  Oil refining. 
C)  Grain milling. 
D)  Newsprint production.

Question 2

The activity in Nolan Company's Blending Department for the month of April is given below:
$\begin{array} {| l | r | r | } 
\hline & \text { Number of Units } & \begin{array} { r } 
\text { Labour and overhead } \
\text { percentage complete }
\end{array} \
\hline \begin{array} { l r } 
\text { Work in process inventory, } \
\text { April 1 }
\end{array} & 8,000 & 50 \% \
\hline \begin{array} { l } 
\text { Transferred in the during } \
\text { the month }
\end{array} & 50,000 & \
\hline \begin{array} { l } 
\text { Work in process inventory, } \
\text { April 30 }
\end{array} & 10,000 & 70 \% \
\hline
\end{array}$
All materials are added at the beginning of processing in the Blending Department.

- Using the FIFO method,what are the equivalent units of production for labour and overhead for the month?

Accepted Answer

A)  47,000 units. 
B)  51,000 units. 
C)  5,000 units. 
D)  54,000 units. 
A)  47,000 units. 
B)  51,000 units. 
C)  5,000 units. 
D)  54,000 units.

Question 3

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May:
$\begin{array} { | l | r | } 
\hline & \text { Units } \
\hline \text { Beginning work in process inventory } & 16,000 \
\hline \text { Started into production during May } & 100,000 \
\hline \text { Completed during May } & 92,000 \
\hline \text { Ending work in process inventory } & 24,000 \
\hline
\end{array}$
The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:
$\begin{array}{|l|r|r|}
\hline & \text { Materials } & \text { Conversion } \
\hline \begin{array}{l}
\text { Beginning work-in-process } \
\text { inventory }
\end{array} & \$ 54,560 & \$ 35,560 \
\hline \text { Costs incurred during May } & \$ 468,000 & \$ 574,040 \
\hline
\end{array}$

- Using the FIFO method,the total cost of units in the ending work-in-process inventory is closest to which of the following?

Accepted Answer

A)  $153,200. 
B)  $154,800. 
C)  $155,300. 
D)  $157,000. 
A)  $153,200. 
B)  $154,800. 
C)  $155,300. 
D)  $157,000.

Question 4

David Company uses the weighted-average method in its process costing system.The first processing department,the Welding Department,started the month with 20,000 units that were 80% complete with respect to conversion costs.The conversion cost in this beginning work-in-process inventory was $123,200.An additional 65,000 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 10% complete with respect to conversion costs.A total of $389,250 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.)

Accepted Answer

A)  $7.547. 
B)  $7.700. 
C)  $4.634. 
D)  $5.988. 
A)  $7.547. 
B)  $7.700. 
C)  $4.634. 
D)  $5.988.

Question 5

Tarten Company uses the FIFO method in its process costing system.Operating data for the Curing Department for the month of March appear below:
$\begin{array}{|l|r|r|}
\hline & \text { Units } & \text { Percentage complete } \
\hline \begin{array}{l}
\text { Beginning work in process } \
\text { inventory }
\end{array} &9,000 &10 \% \
\hline \begin{array}{l}
\text { Transferred in from the } \
\text { prior department during }
\end{array} &57,000 & \
\text {March }\
\hline\text { Completed and transferred }& 65,200 \ 
\text { to the next department } \
\text { during March }  & \
\hline \text { Ending work in process } & 1,000 & 70 \%\
\text { inventory }  \ 
\hline
\end{array}$
According to the company's records,the conversion cost in beginning work-in-process inventory was $7,470 at the beginning of March.The cost per equivalent unit for conversion costs for March was $8.20.
How much conversion cost would be assigned to the units completed and transferred out of the department during March?

Accepted Answer

A)  $525,530. 
B)  $592,040. 
C)  $533,090. 
D)  $533,000. 
A)  $525,530. 
B)  $592,040. 
C)  $533,090. 
D)  $533,000.

Question 6

Units can disappear because of evaporation,losses,or rejection.Such missing units can be considered to be a normal part of the processing or may be deemed to be abnormal.

Accepted Answer

A) True 
 B)False

Question 7

Paxton Company uses the weighted-average method in its process costing system.The Moulding Department is the second department in its production process.The data below summarize the department's operations in January:
$\begin{array}{|l|r|r|}
\hline&\text { Units}&\text { Percentage complete }\
\hline \text { Beginning work in process } & 2,700 & 80 \% \
\text { inventory } & \
\hline \begin{array}{l}
\text { Transferred in from the } \
\text { prior department during }
\end{array} &  57,000 & \
\text { January }\
\hline \begin{array}{l}
\text { Completed and transferred } \
\text { to the next department } \
\text { during January }
\end{array} & 50,300 & \
\hline \begin{array}{l}
\text { Ending work in process } \
\text { inventory }
\end{array} & 9,400 & 20 \% \
\hline
\end{array}$
The accounting records indicate that the conversion cost that had been assigned to beginning work-in-process inventory was $10,973,and a total of $268,107 in conversion costs were incurred in the department during January.
What was the cost per equivalent unit for conversion costs for January in the Moulding Department? (Round off to three decimal places.)

Accepted Answer

A)  $5.348. 
B)  $4.038. 
C)  $5.080. 
D)  $4.704. 
A)  $5.348. 
B)  $4.038. 
C)  $5.080. 
D)  $4.704.

Question 8

Information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company follow:$\begin{array} {| l | r | r | } 
\hline & \text { Number of Units } & \begin{array} { r } 
\text { Conversion costs } \
\text { percentage complete }
\end{array} \
\hline \begin{array} { l } 
\text { Beginning work in process } \
\text { inventory }
\end{array} & 11,000 & 35 \% \
\hline \begin{array} { l } 
\text { Units started into } \
\text { production }
\end{array} & 120,000 & \
\hline \begin{array} { l } 
\text { Units completed and } \
\text { transferred out }
\end{array} & 114,000 & 30 \% \
\hline \begin{array} { l } 
\text { Ending work in process } \
\text { inventory }
\end{array} & 17,000 & \
\hline
\end{array}$
The beginning work-in-process inventory included $11,000 of conversion cost. During the month, the Refining Department incurred an additional $290,000 in conversion costs.

-Assuming that the company uses the weighted-average cost method,what is the cost per equivalent unit for conversion costs for the month in the refining Department,rounded to the nearest cent?

Accepted Answer

A)  $2.55. 
B)  $2.53. 
C)  $2.50. 
D)  $2.44. 
A)  $2.55. 
B)  $2.53. 
C)  $2.50. 
D)  $2.44.

Question 9

Winder Company uses the FIFO method in its process costing system.Department One is the first stage of the company's production process.The following information pertains to conversion costs for April for Department One:
$$\begin{array} { | l | l | } 
\hline \text { Units } & \
\hline \begin{array} { l } 
\text { Work in process, beginning (40\% } \
\text { complete) }
\end{array} & 40,000 \
\hline \text { Started in April } & 320,000 \
\hline \begin{array} { l } 
\text { Completed in April and transferred to } \
\text { Department Two }
\end{array} & 340,000 \
\hline \text { Work in process, ending (60\% complete) } & 20,000 \
\hline
\end{array}$$
What are the equivalent units of production for conversion costs?

Accepted Answer

A)  320,000 units. 
B)  336,000 units. 
C)  352,000 units. 
D)  360,000 units. 
A)  320,000 units. 
B)  336,000 units. 
C)  352,000 units. 
D)  360,000 units.

Question 10

Fabian Company uses the weighted-average method in its process costing system.The Assembly Department started the month with 9,000 units in its beginning work-in-process inventory that were 70% complete with respect to conversion costs.During the month,an additional 90,000 units were transferred in from the prior department to begin processing in the Assembly Department.During the month,87,000 units were completed in the Assembly Department and transferred to the next processing department.There were 12,000 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 of production for conversion costs in the Assembly Department for the month?

Accepted Answer

A)  93,000 units. 
B)  83,100 units. 
C)  87,000 units. 
D)  89,400 units. 
A)  93,000 units. 
B)  83,100 units. 
C)  87,000 units. 
D)  89,400 units.

Question 11

Lucas 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 in its production process.Information concerning operations in the Forming Department in October follows:
$\begin{array}{|c|c|c|}
\hline&\text { Materials }\
\hline&\text {Units}&\text {Cost}\
\hline  \begin{array}{l}
\text { Work in process on October } \
1\
\end{array}& 6,000 & \$ 3,000 \
\hline \text { Units started during October } & 50,000 & \$ 25,560 \
\hline \begin{array}{l}
\text { Units completed and } \
\text { transferred to the next } \
\text { Department during October }
\end{array} & 44,000 & \
\hline
\end{array}$

What was the materials cost of work in process on October 31?

Accepted Answer

A)  $3,060. 
B)  $5,520. 
C)  $6,000. 
D)  $6,120. 
A)  $3,060. 
B)  $5,520. 
C)  $6,000. 
D)  $6,120.

Question 12

The weighted-average method of process costing can only be used if materials are added at the beginning of the production process.

Accepted Answer

A) True 
 B)False

Question 13

The Assembly Department started the month with 35,000 units in its beginning work-in-process inventory.Additional units 472,000 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?

Accepted Answer

A)  507,000 units. 
B)  473,000 units. 
C)  471,000 units. 
D)  541,000 units. 
A)  507,000 units. 
B)  473,000 units. 
C)  471,000 units. 
D)  541,000 units.

Question 14

The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work-in-process inventory.

Accepted Answer

A) True 
 B)False

Question 15

Carver 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:
 $\begin{array}{|l|c|}
\hline \text { Work in process, beginning: } & \
\hline \text { Units in process } & 700 \
\hline \begin{array}{l}
\text { Stage of completion with respect to } \
\text { materials }
\end{array} & 50 \% \
\hline \begin{array}{l}
\text { Stage of completion with respect to } \
\text { conversion }
\end{array} & 40 \% \
\hline \begin{array}{l}
\text { Units started into production during the } \
\text { month }
\end{array} & 23,000 \
\hline \text { Work in process, ending: } & \
\hline \text { Units in process } &200 \
\hline \begin{array}{l}
\text { Stage of completion with respect to } \
\text { materials }
\end{array} & 80 \% \
\hline \begin{array}{l}
\text { Stage of completion with respect to } \
\text { conversion }
\end{array} & 40 \% \
\hline 
\end{array}$
 
Required:
Using the weighted-average method,determine the equivalent units of production for materials and conversion costs by compiling the "Quantity Schedule and Equivalent Units" portion of the production report.

Accepted Answer

Quantity schedule and equivalent units

Question 16

Sarver Company uses the weighted-average method in its process costing system.The Fitting Department is the second department in its production process.The data below summarize the department's operations in March:
$$\begin{array} { | l | r | r | } 
\hline & \text { Units } & \text { Percentage complete } \
\hline \text { Beginning work in process } &7,100 & 70 \% \
\hline \text { inventory } & & \
\hline \text { Transferred in from the } & 61,000 & \
\text { prior department during } \
\text { April }\
\hline\text { Ending work in process } & 4,600 & 30 \% \
\text { inventory }\
\hline
\end{array}$$

The Fitting Department's production report indicates that the cost per equivalent unit for conversion cost for March was $8.24.
How much conversion cost was assigned to the units transferred out of the Fitting Department during March?

Accepted Answer

A)  $482,287.20. 
B)  $502,640.00. 
C)  $523,240.00. 
D)  $561,144.00. 
A)  $482,287.20. 
B)  $502,640.00. 
C)  $523,240.00. 
D)  $561,144.00.

Question 17

In the production report,a separate line is included in the units accounted for section for normal units lost.

Accepted Answer

A) True 
 B)False

Question 18

Clover Sweet Company uses the weighted-average method in its process costing system.Information for the month of February concerning Department A,the first stage of the company's production process,follows:
$\begin{array}{|l|c|c|}
\hline &\text { Materials }&\text {Conversion cost }\ 
\hline \text { Work in process, beginning } & \$ 7,000 & \$ 5,000 \
\hline \begin{array}{l}
\text { Current added during } \
\text { January }
\end{array} & \$ 45,000 & \$ 37,000 \
\hline \begin{array}{l}
\text { Equivalent units of } \
\text { production }
\end{array} & 105,000 & 100,000 \
\hline \text { Cost per equivalent unit } & \$ 0.58 & \$ 0.5 \
\hline
\end{array}$

$$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Units completed and transferred to the next } \
\text { department }
\end{array} & 95,000 \text { units } \
\hline \text { Work in process, endirg } & 15,000 \text { units } \
\hline
\end{array}$$
Materials are added at the beginning of the process.The ending work in process is 60% complete with respect to conversion costs.What cost would be recorded for the ending work-in-process inventory?

Accepted Answer

A)  $13,500 
B)  $13,200 
C)  $14,300 
D)  $12,300 
A)  $13,500 
B)  $13,200 
C)  $14,300 
D)  $12,300

Question 19

Selah Manufacturing makes a quality-improvement device for the aeronautical industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May:
$\begin{array} { | l | r | } 
\hline & \text { Number of Units } \
\hline \text { Beginning work in process inventory } & 16,000 \
\hline \text { Units started into production during May } & 100,000 \
\hline \text { Units completed during May } & 92,000 \
\hline \text { Ending work in process inventory } & 24,000 \
\hline
\end{array}$The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:
$\begin{array} { |l | r | r | r | } 
\hline & \text { Materials } & \text { Conversion } & \text { Total } \
\hline \begin{array} { l } 
\text { Beginning work-in- } \
\text { process inventory }
\end{array} & \$ 54,560 & \$ 35,560 & \$ 90,120 \
\hline \begin{array} { l } 
\text { Costs incurred } \
\text { during May }
\end{array} & \$ 468,000 & \$ 574,040 & \$ 1,042,040 \
\hline \text { Total } & \$ 522,560 & \$ 609,600 & \$ 1,132,160 \
\hline
\end{array}$
-What was the unit cost for conversion included in the beginning work-in-process inventory,rounded to the nearest cent?

Accepted Answer

A)  $2.22. 
B)  $2.78. 
C)  $6.00. 
D)  $11.11. 
A)  $2.22. 
B)  $2.78. 
C)  $6.00. 
D)  $11.11.

Question 20

Marten Company uses the FIFO method in its process costing system.Operating data for the Casting Department for the month of September appear below:
$$\begin{array} { | l | r | r | } 
\hline & \text { Units } & \text { Percentage complete } \
\hline \text { Beginning work in process } & 19,000 & 80 \% \
 \text { inventory } & & \
\hline \text { Transferred in from the } & 74,000 & \
\text { prior department during } & & \
\text { September } &  & \
\hline \begin{array} { l } 
\text { Ending work in process } \
\text { inventory }
\end{array} &17,000 &90\% \
\hline
\end{array}$$
According to the company's records,the conversion cost in beginning work-in-process inventory was $83,600 at the beginning of September.Additional conversion costs of $427,682 were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for September on the Casting Department's production report? (Round off to three decimal places.)

Accepted Answer

A)  $5.498. 
B)  $5.779. 
C)  $5.620. 
D)  $5.500. 
A)  $5.498. 
B)  $5.779. 
C)  $5.620. 
D)  $5.500.

For which of the following industries would it NOT be appropriate to use process costing?

Units can disappear because of evaporation,losses,or rejection.Such missing units can be considered to be a normal part of the processing or may be deemed to be abnormal.

The weighted-average method of process costing can only be used if materials are added at the beginning of the production process.

The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work-in-process inventory.

In the production report,a separate line is included in the units accounted for section for normal units lost.

Managerial Accounting and the Business Environment

Cost Terms,concepts,and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Activity-Based Costing: A Tool to Aid Decision Making

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Filters

Exam 6: Systems Design: Process Costing

For which of the following industries would it NOT be appropriate to use process costing?

Units can disappear because of evaporation,losses,or rejection.Such missing units can be considered to be a normal part of the processing or may be deemed to be abnormal.

The weighted-average method of process costing can only be used if materials are added at the beginning of the production process.

The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work-in-process inventory.

In the production report,a separate line is included in the units accounted for section for normal units lost.

Managerial Accounting and the Business Environment

Cost Terms,concepts,and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Activity-Based Costing: A Tool to Aid Decision Making

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Filters