Question 1

What is the difference between a weighted-average method of process costing and a first-in,first-out method of process costing?

Accepted Answer

The weighted average method computes uni

Question 2

Direct Disk Drive Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were for June 20X5: Work in process, beginuning inventory $\quad 25,000$ units
Transferred-in costs ( $100 \%$ complete)
Direct materials ( $0 \%$ complete $)$
Conversion costs (90\% complete)

Transferred in during current period $\quad 165,000$ units
Completed and transferred out $\quad \quad \quad 185,000$ units

Work in process, ending inventory $\quad\quad  5,000$ units
Transferred-in costs ( $100 \%$ complete )
Direct materials ( $0 \%$ complete)
Conversion costs ( $65 \%$ complete )

How many units must be accounted for during the period?

Accepted Answer

A)  215,000 units 
B)  190,000 units 
C)  169,500 units 
D)  140,000 units 
A)  215,000 units 
B)  190,000 units 
C)  169,500 units 
D)  140,000 units

Question 3

Answer the following questions using the information below:
Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.
 $\begin{array}{ll}
\text { Datafor Department A for Februay } 2015 \text { are: }\
\text { Work in process, beginning inventory, } 40 \% \text { converted } & 200 \text { units } \
\text { Units started during February } & 800 \text { units } \
\text { Work in process, ending inventory } & 100 \text { units }\
\text { Costs for Department A for February } 2015 \text { are: }\
\text { Work in process, beginuing inventory: }\
\text { Direct materials } & \$ 150,000 \
\text { Conversion costs } & \$ 200,000 \
\text { Direct materials costs added during February } & \$ 600,000 \
\text { Conversion costs added during February } & \$ 425,000
\end{array}$
-How many units were completed and transferred out of Department A during February?

Accepted Answer

A)  300 units 
B)  800 units 
C)  900 units 
D)  1,000 units 
A)  300 units 
B)  800 units 
C)  900 units 
D)  1,000 units

Question 4

Answer the following questions using the information below:
Assembly department of Zahra Technologies had 100 units as work in process at the beginning of the month. These units were 50% complete. It has 200 units which are 25% complete at the end of the month. During the month, it completed and transferred 500 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method.
-Calculate the total equivalent units in ending inventory for assignment of conversion costs?

Accepted Answer

A)  25 units 
B)  50 units 
C)  150 units 
D)  200 units 
A)  25 units 
B)  50 units 
C)  150 units 
D)  200 units

Question 5

The accounting entry to record the conversion cost of the Assembly Department is:
Work in Process-Assembly Department
Accounts Payable Control

Accepted Answer

A) True 
 B)False

Question 6

When calculating the costs to be transferred using the FIFO method,we should not include costs assigned in the previous period to units that were in process at the beginning of the current period but are now included in the units transferred.

Accepted Answer

A) True 
 B)False

Question 7

There are basically two distinct methods of calculating product costs.
Required:
Compare and contrast the two methods.

Accepted Answer

In job costing the job or product is a d

Question 8

As changes in unit costs and inventory levels across periods decrease,the difference in the costs of units completed under the weighted-average and FIFO methods also decreases.

Accepted Answer

A) True 
 B)False

Question 9

Answer the following questions using the information below:
Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing.
 $\begin{array}{ll}\text { Data for the Assembly Depatment for June } 2015 \text { are: }\
\text { Work in process, beginuning inventory }&300 \text { units }\
\text { Direct materials ( } 100 \% \text { complete) }\
\text { Conversion costs ( } 50 \% \text { complete) }\
\text { Units started during June } & 950 \text { units } \
\text { Work in process, ending inventory: } & 150 \text { units } \
\text { Direct materials ( } 100 \% \text { complete) } & \
\text { Conversion costs ( } 75 \% \text { complete) } &\\\text { Costs for June 2015: }\
\text { Work in process, beginuning inventory: }\
\text { Direct materials } & \$ 90,000 \
\text { Conversion costs } & \$ 135,000 \
\text { Direct materials costs added during June } & \$ 600,000 \
\text { Conversion costs ad ded during June } & \$ 400,000
\end{array}$
-What amount of conversion costs is assigned to the ending Work-in-Process account for June?

Accepted Answer

A)  $82,800.50 
B)  $49,639.50 
C)  $66,186.50 
D)  $38,256.50 
A)  $82,800.50 
B)  $49,639.50 
C)  $66,186.50 
D)  $38,256.50

Question 10

Answer the following questions using the information below:
Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers.
During the month of July, molding department purchased 500 kgs of tungsten carbide at $60 per kg. It started manufacture of 4,000 vases and completed and transferred 3,200 vases during the month. It has 800 vases in the process at the end of the month. It incurred direct labor charges of $1,000 and other manufacturing costs of $500, which included electricity costs of $200. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50% complete in respect of conversion costs.
-What is the cost of tungsten carbide that will be assigned to vases finished and transferred to the finishing department for the month of July?

Accepted Answer

A)  $30,000 
B)  $28,000 
C)  $26,000 
D)  $24,000 
A)  $30,000 
B)  $28,000 
C)  $26,000 
D)  $24,000

Question 11

When a Bakery transfers goods from the Mixing Department to the Baking Department,the accounting entry is ________.

Accepted Answer

A)  Work in Process - Mixing Department Work in Process - Baking Department 
B)  Work in Process - Baking Department Accounts Payable 
C)  Work in Process - Baking Department Work in Process - Mixing Department 
D)  Work in Process - Mixing Department Accounts Payable 
A)  Work in Process - Mixing Department Work in Process - Baking Department 
B)  Work in Process - Baking Department Accounts Payable 
C)  Work in Process - Baking Department Work in Process - Mixing Department 
D)  Work in Process - Mixing Department Accounts Payable

Question 12

Big Bernard Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.June is Big Bernard's first month of operations,and therefore,there was no beginning inventory.Direct materials cost for the month totaled $935,000,while conversion costs equaled $4,552,000.Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed.
Ending inventory was 50% complete as to conversion costs.
Required:
a.What is the total manufacturing cost per chip for June?
b.Allocate the total costs between the completed chips and the chips in ending inventory.

Accepted Answer

a.
 \[\begin{array} { | l | r | r | r |

Question 13

The last step in a process-costing system is to compute cost per equivalent unit.

Accepted Answer

A) True 
 B)False

Question 14

Jordana Woolens is a manufacturer of wool cloth.The information for March is as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Beginning work in process } & 10,000 \text { units } \
\hline \text { Units started } & 20,000 \text { units } \
\hline \text { Units completed } & 25,000 \text { units } \
\hline &  \
\hline \text { Beginning work-in-process direct materials } & \$ 6,000\
\hline \text { Beginning work-in-process conversion } &  \$ 2,600\
\hline \text { Direct materials added during month } & \$ 30,000 \
\hline \text { Direct manufacturing labor during month } & \$ 12,000  \
\hline \text { Factory overhead } & \$ 5,000 \
\hline
\end{array}$$ Beginning work in process was half converted as to labor and overhead.Direct materials are added at the beginning of the process.All conversion costs are incurred evenly throughout the process.Ending work in process was 60% complete.
Required:
Prepare a production cost worksheet using the weighted-average method.Include any necessary supporting schedules.

Accepted Answer

The answer of Jordana Woolens is a manufacturer of wool...

Question 15

Answer the following questions using the information below:
The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel.
-What were the equivalent units for materials for February?

Accepted Answer

A)  193,000 chairs 
B)  173,000 chairs 
C)  163,000 chairs 
D)  153,000 chairs 
A)  193,000 chairs 
B)  173,000 chairs 
C)  163,000 chairs 
D)  153,000 chairs

Question 16

An operation is a standardized method or technique performed repetitively,often on different materials,resulting in different finished goods.

Accepted Answer

A) True 
 B)False

Question 17

In hybrid-costing systems,managers use process costing to account for the conversion costs and job costing for the material and customizable components.

Accepted Answer

A) True 
 B)False

Question 18

Answer the following questions using the information below:
Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.
 $\begin{array}{ll}
\text { Datafor Department A for Februay } 2015 \text { are: }\
\text { Work in process, beginning inventory, } 40 \% \text { converted } & 200 \text { units } \
\text { Units started during February } & 800 \text { units } \
\text { Work in process, ending inventory } & 100 \text { units }\
\text { Costs for Department A for February } 2015 \text { are: }\
\text { Work in process, beginuing inventory: }\
\text { Direct materials } & \$ 150,000 \
\text { Conversion costs } & \$ 200,000 \
\text { Direct materials costs added during February } & \$ 600,000 \
\text { Conversion costs added during February } & \$ 425,000
\end{array}$
-What is the unit cost per equivalent unit of beginning inventory in Department A?

Accepted Answer

A)  $750 
B)  $1,750 
C)  $2,800 
D)  $3,250 
A)  $750 
B)  $1,750 
C)  $2,800 
D)  $3,250

Question 19

Which of the following companies is likely to use a hybrid-costing system?

Accepted Answer

A)  Best Fit Corp., which manufactures pharmaceuticals 
B)  Rida Corp., which processes and sells, after import, a single variant of Turkish marble to real estate companies 
C)  Fast run, which sells a limited range of televisions, which go through similar manufacturing process 
D)  Karoline Corp., which manufactures and sells a single model of cap 
A)  Best Fit Corp., which manufactures pharmaceuticals 
B)  Rida Corp., which processes and sells, after import, a single variant of Turkish marble to real estate companies 
C)  Fast run, which sells a limited range of televisions, which go through similar manufacturing process 
D)  Karoline Corp., which manufactures and sells a single model of cap

Question 20

Which of the following statements is true?

Accepted Answer

A)  In a job-costing system, average production cost is calculated for all units produced. 
B)  In a process-costing system, each unit uses approximately the same amount of resources. 
C)  In a job-costing system, overheads are allocated to all units equally. 
D)  In a process-costing system, individual jobs use different quantities of production resources. 
A)  In a job-costing system, average production cost is calculated for all units produced. 
B)  In a process-costing system, each unit uses approximately the same amount of resources. 
C)  In a job-costing system, overheads are allocated to all units equally. 
D)  In a process-costing system, individual jobs use different quantities of production resources.

What is the difference between a weighted-average method of process costing and a first-in,first-out method of process costing?

The accounting entry to record the conversion cost of the Assembly Department is: Work in Process-Assembly Department Accounts Payable Control

When calculating the costs to be transferred using the FIFO method,we should not include costs assigned in the previous period to units that were in process at the beginning of the current period but are now included in the units transferred.

There are basically two distinct methods of calculating product costs. Required: Compare and contrast the two methods.

As changes in unit costs and inventory levels across periods decrease,the difference in the costs of units completed under the weighted-average and FIFO methods also decreases.

When a Bakery transfers goods from the Mixing Department to the Baking Department,the accounting entry is ________.

The last step in a process-costing system is to compute cost per equivalent unit.

An operation is a standardized method or technique performed repetitively,often on different materials,resulting in different finished goods.

In hybrid-costing systems,managers use process costing to account for the conversion costs and job costing for the material and customizable components.

Which of the following companies is likely to use a hybrid-costing system?

Which of the following statements is true?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 17: Process Costing

What is the difference between a weighted-average method of process costing and a first-in,first-out method of process costing?

The accounting entry to record the conversion cost of the Assembly Department is: Work in Process-Assembly Department Accounts Payable Control

When calculating the costs to be transferred using the FIFO method,we should not include costs assigned in the previous period to units that were in process at the beginning of the current period but are now included in the units transferred.

There are basically two distinct methods of calculating product costs. Required: Compare and contrast the two methods.

As changes in unit costs and inventory levels across periods decrease,the difference in the costs of units completed under the weighted-average and FIFO methods also decreases.

When a Bakery transfers goods from the Mixing Department to the Baking Department,the accounting entry is ________.

The last step in a process-costing system is to compute cost per equivalent unit.

An operation is a standardized method or technique performed repetitively,often on different materials,resulting in different finished goods.

In hybrid-costing systems,managers use process costing to account for the conversion costs and job costing for the material and customizable components.

Which of the following companies is likely to use a hybrid-costing system?

Which of the following statements is true?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters