978-0077826482 Chapter 3 Part 1

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Chapter 03 Process Costing Answer Key

True / False Questions

1. Process costing is used to calculate the cost of homogenous goods or

services.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Basic concepts in process costing

2. A major difference between job order costing and process costing is the

treatment of nonmanufacturing costs.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Flow of costs in process costing

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3. A separate Work in Process Inventory account is used in process costing for

each major production process.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Flow of costs in process costing

4. Process costing often combines direct materials and direct labor into a single

category called conversion costs.

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5. The process costing production report is used to determine how much

manufacturing cost to transfer out of Finished Goods Inventory and into Cost

of Goods Sold.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Process costing production report

6. The process costing production report can be prepared using either the

weighted-average method or the last-in, first-out (LIFO) method.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Process costing production report

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7. The key difference between a process costing production report prepared

using one of the two acceptable methods is how they deal with any units and

costs that are in ending Work in Process Inventory.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Process costing production report

8. Equivalent units for materials may differ from the equivalent units for

conversion costs.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

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9. An equivalent unit is a measure used to convert costs incurred in the previous

period to costs incurred in the current period.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

10. Under the weighted-average method, the only partially completed units that

need to be addressed are the units in beginning inventory.

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11. Cost per equivalent unit is calculated separately for direct materials and for

conversion costs.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

12. The total cost of Work in Process incurred in one department during the period

must be allocated between costs transferred to the next department and costs

transferred to Finished Goods.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

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13. The production report contains information about the number of physical units

and equivalent units, but not their costs.

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Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Step 5: Prepare a production report

14. Under the FIFO method, the units completed during the period must be

allocated between beginning units in process and units started and

completed.

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Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

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15. Under process costing when the product is through the last production

process, the journal entry for total manufacturing cost includes a debit to Work

in Process Inventory and a credit to Finished Goods Inventory.

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Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

Multiple Choice Questions

16. Which of the following is not a characteristic of process costing?

A. Products are homogenous.

B. Costs are traced to production processes rather than products.

D. Processes are standardized.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Basic concepts in process costing

17. Which of the following is a characteristic of process costing?

A. Products are unique.

B. Costs are traced to products rather than to production

processes.

D. It can only be used for manufacturing firms and not used for service firms.

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18. Which of the following companies would most likely use process costing?

B. A law firm

C. A custom garden equipment manufacturer

D. A home remodeling company

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19. Consider a winery that employs eight people who work 40 hours per week (full

time), four people who work 20 hours per week, and one person who works 10

hours per week. How many full-time equivalent employees does the winery

employ?

A. 8

B. 10

C. 10.25

To calculate the number of full-time equivalent employees, determine the

number of equivalent units of employees. Each employee who works 40 hours

per week counts as one full-time equivalent employee. (8 FTE = 8 employees

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Pioneers in sustainability

Topic: Step 2: Convert physical units into equivalent units

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20. Which of the following statements is not correct with respect to Fetzer

Vineyards’s sustainability efforts?

bottom line sustainability accounting in 2014.

B. Fetzer accounts for its profit (one component of the triple bottom line) based

on growth and dollars.

C. Fetzer accounts for its plant impact (one component of the triple bottom

line) by protecting its environment.

D. Fetzer accounts for its people impact (one component of the triple bottom

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21. Conversion costs consist of:

A. all costs of production.

B. raw materials and direct labor.

C. direct labor and manufacturing overhead.

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Flow of costs in process costing

22. Under process costing, which manufacturing costs are assigned to the product

as it moves from one manufacturing process to the next?

A. Direct materials, direct labor, and conversion costs

B. Direct materials, indirect materials, and manufacturing overhead

D. Direct materials, direct labor, and indirect labor

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Flow of costs in process costing

23. Which of the following statements is true?

A. A process costing system will have a single Work in Process Inventory

account.

account for each of the major processes.

C. A job costing system will have a separate Work in Process Inventory

account for each of the major processes.

D. A process costing system will have a separate Raw Materials Inventory

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24. Which of the following accounts will be treated differently by a process costing

system as compared to a job order costing system?

A. Raw Materials Inventory

C. Finished Goods Inventory

D. Cost of Goods Sold

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Learning Objective: 03-01 Describe the key features of a process costing system.

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25. Which of the following statements is incorrect regarding the production

costing report?

on an annual basis.

B. The production report provides information about the number of units and

manufacturing costs that flow through a production process during an

accounting period.

C. The production report is used to determine how much manufacturing cost to

transfer out of Work in Process Inventory and into the next processing

department or finished goods if it is the last production process.

D. The production report is used to value any units that are in process at the

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Learning Objective: 03-01 Describe the key features of a process costing system.

Topic: Process costing production report

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26. Which of the following statements is correct with respect to the differences

between using the weighted-average method or the FIFO method of preparing

a process production report?

A. Use of FIFO is acceptable for GAAP, while use of weighted-average

method is not.

B. FIFO is simpler to use than the weighted-average

method.

C. Use of FIFO or weighted-average results in large differences for companies

that maintain minimal work-in-process inventory.

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Learning Objective: 03-01 Describe the key features of a process costing system.

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27. Which of the following is not a category used to reconcile the number of

physical units using the weighted average method of process costing?

A. Units started

B. Ending units in inventory

D. Units completed

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Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

28. To reconcile the number of physical units using the weighted average method

of process costing, one must determine whether the units were:

B. sold or still in inventory at the end of the

period.

C. in the next production process or sold at the end of the period.

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Learning Objective: 03-02 Reconcile the number of physical units using the

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Topic: Step 1: Reconcile the number of physical units

29. To reconcile the number of physical units using the weighted average method

of process costing, one must determine whether the units were:

A. in process at the beginning of the period or were completed at the

beginning of the period.

B. in process at the beginning of the current period or in process at the

beginning of the previous period.

C. in process at the beginning of the period or were sold at the beginning of

the period.

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30. Which of the following relationships is correct?

in inventory

B. Units started = beginning units in inventory + units completed + ending units

in inventory

C. Units started – beginning units in inventory = units completed + ending units

in inventory

D. Ending units in inventory + beginning units in inventory = units started –

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31. How could a firm using the weighted average method of process costing

calculate how many units were worked on during a period?

A. Add beginning units in inventory and units completed

B. Add beginning units in inventory and ending units in

inventory

D. Add units started and units completed

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Topic: Step 1: Reconcile the number of physical units

32. Every unit that passes through the production process must have been

counted in which category of physical units at some point?

A. Beginning units in inventory

C. Ending units in inventory

D. Units completed

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Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

33. Brody Corp. uses a process costing system. Beginning inventory for January

consisted of 1,300 units that were 40% completed. 13,000 units were started

during January. On January 31, the inventory consisted of 650 units that were

70% completed. How many units were completed during the period?

A. 12,350

C. 14,300

D. 14,950

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34. Braden Corp. uses a process costing system. Beginning inventory for January

consisted of 1,300 units that were 60% completed. 13,000 units were started

into the process during January. During January, 12,000 units were completed.

How many units were in ending inventory on January 31?

A. 1,950

B. 1,300

C. 650

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35. Bildy Corp. uses a process costing system. During January, 14,000 units were

started, and 18,000 units were completed. On January 31, the inventory

consisted of 500 units that were 70% completed. How many units were in

beginning inventory on January 1?

A. 0

B. 500

C. 3,500

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36. Bosco Corp. uses a process costing system. Beginning inventory for January

consisted of 1,500 units that were 50% completed. During January, 10,000

units were completed. On January 31, the inventory consisted of 750 units that

were 75% completed. How many units were started during January?

A. 8,500

C. 10,000

D. 10,750

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37. How could a firm using the weighted average method of process costing

calculate how many units were started during a period?

A. Add units completed and beginning units in inventory, then subtract ending

units in inventory.

C. Add beginning units in inventory, units completed, and ending units in

inventory.

D. Subtract ending units in inventory from units completed, then add beginning

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38. A firm using process costing needs to reconcile the number of physical units in

order to:

B. determine the number of units that were started during the

period.

C. reconcile beginning Work in Process Inventory with ending Work in Process

Inventory.

D. separate physical units from the equivalent units.

The point of reconciling physical units is to separate completed units, which

are 100% complete, from units in ending work in inventory, which are partially

complete.

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39. An equivalent unit is calculated by:

A. dividing the number of physical units by the percentage of completion.

completion.

C. dividing the number of physical units into direct materials and conversion

costs.

D. subtracting the number of physical units in ending Work in Process

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40. Equivalent units are tracked separately for which two categories of costs?

A. Direct labor and manufacturing

overhead.

cost.

C. Direct materials and indirect materials.

D. Finished goods and cost of goods

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Learning Objective: 03-03 Calculate the number of equivalent units using the

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41. Physical units multiplied by the percentage of completion yields:

A. units completed and transferred out.

B. beginning units in process.

D. ending units in process.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

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Topic: Step 2: Convert physical units into equivalent units

42. For units that are completed and transferred out in a firm that uses the

weighted average method of process costing:

A. the number of units that came from beginning inventory is the same as the

number of units that were started during the period.

number of equivalent units for conversion cost.

C. the number of equivalent units is less than the number of physical units.

D. the number of equivalent units is more than the number of physical units.

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43. For a firm that uses the weighted average method of process costing, which of

the following must be true?

B. Equivalent units must be greater than or equal to physical units.

C. Physical units must be equal to equivalent units.

D. Physical units can be greater than or less than equivalent

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44. Brody Corp. uses a process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,300 units that were 40% completed. 13,000 units were started into the

process during January. On January 31, the inventory consisted of 650 units

that were 70% completed. What would be the equivalent units for conversion

cost using the weighted average method?

A. 13,000

B. 13,585

D. 14,300

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45. Brody Corp. uses a process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,300 units that were 40% completed. 13,000 units were started into the

process during January. On January 31, the inventory consisted of 650 units

that were 70% completed. What would be the equivalent units for direct

materials cost using the weighted average method?

A. 13,000

B. 13,585

C. 14,105

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46. Frost, Inc. is a service firm that uses process costing. The firm worked on a

total of 1,600 cases this month, 800 of which were completed during the

period. The remaining cases were 40% complete. The firm incurred $180,000

in direct labor and manufacturing overhead costs during the period, and had

$4,800 in direct labor and manufacturing costs in beginning inventory. Using

the weighted average method, what was the total number of equivalent units?

A. 800

C. 1,440

D. 1,600

800 cases were complete, leaving 800 (1,600 – 800 = 800) cases still in

process at 40% complete. Equivalent units = (800 × 100%) + (800 × 40%) =

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47. For a firm using the weighted average method of process costing, it would not

be necessary to translate physical units into equivalent units if:

A. the FIFO method were used instead.

B. direct materials were all added at the beginning of the process.

C. direct labor and manufacturing overhead were combined into a single

category called conversion costs.

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Learning Objective: 03-03 Calculate the number of equivalent units using the

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Topic: Step 2: Convert physical units into equivalent units

48. For a firm that uses process costing, calculating equivalent units makes it

possible to fulfill which of the following requirements of GAAP?

B. Assigning an appropriate value to liabilities

C. Expensing period costs as they are incurred

D. Recognizing revenue when it is realized or realizable

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49. Crador Corp. uses a process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,300 units. 13,000 units were started into the process during January. On

January 31, the inventory consisted of 650 units. Equivalent units for

conversion costs were 14,235. What percentage complete was the ending

inventory with respect to conversion costs on January 31?

A. 70%

B. 80%

D. 100%

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50. Gatlin Manufacturing adds direct materials at the beginning of the production

process, while conversion costs are incurred uniformly throughout the process.

At the end of the period, equivalent units for direct materials were 250 more

than equivalent units for conversion costs. 1,000 units were started during the

period, and 1,000 units were also completed. Ending Work in Process

Inventory was 50% complete. How many physical units were in ending Work in

Process Inventory?

A. 250

C. 750

D. 1,000

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51. Computing equivalent units is especially important for:

airplanes.

B. Goods that are started and completed during the same period.

C. Goods that take a relatively short time to produce, such as plastic bottles.

D. Goods with sustainability implications in their production processes.

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52. Under the weighted average method of process costing, which of the following

formulas is used to calculate the cost per equivalent unit?

A. (Ending Inventory + Current Costs)/Physical Units

B. (Beginning Inventory + Current Costs)/Physical Units

C. (Ending Inventory + Current Costs)/Equivalent

Units

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Learning Objective: 03-03 Calculate the number of equivalent units using the

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Topic: Step 3: Calculate cost per equivalent unit

53. Under the weighted average method of process costing, the cost per

equivalent unit is calculated for which of the following categories?

A. Units sold and units in ending Finished Goods Inventory

C. Manufacturing costs and nonmanufacturing costs

D. Completed units and ending units in process

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Learning Objective: 03-03 Calculate the number of equivalent units using the

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Topic: Step 3: Calculate cost per equivalent unit

54. Cost per equivalent unit is kept separate for direct materials and conversion

costs because:

A. the physical units are different for the two categories.

B. the total manufacturing costs are different for the two categories.

D. the ending inventories are different for the two categories.

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55. Which of the following is not used in the calculation of cost per equivalent

unit?

A. Current manufacturing costs

C. Equivalent units

D. Beginning inventory costs

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56. To calculate cost per equivalent unit in process costing, divide total

manufacturing costs by the total number of equivalent units. Under the

weighted average method, what costs are reflected in total manufacturing

costs?

A. Only current period costs

B. Only prior period costs

costs

D. Both current and future period costs

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Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

57. For a process costing firm, one could calculate the cost of beginning inventory

in which of the following ways?

B. Current costs – (equivalent units × cost per equivalent unit)

C. (Current costs × cost per equivalent unit) – equivalent units

D. Equivalent units × (current costs – cost per equivalent unit)

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Calculate cost per equivalent unit

3-42

McGraw-Hill Education.

58. Frost, Inc. is a service firm that uses process costing. The firm worked on a

total of 1,600 cases this month, 800 of which were completed during the

period. The remaining cases were 40% complete. The firm incurred $180,000

in direct labor and manufacturing overhead costs during the period, and had

$4,800 in direct labor and manufacturing costs in beginning inventory. Using

the weighted average method, what was the cost per equivalent unit?

A. $115.50

B. $141.43

C. $145.20

800 cases were complete, leaving 800 (1,600 – 800 = 800) cases still in

process at 40% complete. Equivalent units = (800 × 100%) + (800 × 40%) =

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

3-43

McGraw-Hill Education.

59. Kenney Co. uses process costing to account for the production of canned

energy drinks. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Equivalent

units have been calculated to be 19,200 units for materials and 16,000 units

for conversion costs. Beginning inventory consisted of $11,200 in materials

and $6,400 in conversion costs. April costs were $57,600 for materials and

$64,000 for conversion costs. Ending inventory still in process was 6,400 units

(100% complete for materials, 50% for conversion). The cost per equivalent

unit for conversion costs using the weighted average method would be

A. $4.00

C. $1.10

D. $8.70

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

3-44

McGraw-Hill Education.

60. Kenney Co. uses process costing to account for the production of canned

energy drinks. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Equivalent

units have been calculated to be 19,200 units for materials and 16,000 units

for conversion costs. Beginning inventory consisted of $11,200 in materials

and $6,400 in conversion costs. April costs were $57,600 for materials and

$64,000 for conversion costs. Ending inventory still in process was 6,400 units

(100% complete for materials, 50% for conversion). The cost per equivalent

unit for materials using the weighted average method would be closest to:

A. $0.9167

B. $3.0000

D. $7.2500

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

3-45

McGraw-Hill Education.

61. Kenney Co. uses process costing to account for the production of canned

energy drinks. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Equivalent

units have been calculated to be 19,200 units for materials and 16,000 units

for conversion costs. Beginning inventory consisted of $11,200 in materials

and $6,400 in conversion costs. April costs were $57,600 for materials and

$64,000 for conversion costs. Ending inventory still in process was 6,400 units

(100% complete for materials, 50% for conversion). The total cost per unit

using the weighted average method would be closest to:

B. $6.9091

C. $7.0000

D. $7.2500

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

3-46

McGraw-Hill Education.

62. Livingston Co. uses process costing to account for the production of elastic

bands. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $14,000 in materials and $8,000 in conversion costs.

April costs were $72,000 for materials and $80,000 for conversion costs.

During April 8,000 units were completed. Ending in process inventory was

4,000 units (100% complete for materials, 50% for conversion). The cost per

equivalent unit for conversion costs using the weighted average method would

be:

A. $8.00

C. $2.20

D. $17.40

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-47

McGraw-Hill Education.

63. Livingston Co. uses process costing to account for the production of elastic

bands. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $14,000 in materials and $8,000 in conversion costs.

April costs were $72,000 for materials and $80,000 for conversion costs.

During April 8,000 units were completed. Ending in process inventory was

4,000 units (100% complete for materials, 50% for conversion). The equivalent

cost per unit for materials using the weighted average method would be

closest to:

A. $1.8333

B. $6.0000

D. $14.5000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-48

McGraw-Hill Education.

64. Livingston Co. uses process costing to account for the production of elastic

bands. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $14,000 in materials and $8,000 in conversion costs.

April costs were $72,000 for materials and $80,000 for conversion costs.

During April 8,000 units were completed. Ending in process inventory was

4,000 units (100% complete for materials, 50% for conversion). The total cost

per unit using the weighted average method would be:

B. $13.8382

C. $14.0000

D. $14.5000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-49

McGraw-Hill Education.

65. Macadam Corp. uses the weighted average method of process costing. Its

cost per equivalent unit for direct materials was $5.00 this period, and it had

25,000 equivalent units for direct materials. Beginning inventory costs were

25% of current costs. How much were current costs?

A. $25,000

B. $75,000

D. $125,000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

3-50

McGraw-Hill Education.

66. To reconcile the total cost of Work in Process Inventory, account for:

during the current period.

B. only beginning Work in Process Inventory.

C. only costs that were added during the period.

AICPA: BB Critical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

3-51

McGraw-Hill Education.

67. To determine how much cost should be assigned to ending Work in Process

Inventory:

A. multiply costs per equivalent unit by the number of equivalent units

associated with units completed.

associated with ending Work in Process Inventory.

C. subtract cost of beginning inventory from current period costs.

D. add cost of beginning inventory and current period

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

3-52

McGraw-Hill Education.

68. To determine how much cost should be transferred out of Work in Process

Inventory:

associated with units completed.

B. multiply costs per equivalent unit by the number of equivalent units

associated with ending inventory.

C. subtract cost of beginning inventory from current period costs.

D. add cost of beginning inventory and current period

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

3-53

McGraw-Hill Education.

69. Stangol Co. uses process costing to account for the production of highlighter

pens. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Cost per

equivalent unit has been calculated to be $8.80 for conversion costs and

$7.1667 for materials. 12,000 units were worked on during the period. Ending

inventory still in process was 4,000 units (100% complete for materials, 50%

for conversion). The value of ending inventory using the weighted average

method would be closest to:

A. $31,933.20

C. $63,866.40

D. $130,000.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 4: Reconcile the total cost of work in process inventory

3-54

McGraw-Hill Education.

70. Stangol Co. uses process costing to account for the production of highlighter

pens. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Cost per

equivalent unit has been calculated to be $8.80 for conversion costs and

$7.1667 for materials. 12,000 units were worked on during the period. Ending

inventory still in process was 4,000 units (100% complete for materials, 50%

for conversion). The value of units completed and transferred out using the

weighted average method would be closest to:

B. $130,000.00

C. $152,000.00

D. $159,666.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

3-55

McGraw-Hill Education.

71. How is the ending balance in Work in Process Inventory calculated for a firm

that uses the weighted average method of process costing?

associated with ending Work in Process Inventory.

B. Subtract the cost of goods finished and the cost of goods sold from total

manufacturing costs.

C. Add the costs of the jobs still in process at the end of the period.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 4: Reconcile the total cost of work in process inventory

3-56

McGraw-Hill Education.

72. Togo Co. uses process costing to account for the production of picture frames.

Direct materials are added at the beginning of the process and conversion

costs are incurred uniformly throughout the process. Equivalent units have

been calculated to be 12,000 units for materials and 10,000 units for

conversion costs. Beginning inventory consisted of $14,000 in materials and

$8,000 in conversion costs. April costs were $72,000 for materials and

$80,000 for conversion costs. Ending inventory still in process was 4,000 units

(100% complete for materials, 50% for conversion). The value of ending

inventory using the weighted average method would be closest to:

A. $31,933.60

C. $63,866.80

D. $130,000.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-57

McGraw-Hill Education.

73. Hager Co. uses process costing to account for the production of bottled energy

drinks. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Equivalent

units have been calculated to be 12,000 units for materials and 10,000 units

for conversion costs. Beginning inventory consisted of $7,000 in materials and

$4,000 in conversion costs. April costs were $36,000 for materials and

$40,000 for conversion costs. Ending inventory still in process was 4,000 units

(100% complete for materials, 50% for conversion). The value of units

completed and transferred out using the weighted average method would be

closest to:

B. $65,000.00

C. $76,000.00

D. $79,833.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-58

McGraw-Hill Education.

74. TryFit Co. uses process costing to account for the production of energy food

bars. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $7,000 in materials and $4,000 in conversion costs.

April costs were $36,000 for materials and $40,000 for conversion costs.

During April 8,000 units were completed. Ending in process inventory was

4,000 units (100% complete for materials, 50% for conversion). The value of

ending inventory using the weighted average method would be closest to:

A. $15,966.60

C. $31,933.20

D. $65,000.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-59

McGraw-Hill Education.

75. TryFit Co. uses process costing to account for the production of energy food

bars. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $7,000 in materials and $4,000 in conversion costs.

April costs were $36,000 for materials and $40,000 for conversion costs.

During April 8,000 units were completed. Ending in process inventory was

4,000 units (100% complete for materials, 50% for conversion). The value of

units completed and transferred out using the weighted average method would

be closest to:

B. $65,000.00

C. $76,000.00

D. $79,833.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-60

McGraw-Hill Education.

76. Rathburn, Inc. is a service firm that uses process costing. The firm worked on

a total of 1,000 cases this month, 800 of which were completed during the

period. The remaining cases were 40% complete. The firm incurred $180,000

in direct labor and manufacturing overhead costs during the period, and had

$4,800 in direct labor and manufacturing costs in beginning inventory. Using

the weighted average method, what was the total cost of cases still in process

at the end of the period?

B. $17,520

C. $168,000

D. $175,200

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-61

McGraw-Hill Education.

77. Rathburn, Inc. is a service firm that uses process costing. The firm worked on

a total of 1,000 cases this month, 800 of which were completed during the

period. The remaining cases were 40% complete. The firm incurred $180,000

in direct labor and manufacturing overhead costs during the period, and had

$4,800 in direct labor and manufacturing costs in beginning inventory. Using

the weighted average method, what was the total cost of cases completed

during the period?

A. $16,800

B. $17,520

D. $175,200

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process inventory

3-62

McGraw-Hill Education.

78. Which of the following is not a step in preparing a production report?

A. Reconcile the number of physical units worked on during the

period

B. Translate the physical units into equivalent units

D. Calculate the cost per equivalent unit

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Step 5: Prepare a production report

3-63

McGraw-Hill Education.

79. The manufacturing cost that is transferred from one production process to

another (for example, from production to packaging) is called the:

A. beginning Work in Process Inventory cost.

B. ending Work in Process Inventory cost.

D. accumulated cost of goods.

As a product moves through various departments it accumulates

manufacturing costs. These costs are called “transferred-in costs” because

they are transferred from one department to another as the physical goods

move.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Accounting for subsequent production departments

3-64

McGraw-Hill Education.

80. Under the FIFO method, physical units must be broken down into:

A. units completed and ending units in process

B. units started and completed and ending units in process

C. beginning units in process and units started and completed

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-65

McGraw-Hill Education.

81. Under FIFO, to calculate the number of equivalent units, ask yourself: What

did we do during the ________ period to get beginning inventory from x% to y

% complete and what did we do during the _______ period to get ending

inventory to z% complete?

B. current, prior

C. prior, current

D. prior, prior

AICPA: BB Critical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-66

McGraw-Hill Education.

82. Middle Co. uses process costing to account for the production of chocolate

candy bars. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Cost per

equivalent unit has been calculated to be $4.00 for conversion costs and $3.00

for materials. 3,000 units were in beginning inventory (100% complete for

materials, 80% for conversion). 12,000 units were started and completed

during the period. Ending inventory still in process was 6,000 units (100%

complete for materials, 40% for conversion). The value of ending inventory

using the FIFO method would be:

B. $34,699.80

C. $47,899.80

D. $97,500.00

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-67

McGraw-Hill Education.

83. Nettle Co. uses process costing to account for the production of rubber balls.

Direct materials are added at the beginning of the process and conversion

costs are incurred uniformly throughout the process. Equivalent units have

been calculated to be 12,000 units for materials and 10,000 units for

conversion costs. Beginning inventory consisted of $14,000 in materials and

$8,000 in conversion costs. April costs were $72,000 for materials and

$80,000 for conversion costs. Ending inventory still in process was 4,000 units

(100% complete for materials, 50% for conversion). The cost per unit for

conversion costs using the FIFO method would be:

B. $8.80

C. $2.20

D. $17.40

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 1 Easy

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-68

McGraw-Hill Education.

84. Nettle Co. uses process costing to account for the production of rubber balls.

Direct materials are added at the beginning of the process and conversion

costs are incurred uniformly throughout the process. Equivalent units have

been calculated to be 12,000 units for materials and 10,000 units for

conversion costs. Beginning inventory consisted of $14,000 in materials and

$8,000 in conversion costs. April costs were $72,000 for materials and

$80,000 for conversion costs. Ending inventory still in process was 4,000 units

(100% complete for materials, 50% for conversion). The cost per unit for

materials using the FIFO method would be closest to:

A. $1.8334

C. $7.1666

D. $14.5000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 1 Easy

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-69

McGraw-Hill Education.

85. Nettle Co. uses process costing to account for the production of rubber balls.

Direct materials are added at the beginning of the process and conversion

costs are incurred uniformly throughout the process. Equivalent units have

been calculated to be 12,000 units for materials and 10,000 units for

conversion costs. Beginning inventory consisted of $14,000 in materials and

$8,000 in conversion costs. April costs were $72,000 for materials and

$80,000 for conversion costs. Ending inventory still in process was 4,000 units

(100% complete for materials, 50% for conversion). The total cost per unit

using the FIFO method would be closest to:

A. $15.9666

B. $13.8182

D. $14.5000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 1 Easy

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-70

McGraw-Hill Education.

86. South Corp. uses a FIFO process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,000 units that were 40% completed. 10,000 units were started into the

process during January. On January 31, the inventory consisted of 500 units

that were 70% completed. How many units were started and completed during

the period?

B. 10,500

C. 11,000

D. 11,500

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-71

McGraw-Hill Education.

87. Tripper Corp. uses a FIFO process costing system. Beginning inventory for

January consisted of 1,000 units that were 60% completed. 10,000 units were

started into the process during January. During January, 9,500 units were

started and completed. How many units were in ending inventory on January

31?

A. 1,500

B. 1,000

D. 100

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-72

McGraw-Hill Education.

88. Harlow Corp. uses a FIFO process costing system. Beginning inventory for

January consisted of 1,000 units that were 60% completed. During January,

9,500 units were started and completed. On January 31, the inventory

consisted of 500 units that were 70% completed. How many units were started

during January?

A. 9,850

C. 10,250

D. 11,000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-73

McGraw-Hill Education.

89. Sanger Corp. uses a process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,000 units that were 40% completed. 10,000 units were started into the

process during January. On January 31, the inventory consisted of 500 units

that were 70% completed. What would be the equivalent units for conversion

cost using the FIFO method?

A. 10,000

C. 10,850

D. 11,000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-74

McGraw-Hill Education.

90. Sanger Corp. uses a process costing system in which direct materials are

added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,000 units that were 40% completed. 10,000 units were started into the

process during January. On January 31, the inventory consisted of 500 units

that were 70% completed. What would be the equivalent units for direct

materials cost using the FIFO method?

B. 10,450

C. 10,850

D. 11,000

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-75

McGraw-Hill Education.

91. Caston Corp. uses a FIFO process costing system in which direct materials

are added at the beginning of the process and conversion costs are incurred

uniformly throughout the process. Beginning inventory for January consisted of

1,000 units that were 40% completed with respect to conversion costs. 10,000

units were started into the process during January. On January 31, the

inventory consisted of 500 units. Equivalent units for conversion costs were

10,450. What percentage complete was the ending inventory on January 31

with respect to conversion costs?

B. 80%

C. 90%

D. 100%

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-76

McGraw-Hill Education.

92. Heathcoat Co. uses process costing to account for the production of canned

vegetables. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $7,000 in materials and $4,000 in conversion costs.

April costs were $36,000 for materials and $40,000 for conversion costs. On

April 1, there were 2,000 units in beginning inventory (80% complete). During

April 10,000 units were completed. Ending in process inventory was 4,000

units (100% complete for materials, 40% for conversion). The cost per

equivalent unit for conversion costs using the FIFO method would be:

B. $4.40

C. $1.10

D. $8.70

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-77

McGraw-Hill Education.

93. Heathcoat Co. uses process costing to account for the production of canned

vegetables. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $7,000 in materials and $4,000 in conversion costs.

April costs were $36,000 for materials and $40,000 for conversion costs. On

April 1, there were 2,000 units in beginning inventory (80% complete). During

April 10,000 units were completed. Ending in process inventory was 4,000

units (100% complete for materials, 40% for conversion). The cost per

equivalent unit for materials using the FIFO method would be closest to:

A. $0.9167

C. $3.5833

D. $7.2500

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-78

McGraw-Hill Education.

94. Heathcoat Co. uses process costing to account for the production of canned

vegetables. Direct materials are added at the beginning of the process and

conversion costs are incurred uniformly throughout the process. Beginning

inventory consisted of $7,000 in materials and $4,000 in conversion costs.

April costs were $36,000 for materials and $40,000 for conversion costs. On

April 1, there were 2,000 units in beginning inventory (80% complete). During

April 10,000 units were completed. Ending in process inventory was 4,000

units (100% complete for materials, 40% for conversion). The total cost per

unit using the FIFO method would be closest to:

A. $7.9833

B. $6.9091

D. $7.2500

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

3-79

McGraw-Hill Education.

95. The journal entry to record the issuance of direct materials into production

includes:

A. a debit to Raw Materials Inventory.

B. a debit to Finished Goods Inventory.

D. a debit to Cash.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

96. The journal entry to record the purchase of direct materials includes:

B. a debit to Finished Goods Inventory.

C. a debit to Work in Process Inventory.

D. a debit to Cash.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

3-80

McGraw-Hill Education.

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

97. The journal entry to record the actual (not applied) overhead costs incurred

includes:

B. a debit to Work in Process Inventory.

C. a debit to Finished Goods Inventory.

D. a debit to Cost of Goods Sold.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

3-81

McGraw-Hill Education.

98. The journal entry to record the application of overhead costs to production

includes:

A. a debit to Manufacturing Overhead.

C. a debit to Finished Goods Inventory.

D. a debit to Cost of Goods Sold.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

99. The journal entry to record the completion of goods includes:

A. a debit to Conversion Costs.

B. a debit to Work in Process Inventory.

D. a debit to Cost of Goods Sold.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

3-82

McGraw-Hill Education.

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

100. The journal entry to record the issuance of direct material into production

includes:

B. a credit to Finished Goods Inventory.

C. a credit to Work in Process Inventory.

D. a credit to Cash.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

3-83

McGraw-Hill Education.

101. The journal entry to record the purchase of direct materials for cash includes:

A. a credit to Raw Materials Inventory.

B. a credit to Finished Goods Inventory.

C. a credit to Work in Process Inventory.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

102. The journal entry to record the sale of goods includes:

A. a credit to Conversion Costs.

B. a credit to Work in Process Inventory.

D. a credit to Cost of Goods Sold.

When goods are sold, the cost is debited to Cost of Goods Sold and credited

to Finished Goods Inventory. (The receipt of revenue is recorded as well,

generally with a debit to cash or accounts receivable and a credit to revenue.)

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

3-84

McGraw-Hill Education.

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

103. The journal entry to record the application of overhead costs to production

includes:

B. a credit to Work in Process Inventory.

C. a credit to Finished Goods Inventory.

D. a credit to Cost of Goods Sold.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

3-85

McGraw-Hill Education.

104. The journal entry to record the completion of goods includes:

A. a credit to Conversion Costs.

C. a credit to Finished Goods Inventory.

D. a credit to Cost of Goods Sold.

AICPA: FN Measurement

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-S2 Prepare journal entries to record the flow of

manufacturing costs in a process cost system.

Topic: Supplement 3B journal entries for process costing

105. The production report includes information about the number of physical units,

plus _____________ equivalent units.

A. the number, but not the cost of

B. the cost, but not the number of

D. neither the number nor cost of

AICPA: BB Critical Thinking

Accessibility: Keyboard Navigation

Blooms: Remember

3-86

McGraw-Hill Education.

Difficulty: 1 Easy

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Step 5: Prepare a production report

106. At its highest level, the production report provides what?

accounting period

B. Information about the direct and indirect materials that were part of the

production process

C. A reconciliation of the budget to GAAP reporting

D. Information about the physical units contained in the production process of

AICPA: BB Critical Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Step 5: Prepare a production report

Essay Questions

3-87

McGraw-Hill Education.

107. Complete the following chart by reconciling the number of physical units for

each department.

Beginni

Units in

Process

Units

Start

Units

Complet

Endin

Units

Proce

Dep

t. A 3,000 a. 15,000 2,000

Dep

t. B 4,000 12,00

011,000 b.

Dep

t. C c. 18,00

016,000 6,000

Dep

t. D 5,000 d. 16,000 4,000

Dep

t. E 2,000 9,000 e. 3,000

Dep

t. F 4,000 17,00

0f. 10,000

AICPA: FN Measurement

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Topic: Reconcile the number of physical units

3-89

McGraw-Hill Education.

3-90

McGraw-Hill Education.

108. Complete the following chart by reconciling the number of physical units. The

months listed are sequential, and for the same department.

Beginn

ing

Units

Invent

ory

Unit

Start

Units

Comple

ted

Endin

Units

Invent

ory

Janua

ry 3,000 a. 15,000 2,000

Febru

ary b. 12,0

00 11,000 c.

March d. 18,0

00 e. f.

April 5,000 g. 16,000 4,000

May h. i. 9,000 3,000

June j. 17,0

00 10,000 k.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Topic: Reconcile the number of physical units

3-92

McGraw-Hill Education.

3-93

McGraw-Hill Education.

109. Hamilton, Inc. manufactures units in two processes: Production and Finishing.

All direct materials are added at the beginning of the Production process, while

conversion costs are incurred evenly throughout the period for both Production

and Finishing. Hamilton employs three inspectors: Kelsey, Chad, and Lexi.

Kelsey inspects direct materials before they are added to Production (two

pieces of direct materials per unit). Chad inspects units when the Production

process is finished, after which they are immediately transferred to Finishing.

Lexi inspects units at the end of the Finishing process. During the current

period, none of the materials or units failed inspection. At the beginning of the

period, 5,000 units had only “Inspected by Kelsey” tags on them (these units

were 70% complete), and 2,000 units had “Inspected by Kelsey” and

“Inspected by Chad” tags on them (these units were 60% complete). At the

end of the period, 7,000 units had only “Inspected by Kelsey” tags on them

(these units were 50% complete). 1,000 units had only “Inspected by Kelsey”

and “Inspected by Chad” tags on them (these units were 90% complete), and

19,000 units had tags from all three inspectors on them (these units were

100% complete).

Required:

Determine the number of physical units:

a. in beginning Work in Process in Production during the period.

b. started in Production during the period.

c. transferred from Production to Finishing during the period.

d. in ending Work in Process in Production during the period.

e. in beginning Work in Process in Finishing during the period.

f. in ending Work in Process in Finishing during the period.

g. completed in Finishing during the period.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Accounting for subsequent production departments

Topic: Reconcile the number of physical units

110. Kramer Corp. began the period with 5,200 units in process that were 100%

complete for materials and 60% complete for conversion, and ended the

period with 26,000 units completed and 6,500 units still in process. Work in

process was 100% complete for materials and 70% complete for conversion

costs.

Required:

Using the weighted average method, compute the equivalent units of

production for materials and conversion for the period.

111. Trout, Inc. prepared the following production report:

Trout, Inc.

Process Costing Production Report

(Weighted Average Method)

UNITS Step

Units to

accoun

ted for:

Physi

cal

Units

Beginn

ing

Work in

Proces

3,000

Starte

d into

Product

ion

Total

units

7,0

00 Step 2

Equivalent Units

Units

accoun

ted for

follows:

Materi

als

Conver

sion

Compl

eted

and

transfer

red

2,000 2,000 b.

Ending

Work in

Proces

5,00

0 c.

Total

units

7,00

0 5,500

COSTS Step 3: Cost per

Equivalent Unit

Materi

als

Conver

sion

Total

Cost

3-97

McGraw-Hill Education.

Cost of

beginni

invento

$18,0

00 $14,000 $32,0

Curren

t period

costs

122,0

206,00

$328,

000

Total

cost of

units in

proces

$140,

000

$220,00

$360,

000

Equival

ent

units

7,000 5,500

Cost

per

equival

ent unit

d. $40.00 e.

Step 4: Reconcile

Work in Process

Cost to

accoun

ted for:

Materi

als

Conver

sion

Total

Cost

Beginn

ing

Work in

Proces

$18,0

00 $14,000 $32,0

Curren

t period

costs

122,

000

206,00

328,

000

Total

costs $140,

000

$220,0

$360,

000

Cost

accoun

ted for

follows:

Units

comple

f. $80,000 g.

3-98

McGraw-Hill Education.

ted and

transfer

red

Ending

invento

h. 140,0

00 i.

$140,

000

$220,0

$360,

000

Additional information: Trout adds direct materials at the beginning of the

process, while conversion costs are incurred uniformly throughout the process.

At the beginning of the period, Work in Process Inventory was 40% complete.

At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Learning Objective: 03-04 Prepare a process costing production report using the

3-99

McGraw-Hill Education.

weighted-average method.

Topic: Step 5: Prepare a production report

3-100

McGraw-Hill Education.

3-101

McGraw-Hill Education.

112. Trout, Inc. prepared the following production report:

Trout, Inc.

Process Costing Production Report

(Weighted Average Method)

UNITS Step

Units

to be

accoun

ted for:

Phys

ical

Units

Begin

ning

Work

Proces

3,000

Starte

d into

Produc

tion

Total

units

7,0

00 Step 2

Equivalent Units

Units

accoun

ted for

follows:

Materi

als

Conver

sion

Compl

eted

and

transfe

rred

2,000 b. c.

Endin

g Work

Proces

. f.

Total

units

7,00

. h.

COST

S Step 3: Cost per

Equivalent Unit

3-102

McGraw-Hill Education.

Materi

als

Conver

sion

Total

Cost

beginni

invento

$18,00

0$14,000 $32,00

Curren

t period

costs

122,0

206,0

$328

,000

Total

cost of

units in

proces

$140,0

$220,00

$360,0

Equival

ent

units

Cost

per

equival

ent unit

j. k.

Step 4: Reconcile

Work in Process

Cost to

accoun

ted for:

Materi

als

Conver

sion

Total

Cost

Begin

ning

Work

Proces

$18,00

0$14,000 $32,00

Curren

t period

costs

122,

000

206,00

328,

000

Total

costs $140,

000

$220,0

$360,

000

Cost

accoun

ted for

3-103

McGraw-Hill Education.

follows:

Units

comple

ted and

transfe

rred

l. m. n.

Endin

invento

$140,

000

$220,0

$360,

000

Additional information: Trout adds direct materials at the beginning of the

process, while conversion costs are incurred uniformly throughout the process.

At the beginning of the period, Work in Process Inventory was 40% complete.

At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Step 5: Prepare a production report

3-105

McGraw-Hill Education.

3-106

McGraw-Hill Education.

113. Trout, Inc. prepared the following production report:

Trout, Inc.

Process Costing Production Report

(Weighted Average Method)

UNITS Step

Units to

account

ed for:

Physi

cal

Units

Beginn

ing

Work in

Process

3,000

Started

into

Product

ion

Total

units

7,00

0Step 2

Equivalent Units

Units

account

ed for

follows:

Materi

als

Conver

sion

Compl

eted

and

transfer

red

2,000 b. c.

Ending

Work in

Process

. f.

Total

units g

. h.

COSTS Step 3: Cost per

Equivalent Unit

Materi

als

Conver

sion

Total

Cost

Cost of $18,00 $14,000

3-107

McGraw-Hill Education.

beginni

inventor

Curren

t period

costs

122,0

206,0

Total

cost of

units in

process

Equival

ent

units

Cost

per

equival

ent unit

j. k.

Step 4: Reconcile

Work in Process

Cost to

account

ed for:

Materi

als

Conver

sion

Total

Cost

Beginn

ing

Work in

Process

$18,00

0$14,000

Curren

t period

costs

122,0

00 206,000

Total

costs

Cost

account

ed for

follows:

Units

complet

ed and

transfer

red

l. m. n.

3-108

McGraw-Hill Education.

Ending

inventor

o. p.

Additional information: Trout adds direct materials at the beginning of the

process, while conversion costs are incurred uniformly throughout the process.

At the beginning of the period, Work in Process Inventory was 40% complete.

At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

3-109

McGraw-Hill Education.

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

Topic: Step 5: Prepare a production report

114. Each of the following statements describes preparing a production report using

either the FIFO Method or the Weighted Average Method. List the letters that

correspond to the statements that accurately describe the FIFO Method.

a. Separates units in beginning inventory from those that were started during

the current period.

b. Combines the cost of beginning inventory with the costs that were incurred

during the period.

c. Averages the cost of units in beginning inventory with the costs of units that

were started during the period.

d. Assumes the units in beginning inventory were completed before any new

units were started.

e. Combines the units in beginning inventory with the units that were started

during the period.

f. Is the simpler method and more frequently used in practice.

g. May be a less accurate method, particularly for companies that hold

significant inventory.

h. More closely matches the actual flow of costs in many industries.

AICPA: BB Critical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Prepare a process costing production report using the

weighted-average method.

3-110

McGraw-Hill Education.

Learning Objective: 03-S1 Prepare a process costing production report using the

first-in, first-out (FIFO) method.

Topic: Supplement 3A FIFO method

115. Swan Corp. began work on 4,200 units this period. Work in Process Inventory

was 700 at the beginning of the period (60% complete) and 1,400 at the end of

the period (50% complete). Swan uses the weighted average method of

process costing. Direct materials are added at the beginning of the process,

and conversion costs are incurred evenly throughout the period.

Required:

Using the weighted average method:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 2 Medium

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

3-111

McGraw-Hill Education.

3-112

McGraw-Hill Education.

116. Hamilton, Inc. manufactures units in two processes: Production and Finishing.

All direct materials are added at the beginning of the Production process, while

conversion costs are incurred evenly throughout the period for both Production

and Finishing. Hamilton employs three inspectors: Kasey, Chad, and Lexi.

Kasey inspects direct materials before they are added to Production (two

pieces of direct materials per unit). Chad inspects units when the Production

process is finished, after which they are immediately transferred to Finishing.

Lexi inspects units at the end of the Finishing process. This period, none of the

materials or units failed inspection. At the beginning of the period, 5,000 units

had only “Inspected by Kasey” tags on them (these units were 70% complete),

and 2,000 units had “Inspected by Kasey” and “Inspected by Chad” tags on

them (these units were 60% complete). At the end of the period, 7,000 units

had only “Inspected by Kasey” tags on them (these units were 50% complete).

1,000 units had only “Inspected by Kasey” and “Inspected by Chad” tags on

them (these units were 90% complete), and 19,000 units had tags from all

three inspectors on them (these units were 100% complete).

Required:

Determine the number of physical units using the weighted average method:

a. in beginning Work in Process in Production during the period.

b. started in Production during the period.

c. transferred from Production to Finishing during the period.

d. in ending Work in Process in Production during the period.

e. in beginning Work in Process in Finishing during the period.

f. in ending Work in Process in Finishing during the period.

g. completed in Finishing during the period.

Determine the number of equivalent units

h. for direct materials for Production

i. for conversion for Production

j. for direct materials for Finishing

k. for conversion for Finishing

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Accounting for subsequent production departments

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

3-114

McGraw-Hill Education.

117. Kramer Corp. began the current period with 4,000 units in process that were

100% complete as to materials and 60% complete as to conversion. Costs of

$7,500 in direct materials and $4,700 in conversion costs were incurred in

manufacturing those units in the previous period. Kramer ended the current

period with 20,000 units completed and 5,000 units still in process. Work in

process was 100% complete as to materials and 70% complete as to

conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in

direct labor costs, and $40,000 in manufacturing overhead costs during the

period.

Required:

Using the weighted average method, compute the following:

a. Equivalent units of production for materials.

b. Equivalent units of production for conversion.

c. Cost per equivalent unit for materials.

d. Cost per equivalent unit for conversion.

e. Cost assigned to ending Work in Process Inventory

f. Cost assigned to goods completed and transferred out

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-115

McGraw-Hill Education.

Topic: Step 4: Reconcile the total cost of work in process inventory

118. Kramer Corp. began the current period with 4,000 units in process that were

100% complete as to materials and 60% complete as to conversion. Costs of

$7,500 in direct materials and $4,700 in conversion costs were incurred in

manufacturing those units in the previous period. Kramer ended the current

period with 20,000 units completed and 5,000 units still in process. Work in

process was 100% complete as to materials and 70% complete as to

conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in

direct labor costs, and $40,000 in manufacturing overhead costs during the

period.

Required:

Using the weighted average method, compute the following:

a. Equivalent units of production for materials.

b. Equivalent units of production for conversion.

c. Cost per equivalent unit for materials.

d. Cost per equivalent unit for conversion.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-116

McGraw-Hill Education.

119. For Salcido, Inc., the value of beginning Work in Process Inventory was

$100,000, 25% of which was direct materials cost. During the period, Salcido

completed work on 42,500 units, only completed 80% of the work on another

10,000 units, and incurred $80,000 in direct materials cost and $177,500 in

conversion costs. Salcido adds direct materials at the beginning of their

production process, and incurs conversion costs evenly throughout the

process.

Required:

Calculate the following using the weighted average method for process

costing.

a. Equivalent units for direct materials

b. Equivalent units for conversion costs

c. Cost per equivalent unit for direct materials

d. Cost per equivalent unit for conversion costs

e. Cost assigned to ending Work in Process Inventory

f. Cost assigned to goods completed and transferred out

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process

3-117

McGraw-Hill Education.

120. Swan Corp. began work on 3,000 units this period. Work in Process Inventory

was 500 at the beginning of the period (60% complete) and 1,000 at the end of

the period (50% complete). Beginning inventory costs were $3,000 for

conversion costs and $7,000 for direct materials. During the period, Swan

incurred $75,000 for conversion costs and $52,500 for direct materials. Swan

uses the weighted average method of process costing. Direct materials are

added at the beginning of the process, and conversion costs are incurred

evenly throughout the period.

Required:

Using the weighted average method:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

d. Calculate the cost per equivalent unit for direct materials.

e. Determine the cost per equivalent unit for conversion costs.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

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McGraw-Hill Education.

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

3-119

McGraw-Hill Education.

121. Swan Corp. began work on 3,000 units this period. Work in Process Inventory

was 500 at the beginning of the period (60% complete) and 1,000 at the end of

the period (50% complete). Beginning inventory costs were $3,000 for

conversion costs and $7,000 for direct materials. During the period, Swan

incurred $75,000 for conversion costs and $52,500 for direct materials. Swan

uses the weighted average method of process costing. Direct materials are

added at the beginning of the process, and conversion costs are incurred

evenly throughout the period.

Required:

Using the weighted average method, compute:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

d. Calculate the cost per equivalent unit for direct materials.

e. Determine the cost per equivalent unit for conversion costs.

f. Determine the cost assigned to ending Work in Process Inventory.

g. Determine the cost assigned to goods completed and transferred out.

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

3-120

McGraw-Hill Education.

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process

3-121

McGraw-Hill Education.

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McGraw-Hill Education.

122. Sierra Co. has provided the following information:

Work in Process: Feb

125,000 units

(100% complete for

materials, 60%

complete for

conversion)

Materials $35,000

Conversion $43,000

Units started 80,000 units

February costs

Materials $120,000

Conversion $234,000

Work in Process: Feb

28 15,000 units

(100% complete for

materials, 20%

complete for

conversion)

Using the weighted average method of process costing, complete each of the

following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal

places.

d. What is the dollar amount transferred to Finished Goods? Round your

answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a

whole dollar amount.

15,00

goods

4.4547

e. Materials

15,000

1.4762

= $22,143

Conversion 3,000 ×

2.9785 = $8,936

Total ending

WIP $31,079

Feedback: Beginning units in process + units started = units completed +

ending units in process. Equivalent units = physical units × percentage of

completion. Cost per equivalent unit = total manufacturing cost/equivalent

units. Costs are assigned by multiplying the appropriate equivalent units by

cost per equivalent unit.

AACSB: Analytical Thinking

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process

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McGraw-Hill Education.

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McGraw-Hill Education.

123. Vista Co. has provided the following information:

Work in Process:

March 1 14,000 units

(100% complete for

materials, 70%

complete for

conversion)

Materials $44,700

Conversion $23,000

Units started 60,000 units

February costs

Materials $190,740

Conversion $144,000

Work in Process:

March 31 11,000 units

(80% complete for

materials, 40%

complete for

conversion)

Using the weighted average method of process costing, complete each of the

following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal

places.

d. What is the dollar amount transferred to Finished Goods? Round your

answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a

whole dollar amount.

Goods

5.7569

e. Materials 8,800 ×

3.2791 = $28,856

Conversion 4,400 ×

2.4778 = $10,902

Total ending

WIP $39,758

Feedback: Beginning units in process + units started = units completed +

ending units in process. Equivalent units = physical units × percentage of

completion. Cost per equivalent unit = total manufacturing cost/equivalent

units. Costs are assigned by multiplying the appropriate equivalent units by

cost per equivalent unit.

AACSB: Analytical Thinking

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process

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McGraw-Hill Education.

124. Ridgeway Co. has provided the following information:

Work in Process: April

14,000 units

(100% complete for

materials, 90%

complete for

conversion)

Materials $16,700

Conversion $17,000

Units started 81,000 units

February costs

Materials $349,650

Conversion $375,375

Work in Process: April

30 11,000 units

(70% complete for

materials, 10%

complete for

conversion)

Using the weighted average method of process costing, complete each of the

following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal

places.

d. What is the dollar amount transferred to Finished Goods? Round your

answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a

whole dollar amount.

Goods

9.7088

e. Materials 7,700 ×

4.4841 = $34,528

Conversion 1,100 ×

5.2247 = $5,747

Total ending

WIP $40,275

Feedback: Beginning units in process + units started = units completed +

ending units in process. Equivalent units = physical units × percentage of

completion. Cost per equivalent unit = total manufacturing cost/equivalent

units. Costs are assigned by multiplying the appropriate equivalent units by

cost per equivalent unit.

AACSB: Analytical Thinking

AICPA: FN Measurement

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 03-02 Reconcile the number of physical units using the

weighted-average method.

Learning Objective: 03-03 Calculate the number of equivalent units using the

weighted-average method.

Topic: Step 1: Reconcile the number of physical units

Topic: Step 2: Convert physical units into equivalent units

Topic: Step 3: Calculate cost per equivalent unit

Topic: Step 4: Reconcile the total cost of work in process

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125. Hamilton, Inc. manufactures units in two processes: Production and Finishing.