Question 1

When calculating the equivalent units,we should only focus on dollar amounts of inventory.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true regarding estimates of completion of units in a process costing system?

Accepted Answer

A) estimating the degree of completion with regards to conversion costs is more of a science than an art 
B) estimating the degree of completion with regards to conversion costs is usually easier and more accurate than estimating the degree of completion with regards to direct materials 
C) estimating the degree of completion with regards to direct materials is usually easier and more accurate than estimating the degree of completion with regards to conversion costs 
D) when estimating degree of completion,the degree of completion with regards to conversion costs is usually a portion similar to the degree of completion with regards to direct materials 
A) estimating the degree of completion with regards to conversion costs is more of a science than an art 
B) estimating the degree of completion with regards to conversion costs is usually easier and more accurate than estimating the degree of completion with regards to direct materials 
C) estimating the degree of completion with regards to direct materials is usually easier and more accurate than estimating the degree of completion with regards to conversion costs 
D) when estimating degree of completion,the degree of completion with regards to conversion costs is usually a portion similar to the degree of completion with regards to direct materials

Question 3

Dessa Cabinetry,Inc. ,manufactures standard sized modular cabinet units for kitchens and other applications within the home.Its costing system utilizes two cost categories,direct materials and conversion costs.Each product must pass through the rough cut department and the finish department.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production.
Data for Finishing Department for March 2017 are:
 
Costs for Finishing Department for March 2017 are:
 
What is the unit cost per equivalent unit of the beginning inventory in the Finishing Department? (Round the final answer to the nearest whole dollar. )

Accepted Answer

A) $240 
B) $300 
C) $988 
D) $1228 
A) $240 
B) $300 
C) $988 
D) $1228

Question 4

A production cost worksheet is used to summarize total costs to account for,compute cost per equivalent unit,and assign total costs to units completed and to units in ending work-in-process.

Accepted Answer

A) True 
 B)False

Question 5

The accuracy of the completion estimate of conversion costs depends on the care,skill,and experience of the estimator and also the nature of the conversion process.

Accepted Answer

A) True 
 B)False

Question 6

The president of the Gulf Coast Refining Corporation wants to know why his golfing partner,who is the chief financial officer of a large construction company,calculates his costs by the job,but his own corporation calculates costs by large units rather than by individual barrel of oil.

Accepted Answer

Oil refineries use process costing to ca

Question 7

Shiffon Electronics manufactures music player.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department,the Programming department,and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Shiffon Electronics uses weighted-average costing.
The following information is available for the month of March 2017 for the Assembly department.
 
The cost details for the month of March are as follows:
Work in process,beginning inventory:
 
What is the direct materials cost per equivalent unit during March? (round to the nearest dollar)

Accepted Answer

A) $903 
B) $857 
C) $575 
D) $281 
A) $903 
B) $857 
C) $575 
D) $281

Question 8

Emerging Dock Company manufactures boat docks on an assembly line.Its standard costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department and the Finishing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.
Data for the Assembly Department for May 2017 are:

Costs for May:

What is the balance in ending work-in-process inventory?

Accepted Answer

A) $514,855 
B) $774,800 
C) $288,490 
D) $175,960 
A) $514,855 
B) $774,800 
C) $288,490 
D) $175,960

Question 9

Which of the following entries is correct to record depreciation expense of Assembly Department?

Accepted Answer

A) Debit: Work in Process-Assembly   
B) Debit: Work in Process-Assembly   
C) Debit: Finished Goods   
D) Debit: Accumulated Depreciation   
A) Debit: Work in Process-Assembly   
B) Debit: Work in Process-Assembly   
C) Debit: Finished Goods   
D) Debit: Accumulated Depreciation

Question 10

When a company has no opening or ending inventory during the month,the cost per unit is calculated by dividing the total costs incurred in the period by the total units produced during the period.

Accepted Answer

A) True 
 B)False

Question 11

Jordana Woolens is a manufacturer of wool cloth.The information for March is as follows:
   
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

@#IMG-DLM&_TB5540_00_TB5540_00

Question 12

Which of the following steps are part of the first-in,first-out (FIFO)process-costing method?

Accepted Answer

A) assignment of costs of the current period's equivalent units to the first units completed and transferred out of the process 
B) assumes as part of its first step that the most recently worked on units are completed and transferred out first 
C) assumes as part of its first step that there is no beginning work-in-process 
D) assignment of costs of the previous period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process 
A) assignment of costs of the current period's equivalent units to the first units completed and transferred out of the process 
B) assumes as part of its first step that the most recently worked on units are completed and transferred out first 
C) assumes as part of its first step that there is no beginning work-in-process 
D) assignment of costs of the previous period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process

Question 13

Lexington Company produces baseball bats and cricket paddles.It has two departments that process all products.During July,the beginning work in process in the cutting department was half completed as to conversion,and complete as to direct materials.The beginning inventory included $40,000 for materials and $60,000 for conversion costs.Ending work-in-process inventory in the cutting department was 40% complete.Direct materials are added at the beginning of the process.
Beginning work in process in the finishing department was 80% complete as to conversion.Direct materials for finishing the units are added near the end of the process.Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs.Ending inventory was 30% complete.Additional information about the two departments follows:
   
Required:
Prepare a production cost worksheet,using FIFO for the finishing department.

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00

Question 14

Serile Pharma places 800 units in production during the month of January.All 800 units are completed during the month.It had no opening inventory.Direct material costs added during January was $74,000 and conversion costs added during January was $8400.What is the total cost per unit of the product produced during January?

Accepted Answer

A) $103 
B) $10 
C) $80 
D) $93 
A) $103 
B) $10 
C) $80 
D) $93

Question 15

Which of the following companies is most likely to use process costing?

Accepted Answer

A) Crimpson Color,a company selling customized garments for niche customers 
B) Effel & Associates,a consulting firm providing various audit and related services 
C) Dental Bright Inc. ,a company manufacturing and selling toothpaste on a large scale 
D) Grimpy Corp. ,a company manufacturing furniture for customers as per their requirements 
A) Crimpson Color,a company selling customized garments for niche customers 
B) Effel & Associates,a consulting firm providing various audit and related services 
C) Dental Bright Inc. ,a company manufacturing and selling toothpaste on a large scale 
D) Grimpy Corp. ,a company manufacturing furniture for customers as per their requirements

Question 16

BIG Manufacturing Products has been using FIFO process costing for tracking the costs of its manufacturing activities.However,in recent months,the system has become somewhat bogged down with details.It seems that,when the company purchased Brown Electronics last year,its product lines increased six-fold.This has caused both the accountants and the suppliers of the information,the line managers,great difficulty in keeping the costs of each product line separate.Likewise,the estimation of the completion of ending work-in-process inventories and the associated costs has become very cumbersome.The chief financial officer of the company is looking for ways to improve the reporting system of product costs.
Required:
What can you recommend to improve the situation?

Accepted Answer

A beginning point would be to change to

Question 17

The journal entry for transfer from Department B to finished goods is:
Debit: Work in Process-Department B

Accepted Answer

A) True 
 B)False

Question 18

Shining Star Company uses an automated process to clean and polish its souvenir items.For March,the company had the following activities:
   
Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process.
Required:
Prepare a production cost worksheet using the FIFO method.

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00

Question 19

Shiffon Electronics manufactures music player.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department,the Programming department,and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Shiffon Electronics uses weighted-average costing.
The following information is available for the month of March 2017 for the Assembly department.
 
The cost details for the month of March are as follows:
Work in process,beginning inventory:
 
What are the equivalent units for direct materials and conversion costs,respectively,for March?

Accepted Answer

A) 1230 units;1230 units 
B) 1180 units;1230 units 
C) 1230 units;1180 units 
D) 1130 units;1180 units 
A) 1230 units;1230 units 
B) 1180 units;1230 units 
C) 1230 units;1180 units 
D) 1130 units;1180 units

Question 20

If manufacturing labor costs are added to the process at a different time compared to other conversion costs,an additional cost category-direct manufacturing labor costs-would be needed to assign these costs to products.

Accepted Answer

A) True 
 B)False

When calculating the equivalent units,we should only focus on dollar amounts of inventory.

Which of the following is true regarding estimates of completion of units in a process costing system?

A production cost worksheet is used to summarize total costs to account for,compute cost per equivalent unit,and assign total costs to units completed and to units in ending work-in-process.

The accuracy of the completion estimate of conversion costs depends on the care,skill,and experience of the estimator and also the nature of the conversion process.

The president of the Gulf Coast Refining Corporation wants to know why his golfing partner,who is the chief financial officer of a large construction company,calculates his costs by the job,but his own corporation calculates costs by large units rather than by individual barrel of oil.

Which of the following entries is correct to record depreciation expense of Assembly Department?

When a company has no opening or ending inventory during the month,the cost per unit is calculated by dividing the total costs incurred in the period by the total units produced during the period.

Which of the following steps are part of the first-in,first-out (FIFO)process-costing method?

Which of the following companies is most likely to use process costing?

The journal entry for transfer from Department B to finished goods is: Debit: Work in Process-Department B

If manufacturing labor costs are added to the process at a different time compared to other conversion costs,an additional cost category-direct manufacturing labor costs-would be needed to assign these costs to products.

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

When calculating the equivalent units,we should only focus on dollar amounts of inventory.

Which of the following is true regarding estimates of completion of units in a process costing system?

A production cost worksheet is used to summarize total costs to account for,compute cost per equivalent unit,and assign total costs to units completed and to units in ending work-in-process.

The accuracy of the completion estimate of conversion costs depends on the care,skill,and experience of the estimator and also the nature of the conversion process.

The president of the Gulf Coast Refining Corporation wants to know why his golfing partner,who is the chief financial officer of a large construction company,calculates his costs by the job,but his own corporation calculates costs by large units rather than by individual barrel of oil.

Which of the following entries is correct to record depreciation expense of Assembly Department?

When a company has no opening or ending inventory during the month,the cost per unit is calculated by dividing the total costs incurred in the period by the total units produced during the period.

Which of the following steps are part of the first-in,first-out (FIFO)process-costing method?

Which of the following companies is most likely to use process costing?

The journal entry for transfer from Department B to finished goods is: Debit: Work in Process-Department B

If manufacturing labor costs are added to the process at a different time compared to other conversion costs,an additional cost category-direct manufacturing labor costs-would be needed to assign these costs to products.

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