Deck 14: Process-Costing Systems

Question 1

In a job- cost system all costs for a particular product service or batch of product are recorded on the:

A) job- cost record
B) labor time ticket
C) materials requisition form
D) budgeted overhead rate

Answer 1

A

Question 2

Nicholson Company produces plastic cups in a one- department process. The following information is available: $\begin{array}{lr}\text { Work-in-process inventory, beginning }&-0-\\\text { Units started } & 60,000 \\\text { Units completed and transferred out } & 48,000 \\\text { Work-in-process inventory, ending } & 12,000\end{array}$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The equivalent units for conversion costs are:

A) 12,000
B) 36,000
C) 55,200
D) 60,000

Answer 2

55,200

Question 3

A debit to Direct- Materials Inventory is used to record:

A) cost of goods completed
B) a requisition of direct materials
C) purchase of direct materials
D) a sale of merchandise

Answer 3

C

Question 4

A debit to Finished- Goods Inventory is used to record:

A) purchase of direct materials
B) requisition of direct materials
C) cost of goods completed
D) a sale of merchandise

Question 5

Paste 'em Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: The unit cost for conversion costs is:

A) $3.08
B) $2.80
C) $2.88
D) $2.62

Question 6

Hit or Miss Hospital uses a job- cost system for all patients who have surgery. In January, the pre- operating room (PRE- OP) and operating room (OR) had budgeted allocation bases of 2,000 nursing hours and 1,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $84,000 and $66,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $600,000 and 7,500 nursing hours for the month. For patient Sid Caesar, actual hours incurred were eight and four hours, respectively, in the
PRE- OP and OR rooms. Sid Caesar was in the hospital for 4 days (96 hours). Other costs related to Sid Caesar were: $$\begin{array} { l l l l } & \text { PRE- OP } & \text { OR } & \text { In- room } \\& \underline { \text { Cost } } & \underline { \text { Cost } } & \underline { \text { Cost } } \\\text { Patient medicine } & \$ 100 & \$ 250 & \$ 1,200 \\\text { Direct nursing time } & 2,400 & 3,500 & 5,400\end{array}$$ The hospital uses a budgeted overhead rate for applying overhead to patient stays. The total cost of the stay of patient Sid Caesar is:

A) $1,550
B) $8,280
C) $11,300
D) $21,130

Question 7

Savage Clothing had 40,000 shirts in process at May 31 (50% converted). All direct materials are added at the beginning of the production process. During the month, 140,000 shirts were transferred to Finished Goods Inventory. There was no beginning inventory. were started during May.

A) 90,000 shirts
B) 140,000 shirts
C) 100,000 shirts
D) 180,000 shirts

Question 8

is the system which applies costs to like products that are usually mass produced in continuous fashion through a series of production processes.

A) Job- order costing
B) Process costing
C) Variable costing
D) JIT costing

Question 9

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The total cost of goods transferred out of the Printing department is:

A) $742,500
B) $688,800
C) $714,000
D) $813,972

Question 10

Spiral Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: $\begin{array}{lr}\text { Work-in-process inventory, June } 1\\\text { Units } & 15,000 \text { units } \\\text { Direct materials ( } 100 \% \text { complete) } & \$ 34,000 \\\text { Conversioncosts }(30 \% \text { complete) } & \$ 14,000\\\text { Units started in June } & 65,000 \text { units } \\\text { Units completed in June } & 62,000 \\\text { units Work-in-process inventory,June 30 } & 18,000\text { units }\\\text { ( } 100 \% \text { complete as to materials }\\\text { and } 60 \% \text { complete as to conversioncosts) }\\\text { Direct materials added in June } & \$ 285,000 \\\text { Conversioncostsadded in June } & \$ 210,000\end{array}$ The total cost of the ending work- in- process inventory is:

A) $127,260
B) $111,996
C) $122,175
D) $105,084

Question 11

Speedwagon Company produces calendars in a one- department process. The following information is available: $\begin{array}{ll}\text { Direct materials added } & \$ 30,000 \\\text { Direct labor } & \$ 20,700 \\\text { Factory overhead } & \$ 10,350\\\text { Work-in- process inventory, beginning }&-0-\\\text { Units started } & 15,000 \\\text { Units completed and transferred out } & 12,000 \\\text { Work-in- process inventory, ending } & 3,000\end{array}$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of one completed unit is:

A) $5.08
B) $4.07
C) $4.42
D) $4.25

Question 12

Dusty Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{ll}\text { Direct material s added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & 230,200 \\\text { Total costs to account for } & \$ 1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs.The entry to record the units completed and transferred to Finishing includes a:

A) debit to Work- in- Process Inventory, Assembly for $887,040
B) credit to Work- in- Process Inventory, Finishing for $862,848
C) credit to Work- in- Process Inventory, Assembly for $887,040
D) debit to Work- in- Process Inventory, Finishing for $862,848

Question 13

Choosing direct labor cost rather than direct labor hours as a cost driver for overhead implies that:

A) direct labor cost data is easier to obtain
B) higher paid employees use proportionally more support cost
C) lower paid employees use proportionally less support cost
D) direct labor hour data is easier to obtain

Question 14

Betty Company uses a job- order- cost system and had the following data available: $\begin{array}{ll}\text { Beginning dir ect - materials inventory } & \$ 26,000 \\\text { Beginning WIP inventory } & 64,000 \\\text { Beginning fini shed-goods inventory } & 58,000 \\\text { Direct material s purchased on account } & 148,000 \\\text { Direct materials requisitioned } & 82,000\\\text { Direct-lab or cost incurred } & 130,000 \\\text { Factory overhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$ (as a percent of direct- labor cost) The journal entry to record the sale of all jobs would include a:

A) debit to Finished- Goods Inventory for $292,000
B) credit to Cost of Goods Sold for $292,000
C) credit to WIP Inventory for $256,000
D) credit to Finished- Goods Inventory for $256,000

Question 15

Sabbath Company produces plastic cups in a one- department process. The following information is available: $\begin{array} { l } \text {Work-in- process inventory, beginning }& 0\\ \text { Unitsstarted}& 60,000\\ \text {Units complete and transferred out }&48,000 \\ \text {Work-in- process inventory,ending }&12,000 \\ \text {Direct materials added }& \$240,000\\ \text {Direct labor }&\$165,600 \\ \text {Factory overhead }&\$82,800 \\\end{array}$
The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The total cost of units completed and transferred is:

A) $456,000
B) $408,000
C) $488,400
D) $90,240

Question 16

Identify which one of the following statements regarding process costing is true.

A) The unit cost for inventory purposes is calculated by accumulating the costs of all processing departments and dividing the total costs by the number of units produced.
B) Individual jobs exist in process costing.
C) Process- costing systems are usually simpler than job- order costing systems.
D) The process- costing approach does not distinguish among individual units of product.

Question 17

would be part of the entry to record the sale of goods.

A) A debit to WIP Inventory
B) A credit to Cost of Goods Sold
C) A debit to Sales
D) A credit to Finished- Goods Inventory

Question 18

is supported by a file of job- cost records for partially completed jobs.

A) The WIP Inventory account
B) The Finished- Goods Inventory account
C) The Direct- Materials Inventory account
D) The Cost of Goods Sold account

Question 19

would be part of the entry to record the incurrence of direct labor costs.

A) A credit to Cost of Goods Sold
B) A credit to WIP Inventory
C) A credit to Finished- Goods Inventory
D) A credit to Accrued Payroll

Question 20

For external reporting purposes, the costs incurred in the production and distribution phases of the value chain are:

A) period costs
B) product costs
C) period cost and product cost, respectively
D) product cost and period cost, respectively

Question 21

In a production- cost report, the total costs accounted for is equal to the cost of units completed and transferred plus the cost of:

A) ending work- in- process inventory
B) beginning work- in- process inventory
C) the units started and finished
D) the units completed but still on hand

Question 22

is better suited for a single physical unit or a few like units.

A) The product- costing system
B) The job- order- costing system
C) The period- costing system
D) The process- costing system

Question 23

would be part of the entry to record application of factory costs.

A) A debit to Factory Department Overhead Control
B) A debit to Factory Overhead Applied
C) A debit to WIP Inventory
D) A credit to Cost of Goods Sold

Question 24

In process costing, the journal entry to record direct labor would include a:

A) credit to Finished Goods
B) debit to Accrued Payroll
C) credit to Factory Overhead
D) debit to Work- in- Process Inventory, Department Name

Question 25

The overhead application rate is lower when an activity- based- costing approach is used than when a traditional approach is used because:

A) more costs are directly traced
B) costs are spread over more value- chain activities
C) nonvalue- added costs are eliminated
D) less costs are incurred

Question 26

Booker Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows:
$\begin{array}{lr}\text { Direct materials added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & 230,200\\\text { Total costs to account for }&\$1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The equivalent units for materials are:

A) 67,800
B) 12,800
C) 76,800
D) 80,000

Question 27

Big Show Clothing had 40,000 shirts in process at May 31 (50% converted). All direct materials are added at the beginning of the production process. During the month 140,000 shirts were transferred to Finished Goods Inventory. There was no beginning inventory. The equivalent units for conversion costs for May are:

A) 160,000 shirts
B) 118,000 shirts
C) 180,000 shirts
D) 140,000 shirts

Question 28

Tear Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: $$\begin{array}{l}\text { Work- in- process inventory, June } 1\\\begin{array} { l r } \text { Units } & 15,000 \text { units } \\\text { Direct materials (100\% complete) } & \$ 34,000 \\\text { Conversioncosts( } 30 \% \text { complete) } & \$ 14,000 \\& \\\text { Units started in June } & 65,000 \text { units } \\\text { Units completed in June } & 62,000 \\\text { units Work-in-process inventory,June 30 } & 18,000 \\\text { units } & \\\quad ( 100 \% \text { complete as to materials } & \\\text { and } 60 \% \text { complete as to conversioncosts) } \\& \\\text { Direct materials added in June } & \$ 285,000\\\text { Conversioncostsadded in June } & \$ 210,000\end{array}\end{array}$$ The total cost of goods transferred out of the Printing department is:

A) $420,825
B) $543,000
C) $438,340
D) $495,000

Question 29

would be part of the entry to record the requisition of direct materials.

A) A credit to Accounts Payable
B) A credit to WIP Inventory
C) A debit to Finished- Goods Inventory
D) A credit to Direct- Materials Inventory

Question 30

Identify which of the following statements regarding job- order costing is true.

A) In job- order costing the measure of production is small, whereas in process costing the measure of production is large.
B) Job- order costing deals with great masses of like units.
C) Job- order costing is an averaging process.
D) Job- order costing is one of the two common systems of product costing.

Question 31

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The unit cost for conversion is:

A) $2.41
B) $2.73
C) $2.26
D) $2.24

Question 32

Hulkster Clothing had 40,000 shirts in process at May 31 (50% converted). All materials are added at the beginning of the production process. During the month, 140,000 shirts were transferred to Finished Goods Inventory. There was no beginning inventory. The equivalent units for materials costs for May using the weighted- average method are:

A) 90,000 shirts
B) 140,000 shirts
C) 160,000 shirts
D) 180,000 shirts

Question 33

Heartbreak Kid Company manufactures potato chips in a two- department process: Cutting and Frying. In the Cutting department 10,000 pounds were started in production and 8,400 pounds were completed and transferred to the Frying department, while 1,600 pounds were still in process. These pounds were only 75% complete as far as conversion costs. The equivalent units for conversion costs are:

A) 8,400
B) 9,600
C) 10,000
D) 1,600

Question 34

Wheels Company uses a backflush- costing system to produce bicycles. Bicycles are scheduled for production only after orders are recorded and products are shipped to customers immediately upon completion. No finished goods inventory is maintained and product costs are applied directly to cost of goods sold. Standard cost for materials and conversion is $150 and $75, respectively. During the current month, Wheels purchased $6,000 of direct materials and incurred $3,300 in conversion cost to produce 40 units. The entry to record the purchase of materials includes a debit to:

A) Finished- Goods Inventory
B) Materials Inventory
C) Work- in- Process Inventory
D) Cost of Goods Sold

Question 35

Vicious Company produces plastic cups in a one- department process. The following information is available: $\begin{array} { l } \text {Work-in- process inventory, beginning }& 0\\ \text { Unitsstarted}& 60,000\\ \text {Units complete and transferred out }&48,000 \\ \text {Work-in- process inventory,ending }&12,000 \\ \text {Direct materials added }& \$240,000\\ \text {Direct labor }&\$165,600 \\ \text {Factory overhead }&\$82,800 \\\end{array}$
The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of one completed unit is:

A) $8.84
B) $10.18
C) $8.50
D) $8.14

Question 36

Rippem Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: $$\begin{array}{l}\text { Work- in- process inventory, June } 1\\\begin{array} { l r } \text { Units } & 15,000 \text { units } \\\text { Direct materials (100\% complete) } & \$ 34,000 \\\text { Conversioncosts( } 30 \% \text { complete) } & \$ 14,000 \\& \\\text { Units started in June } & 65,000 \text { units } \\\text { Units completed in June } & 62,000 \\\text { units Work-in-process inventory,June 30 } & 18,000 \\\text { units } & \\\quad ( 100 \% \text { complete as to materials } & \\\text { and } 60 \% \text { complete as to conversioncosts) } \\& \\\text { Direct materials added in June } & \$ 285,000\\\text { Conversioncostsadded in June } & \$ 210,000\end{array}\end{array}$$ The equivalent units for materials are:

A) 80,000
B) 77,000
C) 83,000
D) 62,000

Question 37

Spokes Company uses a backflush- costing system to produce bicycles. Bicycles are scheduled for production only after orders are recorded and products are shipped to customers immediately upon completion. No finished goods inventory is maintained and product costs are applied directly to cost of goods sold. Standard cost for materials and conversion is $150 and $75, respectively. During the current month, Spokes Company purchased $6,000 of direct materials and incurred
$3,300 in conversion cost to produce 40 units. The entry to apply cost to completed goods includes a debit to:

A) Cost of Goods Sold for $9,300
B) Finished- Goods Inventory for $9,300
C) Cost of Goods Sold for $9,000
D) Work- in- Process Inventory for $9,000

Question 38

In process costing, the journal entry to record factory overhead applied would include a:

A) debit to Work- in- Process Inventory, Department Name
B) debit to Factory Overhead
C) credit to Finished Goods
D) credit to Cost of Goods Sold

Question 39

Journey Company produces plastic cups in a one- department process. The following information is available: $\begin{array} { l } \text {Work-in- process inventory, beginning }& 0\\ \text { Unitsstarted}& 60,000\\ \text {Units complete and transferred out }&48,000 \\ \text {Work-in- process inventory,ending }&12,000 \\ \text {Direct materials added }& \$240,000\\ \text {Direct labor }&\$165,600 \\ \text {Factory overhead }&\$82,800 \\\end{array}$
The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of the ending work- in- process inventory is:

A) $122,100
B) $102,000
C) $61,200
D) $80,400

Question 40

A debit to Cost of Goods Sold is used to record:

A) cost of goods completed
B) a sale of merchandise
C) a requisition of direct materials
D) purchase of direct materials

Question 41

Hallelujah Company uses a job- order- cost system and had the following data available:
$\begin{array}{ll}\text { Beginningdirect-materialsinventory } & \$ 26,000 \\\text { BeginningWIP inventory } & 64,000 \\\text { Beginningfinished-goods inventory } & 58,000 \\\text { Direct materialspurchased on account } & 148,000 \\\text { Direct materialsrequisitioned } & 82,000\\\text { Direct- labor cost incurred } & 130,000 \\\text { Factory overhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$ (as a percent of direct- labor cost)
The journal entry to record the purchase of direct materials would include a:

A) credit to WIP Inventory for $148,000
B) credit to Direct- Materials Inventory for $148,000
C) debit to WIP Inventory for $148,000
D) debit to Direct- Materials Inventory for $148,000

Question 42

Banana Seat Company uses a backflush- costing system to produce bicycles. Bicycles are scheduled for production only after orders are recorded and products are shipped to customers immediately upon completion. No finished goods inventory is maintained and product costs are applied directly to cost of goods sold. Standard cost for materials and conversion is $150 and $75, respectively. During the current month, Banana Seat Company purchased $6,000 of direct materials and incurred $3,300 in conversion cost to produce 40 units. The entry to eliminate the conversion cost variance includes a debit to:

A) Costs of Goods Sold for $300
B) Finished- Goods Inventory for $300
C) Conversion Costs for $300
D) None of these answers is correct.

Question 43

Hybrid- costing systems use a combination of:

A) job- order costing and process costing ideas
B) fixed and variable costs
C) value- added and nonvalue- added costs
D) direct and indirect costs

Question 44

Broderick Company manufactures phones in a two- department process: Assembly and Finishing. Information on the first department, Assembly, follows: $\begin{array}{ll}\text { Direct materials added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & \underline{230,200} \\\text { Total costs to account for } & \$ 1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The entry to record the requisition of direct materials includes a debit to:

A) Finished- Goods Inventory for $336,000
B) Work- in- Process Inventory, Assembly for $336,000
C) Work- in- Process Inventory, Finishing for $336,000
D) Direct- Materials Inventory for $336,000

Question 45

Costs incurred in a previous department for items that have been received by a subsequent department are called:

A) prior period
B) transferred- in- costs
C) accumulated
D) variable costs

Question 46

Ultimate Warrior Company produces plastic cups in a one- department process. The following information is available: $\begin{array}{ll}\text { Work-in-process inventory,beginning }&0\\\text { Units started } & 60,000 \\\text { Units complete and transferred out } & 48,000 \\\text { Work-in-process inventory,ending } & 12,000 \\\text { Direct materialsadded } & \$ 240,000 \\\text { Direct labor } & \$ 165,600 \\\text { Factory overhead } & \$ 82,800\end{array}$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The unit cost of conversion costs is:

A) $0.88
B) $4.50
C) $4.14
D) $5.18

Question 47

Brutus Beefcake Company manufactures tape dispensers. Its Assembly department had the following output and costs: $\begin{array}{ll}\text { Units started and completed } & 70,000 \\\text { Started andin process } & 10,000\end{array}$ These units had all materials added but were only 60% completed for conversion costs. Direct materials costs were $480,000; conversion costs were $240,000. The total cost of units completed and transferred to Finishing is:

A) $630,000
B) $720,000
C) $641,200
D) $690,000

Question 48

Process costing can be used for:

A) manufacturing activities only
B) nonmanufacturing activities only
C) both manufacturing and nonmanufacturing activities
D) neither manufacturing nor nonmanufacturing activities

Question 49

Golddust Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{ll}\text { Direct materials added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & \underline{230,200} \\\text { Total costs to account for } & \$ 1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, whole 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The ending balance in Work- in- Process Inventory, Assembly is:

A) $862,848
B) $168,960
C) $140,160
D) $887,040

Question 50

The central product costing problem is how each department computes the cost of:

A) uncompleted goods remaining in the department and completed goods transferred
B) uncompleted goods sold and completed goods sold
C) uncompleted goods transferred and completed goods sold
D) All of these answers are correct.

Question 51

Muhammad Company produces calendars in a one- department process. The following information is available: $$\begin{array} { l c } \text { Directmaterialsadded } & \$ 30,000 \\\text { Directlabor } & \$ 20,700 \\\text { Factory overhead } & \$ \mathbf { 1 0 , 3 5 0 } \\\text { Work-in-process inventory,beginning } & - \mathbf { 0 - } \\\text { Units started } & \mathbf { 1 5 , 0 0 0 } \\\text { Units completed and transferred out } & \mathbf { 1 2 , 0 0 0 } \\\text { Work-in-process inventory,ending } & \mathbf { 3 , 0 0 0 }\end{array}$$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The total of costs to account for is:

A) $20,700
B) $50,700
C) $30,000
D) $61,050

Question 52

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The equivalent units for conversion costs are:

A) 123,000
B) 139,200
C) 132,450
D) 150,000

Question 53

is a job- cost source document.

A) A labor time ticket
B) An inventory summary record
C) A budgeted overhead rate
D) A job- cost record

Question 54

Jake the Snake Company manufactures tape dispensers. Its Assembly department had the following output and costs: Units started and completed 70,000
Started and in process 10,000
These units had all materials added but were only 60% complete as far as conversion costs. Direct materials costs were $480,000; conversion costs were $240,000. The cost of one completed unit in the Assembly department is:

A) $ 9.16
B) $10.29
C) $ 9.00
D) $ 9.47

Question 55

Cuckoo Company produces plastic cups in a one- department process. The following information is available: $\begin{array}{ll}\text { Work-in-process inventory, beginning } & -0- \\\text { Units started } & 60,000 \\\text { Units completed and transferred out } & 48,000 \\\text { Work-in-process inventory, ending } & 12,000\end{array}$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The equivalent units for materials are:

A) 36,000
B) 38,400
C) 60,000
D) 12,000

Question 56

are the number of completed units that could have been produced from the inputs applied.

A) Physical units
B) Partial units
C) Conversion units
D) Equivalent units

Question 57

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The unit cost for materials is:

A) $2.85
B) $3.19
C) $3.48
D) $3.89

Question 58

would be part of the entry to record the cost of goods completed.

A) A debit to Cost of Goods Sold
B) A credit to WIP Inventory
C) A debit to Factory Department Overhead Control
D) A credit to Finished- Goods Inventory

Question 59

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The equivalent units for materials are:

A) 150,000
B) 154,500
C) 123,000
D) 145,500

Question 60

Jimbo Company uses a job- order- cost system and had the following data available: $\begin{array}{ll}\text { Beginning direct- materials inventory } & \$ 26,000 \\\text { Beginning WIP inventory } & 64,000 \\\text { Beginning finished- goods inventory } & 58,000 \\\text { Direct mat erial s purchased on account } & 148,000 \\\text { Direct mat erial s requisitioned } & 82,000\\\text { Direct-labor cost incurred } & 130,000 \\\text { Fact ory overhe ad incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$ (as a percent of direct- labor cost) The journal entry to record the factory overhead costs incurred would include a:

A) credit to Factory Department Overhead Control for $162,500
B) credit to WIP Inventory for $162,500
C) debit to WIP Inventory for $146,000
D) debit to Factory Department Overhead Control for $146,000

Question 61

Wolverine Company manufactures tape dispensers. Its Assembly department had the following output and costs: $\begin{array}{ll}\text { Units started and completed } & 70,000 \\\text { Started and in process } & 10,000\end{array}$ These units had all materials added but were only 60% complete as far as conversion costs. Direct materials costs were $480,000; conversion costs were $240,000. The unit cost of direct materials is:

A) $6.00
B) $1.67
C) $6.86
D) $3.32

Question 62

Matthew Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{ll}\text { Direct material s added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & 230,200 \\\text { Tot col costs to account for } & \$ 1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The unit cost of conversion costs is:

A) $3.00
B) $9.00
C) $6.00
D) $8.64

Question 63

Road Warriors Company manufactures tape dispensers. Its Assembly department had the following output and costs: $\begin{array}{ll}\text { Units started and completed } & 70,000 \\\text { Started and in process } & 10,000\end{array}$ These units had all materials added but were only 60% completed for conversion costs. Direct materials costs were $480,000; conversion costs were $240,000. The total cost of ending
Work- in- process inventory is:

A) $60,000
B) $90,000
C) $91,600
D) $78,960

Question 64

Mercy Hospital uses a job- cost system for all patients who have surgery. In January, the pre- operating room (PRE- OP) and operating room (OR) had budgeted allocation bases of 2,000 nursing hours and 1,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $84,000 and $66,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $600,000 and 7,500 nursing hours for the month. For patient Jesse Johnson, actual hours incurred were eight and four hours, respectively, in the PRE- OP and OR rooms. Jesse Johnson was in the hospital for 4 days (96 hours). Other costs related to Jesse Johnson were:
$$\begin{array} { l l l l } & \text { PRE- OP } & \text { OR } & \text { In- room } \\& \underline { \text { Cost } } & \underline { \text { Cost } } & \underline { \text { Cost } } \\\text { Patient medicine } & \$ 100 & \$ 250 & \$ 1,200 \\\text { Direct nursing time } & 2,400 & 3,500 & 5,400\end{array}$$ The hospital uses a budgeted overhead rate for applying overhead to patient stays. The budgeted nursing overhead rate for PRE- OP cost is:

A) $43.25
B) $66.00
C) $80.00
D) $42.00

Question 65

Foreman Company produces calendars in a one- department process. The following information is available: $\begin{array}{ll}\text { Direct materials added } & \$ 30,000 \\\text { Direct labor } & \$ 20,700 \\\text { Factory overhead } & \$ 10,350\\\text { Work-in- process inventory, beginning }&-0-\\\text { Units started } & 15,000 \\\text { Units completed and transferred out } & 12,000 \\\text { Work-in- process inventory, ending } & 3,000\end{array}$ The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The equivalent units for materials are:

A) 15,000
B) 13,800
C) 3,000
D) 12,000

Question 66

is an example of a product that would not be manufactured using process costing.

A) Glass
B) A building
C) Flour
D) Toothpaste

Question 67

Identify which one of the following statements regarding backflush costing is false.

A) Backflush costing does not have a Work- in- Process Inventory account.
B) Backflush costing has only one category of costs: conversion costs.
C) Costs are transferred out almost immediately after being initially recorded.
D) Some backflush- costing systems eliminate the Finished- Goods Inventory account and transfer costs directly to Cost of Goods Sold.

Question 68

is supported by a file of completed job- cost records.

A) The Cost of Goods Sold account
B) The Finished- Goods Inventory account
C) The WIP Inventory account
D) The Direct- Materials Inventory account

Question 69

A debit to WIP Inventory is used to record:

A) a requisition of direct materials
B) purchase of direct materials
C) a sale of merchandise
D) cost of goods completed

Question 70

Identify which of the following industries is most likely not to use a job- order costing system.

A) construction
B) printing
C) lumber
D) aircraft

Question 71

is a product cost.

A) Selling cost
B) Direct material cost
C) Distribution cost
D) Administrative cost

Question 72

Stone Cold Company manufactures potato chips in a two- department process: Cutting and Frying. In the Cutting department 10,000 pounds were started in production and 8,400 pounds were completed and transferred to the Frying department, while 1,600 pounds were still in process. These pounds were only 75% complete as far as conversion costs. The equivalent units for materials are:

A) 8,400
B) 9,600
C) 1,600
D) 10,000

Question 73

Cable Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{ll}\text { Direct materials added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & 230,200 \\\text { Total costs to account for } & \$ 1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The cost of a finished unit is:

A) $12.84
B) $13.20
C) $15.29
D) $17.20

Question 74

is not a step in process costing.

A) Calculating output in terms of equivalent units
B) Calculating unit costs
C) Summarizing the total costs by job
D) Summarizing the total costs to account for

Question 75

Barney Company uses a job- order- cost system and had the following data available: $\begin{array} { l } \text { Beginningdirect- materials inventory}&\$ 26,000 \\ \text {Beginning WIP inventory }&64,000 \\ \text {Beginningfinished-goods inventory }&58,000 \\ \text {Direct materials purchased on account }&148,000 \\ \text { Direct materials requisitioned}&82,000 \\ \text {Direct- labor cost incurred }&130,000 \\\text { Factoryoverhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$
(as a percent of direct- labor cost) The ending inventory of direct materials is:

A) $108,000
B) $174,000
C) $92,000
D) $82,000

Question 76

Bueller Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{lr}\text { Direct materials added } & \$ 336,000 \\\text { Direct labor } & 460,800 \\\text { Factory overhead } & 230,200\\\text { Total costs to account for }&\$1,027,200\end{array}$ There was no beginning inventory, and of the 80,000 units started in production 67,200 were completed and transferred to the Finishing department, while 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The equivalent units for conversion costs are:

A) 12,800
B) 67,200
C) 80,000
D) 76,800

Question 77

Tearjerkers Company manufactures generic greeting cards. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of September follow: $\text { Work-in-process inventory, September } 1$
Units $\quad$ 22,500 units
Directmaterials(100\% complete) $\quad \mathbf{\$ 5 1 , 0 0 0}$
Conversion costs ( $30 \%$ complete) $\quad \$ 20,472$
Units started inSeptember $\quad$ 127,500 units
Units completed in September $\quad$ 123,000 units
Work-in-process inventory September 30 $\quad$$\quad$ 27,000 units
( $\mathbf{1 0 0} \%$ complete as to materials
and $60 \%$ complete as to conversion costs)
Directmaterialsadded in September $\quad\quad\$ 427,500$
Conversioncosts added in September $\quad\quad \$ 315,000$ The total cost of the ending work- in- process inventory is:

A) $128,520
B) $151,200
C) $125,172
D) $90,720

Question 78

Notes Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: $$\begin{array}{l}\text { Work- in- process inventory, June } 1\\\begin{array} { l r } \text { Units } & 15,000 \text { units } \\\text { Direct materials (100\% complete) } & \$ 34,000 \\\text { Conversioncosts( } 30 \% \text { complete) } & \$ 14,000 \\& \\\text { Units started in June } & 65,000 \text { units } \\\text { Units completed in June } & 62,000 \\\text { units Work-in-process inventory,June 30 } & 18,000 \\\text { units } & \\\quad ( 100 \% \text { complete as to materials } & \\\text { and } 60 \% \text { complete as to conversioncosts) } \\& \\\text { Direct materials added in June } & \$ 285,000\\\text { Conversioncostsadded in June } & \$ 210,000\end{array}\end{array}$$ The equivalent units for conversion costs are:

A) 62,000
B) 72,800
C) 80,000
D) 68,300

Question 79

In process costing, the journal entry to transfer completed units from Department A to Department B would include a:

A) credit to Direct Materials Inventory
B) debit to Department B
C) debit to Department A
D) credit to Department B

Question 80

Identify which of the following industries is most likely to use a job- order costing system.

A) chemicals
B) meat packing
C) plastics
D) printing