4) What is the total equivalent units in ending inventory for assignment of direct materials cost?
A) 25 units
B) 50 units
C) 150 units
D) 200 units
5) In the computation of the cost per equivalent unit, the weighted-average method of process costing
considers all the costs ________.
A) entering work in process from the units in beginning inventory plus the costs for the work completed
during the current accounting period
B) costs that have entered work in process from the units started or transferred in during the current
accounting period
C) that have entered work in process during the current accounting period from the units started or
transferred in minus the costs associated with ending inventory
D) that have entered work in process during the current accounting period from the units started or
transferred in plus the costs associated with ending inventory
6) If there was no beginning work in process and no ending work in process under the weighted-average
process costing method, the number of equivalent units for direct materials, if direct materials were
added at the start of the process, would be ________.
A) more than the units started or transferred in during the period
B) equal to the units completed during the period
C) less than the units completed during the period
D) equal to total of units started and units completed during the period
7) Under the weighted-average method, the stage of completion of beginning work in process ________.
A) is relevant in determining the equivalent units
B) must be combined with the work done during the current period to determine the equivalent units
C) is irrelevant in determining the equivalent-unit calculation
D) can almost always be determined with a high degree of precision
Answer the following questions using the information below:
Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two
cost categories, direct materials and conversion costs. Each product must pass through the Assembly
Department and the Testing Department. Direct materials are added at the beginning of the production
process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-
average costing.
Data for the Assembly Department for June 2015 are:
Work in process, beginning inventory 300 units
Direct materials (100% complete)
Conversion costs (50% complete)
Units started during June 950 units
Work in process, ending inventory: 150 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs for June 2015:
Work in process, beginning inventory:
Direct materials $90,000
Conversion costs $135,000
Direct materials costs added during June $600,000
Conversion costs added during June $400,000
8) What are the equivalent units for direct materials and conversion costs, respectively, for June?
A) 1,250 units; 1,210.64 units
B) 1,250 units; 1,212.5 units
C) 1,100 units; 1,100 units
D) 1012 units; 1040 units
9) What is the total amount debited to the Work-in-Process account during the month of June?
A) $225,000
B) $1,000,000
C) $1,135,000
D) $1,225,000
10) What is the direct materials cost per equivalent unit during June?
A) $569
B) $560
C) $552
D) $480
11) What is the conversion cost per equivalent unit in June?
A) $552.00
B) $541.24
C) $441.24
D) $428.00
12) What amount of direct materials costs is assigned to the ending Work-in-Process account for June?
A) $82,800
B) $62,100
C) $37,240
D) $30,454
13) What amount of conversion costs is assigned to the ending Work-in-Process account for June?
A) $82,800.50
B) $49,639.50
C) $66,186.50
D) $38,256.50
Answer the following questions using the information below:
Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct
materials and conversion costs. Each product must pass through the Assembly Department, the
Programming department, and the Testing Department. Direct materials are added at the beginning of
the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics
uses weighted-average costing.
The following information is available for the month of March 2015 for the Assembly department.
Work in process, beginning inventory 300 units
Conversion costs (30% complete)
Units started during April 800 units
Work in process, ending inventory: 100 units
Conversion costs (50% complete)
The cost details for the month of March are as follows:
Work in process, beginning inventory:
Direct materials $345,000
Conversion costs $360,000
Direct materials costs added during April $700,000
Conversion costs added during April $1,120,000
14) What are the equivalent units for direct materials and conversion costs, respectively, for March?
A) 1,100 units; 1,100 units
B) 1,050 units; 1,100 units
C) 1,100 units; 1,050 units
D) 1000 units; 1050 units
15) What is the total amount debited to the Work-in-Process account during the month of March?
A) $2,525,000
B) $2,180,000
C) $1,820,000
D) $700,000
16) What is the direct materials cost per equivalent unit during March?
A) $995
B) $950
C) $636
D) $313
17) What is the conversion cost per equivalent unit in March?
A) $1,595.52
B) $1,409.52
C) $1,345.52
D) $1,066.52
18) What amount of direct materials costs is assigned to the ending Work-in-Process account for March?
A) $31,363
B) $63,636
C) $75,075
D) $95,000
19) What amount of conversion costs is assigned to the ending Work-in-Process account for April?
A) $140,952
B) $95,000
C) $70,476
D) $247,500
Answer the following questions using the information below:
The Swivel Chair Company manufacturers a standard recliner. During February, the firm’s Assembly
Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs
and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in
ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-
average costing is used by Swivel.
20) How many chairs were in inventory at the beginning of the month? Conversion costs are incurred
uniformly over the production cycle.
A) 8,000 chairs
B) 18,000 chairs
C) 38,000 chairs
D) 48,000 chairs
21) What were the equivalent units for materials for February?
A) 193,000 chairs
B) 173,000 chairs
C) 163,000 chairs
D) 153,000 chairs
22) What were the equivalent units for conversion costs for February if the beginning inventory was 70%
complete as to conversion costs and the ending inventory was 40% complete as to conversion costs?
A) 182,200
B) 152,200
C) 172,200
D) 162,200
23) Of the 145,000 units Swivel started during February, how many were finished during the month?
A) 177,000
B) 197,000
C) 127,000
D) 217,000
24) Weighty Steel processes a single type of steel. For the current period the following information is
given:
Units
Material Costs
Conversion Costs
Beginning Inventory
3,000
$4,500
$5,400
Started During the Current Period
20,000
32,000
78,200
Ending Inventory
2,500
All materials are added at the beginning of the production process. The beginning inventory was 40%
complete as to conversion, while the ending inventory was 30% completed for conversion purposes.
Weighty uses the weighted-average costing method.
What is the total cost assigned to the units completed and transferred this period?
A) $107,010
B) $109,440
C) $113,160
D) $120,100
25) A distinct feature of the FIFO process-costing method is that the ________.
A) work done on beginning inventory before the current period is blended with the work done during
the current period in the calculation of equivalent units
B) work done on beginning inventory before the current period is kept separate from the work done
during the current period in the calculation of equivalent units
C) work done on ending inventory is kept separate from the work done during the current period in the
calculation of equivalent units and is usually not included in the calculation
D) FIFO process-costing method is only minimally different from the weighted-average process-costing
method
26) On occasion, the FIFO and the weighted-average methods of process costing will result in the same
dollar amount of costs being transferred to the next department. Which of the following scenarios would
have that result?
A) when the beginning and ending inventories are equal in terms of unit numbers
B) when the beginning and ending inventories are equal in terms of the percentage of completion for both
direct materials, and conversion costs
C) when there is no ending inventory
D) when there is no beginning inventory
27) An assumption of the FIFO process-costing method is that ________.
A) the units in beginning inventory are not necessarily assumed to be completed by the end of the period
B) the units in beginning inventory are assumed to be completed first
C) ending inventory will always be completed in the next accounting period
D) no calculation of conversion costs is possible
Answer the following questions using the information below:
Comfort chair company manufacturers a standard recliner. During February, the firm’s Assembly
Department started production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and
transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending
inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the
beginning of the production cycle and conversion costs are added uniformly throughout the production
process. The FIFO method of process costing is used by Comfort. Beginning work in process was 30%
complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.
Beginning inventory:
Direct materials $24,000
Conversion costs $35,000
Manufacturing costs added during the accounting period:
Direct materials $168,000
Conversion costs $278,000
28) How many of the units that were started and completed during February?
A) 83,000
B) 78,000
C) 73,000
D) 63,000
29) What were the equivalent units for conversion costs during February?
A) 81,500
B) 83,000
C) 73,000
D) 77,500
30) What is the amount of direct materials cost assigned to ending work-in-process inventory at the end
of February?
A) $19,000
B) $23,000
C) $25,000
D) $27,000
31) What is the cost of the goods transferred out during February?
A) $417,750.5
B) $454,694.8
C) $476,750.6
D) $505,000 .2
Answer the following questions using the information below:
Jane Industries manufactures plastic toys. During October, Jane’s Fabrication Department started work on
10,000 models. During the month, the company completed 11,000 models, and transferred them to the
Distribution Department. The company ended the month with 1,500 models in ending inventory. There
were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the
production cycle and conversion costs are added uniformly throughout the production process. The FIFO
method of process costing is being followed. Beginning work in process was 25% complete as to
conversion costs, while ending work in process was 50% complete as to conversion costs.
Beginning inventory:
Direct materials costs $19,200
Conversion costs $10,800
Manufacturing costs added during the accounting period:
Direct materials costs $70,000
Conversion costs $240,000
32) How many of the units that were started and completed during October?
A) 13,500
B) 8,500
C) 9,000
D) 10,000
33) What were the equivalent units for conversion costs during October?
A) 10,125
B) 11,375
C) 11,125
D) 9,000
34) What is the amount of direct materials cost assigned to ending work-in-process inventory at the end
of October?
A) $22,727
B) $17,202
C) $7,720
D) $10,500
35) What is the cost assigned to ending inventory during October?
A) $26,678
B) $31,536
C) $36,000
D) $38,000
36) Which of the following is true of weighted-average process-costing?
A) It does not represent the average cost of units when inputs prices fluctuates markedly from month to
month.
B) It facilitates period-to-period comparisons and hence is very useful in analyzing the performances of
managers for different periods.
C) It arrives at the same unit costs as arrived under FIFO method, but the computations are easier under
weighted-average process-costing.
D) It calculates the cost per equivalent unit of all work done to date, regardless of the accounting period
in which it was done.
37) Which of the following is an assumption under FIFO process-costing method?
A) It assumes some of the higher-cost units are placed in ending work in process.
B) It assumes that all the lower-cost units from the previous period in beginning work in process are the
first to be completed and transferred out of the process.
C) It assumes that unit inputs costs are constant and do not fluctuate in the short run.
D) It assumes that the ending work in process consists of only the lower-cost current-period units.
38) A major advantage of using the FIFO process-costing method is that ________.
A) FIFO makes the unit cost calculations simpler
B) in contrast with the weighted-average method, FIFO is considered GAAP
C) FIFO provides managers with information about changes in the costs per unit from one period to the
next
D) in the period of rising prices, it leads to lower operating income and lower tax payments, saving the
company cash and increasing the company’s value
39) A disadvantage of the weighted-average method compared to the FIFO process-costing method is
that ________.
A) FIFO is computationally simpler
B) FIFO provides better management information for planning and control purposes
C) when unit cost per input prices fluctuate markedly from month to month, its per unit cost is less
representative than FIFO
D) the information it provides about changes in unit prices from one period to the next is less useful than
the information provided by FIFO
40) Which of the following statements is true of process costing?
A) In the period of rising prices, weighted-average process-costing method will result in higher operating
income as compared to FIFO process-costing method.
B) The operating income and the tax payments of a company are not affected by the method of process-
costing being followed by the company.
C) In the period of rising prices, weighted-average process-costing method will result in lower cost of
goods sold as compared to FIFO process-costing method.
D) In a period of falling prices, weighted-average process-costing method will increase tax payments as
compared to FIFO process-costing method.
41) FIFO Aluminum processes a single type of aluminum. During the current period the following
information was given:
Units
Material Costs
Conversion Costs
Beginning Inventory
3,000
$4,500
$4,800
Started During the Current Period
20,000
48,000
65,000
Ending Inventory
2,500
All materials are added at the beginning of the production process. The beginning inventory was 30%
complete as to conversion, while the ending inventory was 40% completed for conversion purposes.
FIFO Aluminum uses the first-in, first-out system of process costing.
What were the costs assigned to the units transferred out this period (round equivalent unit cost to the
nearest penny)?
A) $113,160
B) $113,236
C) $113,980
D) $122,300
42) Which of the following entries is correct to record depreciation expense of Assembly Department?
A) Work in Process—Assembly
Finished Goods
B) Work in Process—Assembly
Accumulated Depreciation
C) Finished Goods
Work in Process—Assembly
D) Accumulated Depreciation
Work in Process—Assembly
43) Audrey Auto Accessories manufactures plastic moldings for car seats. Its costing system uses two cost
categories, direct materials and conversion costs. Each product must pass through Department A and
Department B. Direct materials are added at the beginning of production. Conversion costs are allocated
evenly throughout production.
Data for Department A for February 2015 are:
Work in process, beginning inventory, 40% converted 200 units
Units started during February 800 units
Work in process, ending inventory: 100 units
30% complete as to conversion costs
100% complete as to materials
Costs for the Department A for February 2015 are:
Work in process, beginning inventory:
Direct materials $600,000
Conversion costs $150,000
Direct materials costs added during February $4,000,000
Conversion costs added during February $2,250,000
What were the equivalent units of direct materials and conversion costs, respectively, at the end of
February? Assume Audrey uses the weighted-average process costing method.
A) 1,000; 930
B) 1,000; 1,000
C) 1,000; 900
D) 800; 700
44) The weighted-average process costing method does not distinguish between units started in the
previous period but completed during the current period and units started and completed during the
current period.
45) Activity -based costing plays a more significant role in job costing as compared to process costing as
companies using process costing have homogeneous products.
46) In the weighted-average costing method, the costs of direct materials in beginning inventory are NOT
included in the cost per unit calculation since direct materials are almost always added at the start of the
production process.
47) Partially completed units in ending work in process are 100 percent complete with regard to their
direct materials costs if the direct materials are introduced at the beginning of the process.
48) The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they
are from beginning work-in-process or from work started during the current period) divided by total
equivalent units of work done to date.
49) Weighted-average cost per equivalent unit is obtained by dividing the sum of costs for beginning
work in process plus costs for work done in the current period by total equivalent units of work done to
date.
50) The cost of units completed can differ materially between the weighted average and the FIFO
methods of process costing.
51) As changes in unit costs and inventory levels across periods decrease, the difference in the costs of
units completed under the weighted-average and FIFO methods also decreases.
52) A distinctive feature of the FIFO process costing method is that the work done on beginning
inventory before the current period is kept separate from work done in the current period.
53) In a period of rising prices, the weighted-average method will result in higher tax payments.
54) In calculating cost per equivalent unit, the FIFO method of process costing merges the work and the
costs of the beginning inventory with the work and the costs done during the current period.
55) The first-in, first-out process-costing method assumes that the earliest equivalent units in work in
process are completed first.
56) In a period of falling prices, the lower cost of goods sold under the FIFO method leads to higher
operating income and higher tax payments.
57) The weighted average method of process costing assigns the cost of equivalent units worked on
during the current period first to complete beginning inventory, next to start and complete new units, and
finally to units in ending work-in-process inventory.
58) The weighted-average method merges unit costs from different accounting periods, obscuring period-
to-period comparisons.