21) What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO
method of process costing?
A) $5,890; $9,133
B) $1,440; $4,800
C) $4,800; $2,640
D) $10,560; $2,640
22) What costs are allocated to the ending work-in-process inventory for direct materials and conversion
costs, respectively, using the FIFO method of process costing?
A) $28,250; $24,850
B) $27,000; $25,920
C) $40,000; $25,590
D) $27,500; $23,600
23) Which of the following journal entries correctly represents the transfer of completed goods for the
current period using the FIFO method of process costing?
A) Finished Goods 10,560.28
Loss from Spoilage 10,560.28
B) Loss from Spoilage 2640.00
Finished Goods 2,640.00
C) Finished Goods 287,600.00
Work in Process 287,600.00
D) Finished Goods 110,000.00
Work in Process 110,000.00
Answer the following questions using the information below:
Samantha’s Office Supplies manufactures desk organizers in its Processing Department. Direct materials
are included at the inception of the production cycle and must be bundled in single kits for each unit.
Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are
placed into production. After inspection, some units are spoiled due to nondetectible material defects.
Spoiled units generally constitute 3% of the good units. Data provided for February 2015 are as follows:
WIP, beginning inventory 2/1/2015 51,000 units
Direct materials (100% complete)
Conversion costs (50% complete)
Started during February 170,000 units
Completed and transferred out 180,000 units
WIP, ending inventory 2/28/2015 26,000 units
Direct materials (100% complete)
Conversion costs (25% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 280,000
Conversion costs 80,000
Direct materials added 408,000
Conversion costs added 264,000
24) What are the normal and abnormal spoilage units, respectively, for February when using FIFO?
A) 2,800 units; 2,960 units
B) 5,100 units; 3,280 units
C) 5,400 units; 9,600 units
D) 5,400 units; 15,000 units
25) What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO
method of process costing?
A) $21,060; $37,440
B) $12,960; $37,440
C) $14,400; $12,960
D) $16,000; $8,000
26) What costs are allocated to the ending work-in-process inventory for direct materials and conversion
costs, respectively, using the FIFO method of process costing?
A) $66,500; $10,700
B) $60,000; $40,200
C) $62,400; $9,750
D) $39,000; $15,600
27) What are the direct material and conversion costs of all the units that were initially in the beginning
work-in-process inventory and were subsequently shipped? Take into account the costs related to the
completion of the conversion of the units during the month. Use the FIFO method of process costing.
A) $76,500; $49,700
B) $0; $38,250
C) $60,000; $40,200
D) $39,000; $15,600
28) What is the total costs of all the units that were initially in the beginning work-in-process inventory
and were subsequently shipped? Take into account the costs related to the completion of the conversion
of the units during the month. Use the FIFO method of process costing.
A) $38,250
B) $360,000
C) $398,250
D) $194,000
29) What are the total costs of all the units that were started during February and subsequently shipped
before the end of the period?
A) $628,560
B) $503,100
C) $636,320
D) $398,250
30) Which of the following journal entries correctly represents the transfer of completed goods begun
during February using the FIFO method of process costing?
A) Finished Goods 503,100
Work in Process 503,100
B) Loss from Spoilage 37,440
Finished Goods 37,440
C) Finished Goods 922,410
Work in Process 922,410
D) Finished Goods 398,250
Work in Process 398,250
31) The first step in the five-step procedure for process costing with spoilage is to compute the output in
terms of equivalent units.
32) The last step in the five-step procedure for process costing with spoilage is to summarize total costs to
account for.
33) Counting spoiled units as part of output units in a process-costing system usually results in a higher
cost per unit.
34) Costs in beginning inventory are pooled with costs in the current period when determining the costs
of good units under the weighted-average method of process costing.
35) Under the weighted-average method, the costs of normal spoilage are added to the costs of their
related good units. Hence, the cost per good unit completed and transferred out equals the total costs
transferred out divided by the number of good units produced.
36) Spoilage is typically assumed to occur at the stage of completion where inspection takes place.
37) Spoilage and rework costs are thoroughly captured in the accounting system.
38) Under the FIFO method, all spoilage costs are assumed to be related to the units completed during
this period using the unit costs of the current period.
39) To simplify calculations under FIFO, spoiled units are accounted for as if they were started in the
current period.
40) Normal spoilage costs are usually deducted from the costs of good units.
41) Identify the appropriate order of the following steps in the procedure for process costing with
spoilage.
a. summarize total costs to account for
b. assign total costs to units completed, to spoiled units, and to units in ending inventory
c. summarize the flow of physical units
d. compute output in terms of equivalent units
e. compute cost per equivalent unit
Step 1 ________
Step 2 ________
Step 3 ________
Step 4 ________
Step 5 ________
42) Maxire Shoes manufactures shoes. All direct materials are included at the inception of the production
process. For March, there were 2,800 units in beginning inventory with a direct material cost of $1,400.
Direct materials totaled $35,000 for the month. Work-in-process records revealed that 70,000 units were
started in March and that 60,000 were finished. Normal spoilage of 2% of units finished was incurred.
Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected
until the process is complete. Endicott uses the weighted-average method.
Required:
a. What are the direct materials costs assigned to completed good units?
b. What are the direct material amounts allocated to the work-in-process ending inventory?
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43) Venosis Sports is a manufacturer of sportswear. It produces all of its products in one department. The
information for the current month is as follows:
Beginning work in process 22,000 units
Units started 44,000 units
Units completed 55,000 units
Ending work in process 10,000 units
Spoilage 1,000 units
Beginning work-in-process direct materials $15,000
Beginning work-in-process conversion $ 6,000
Direct materials added during month $70,800
Direct manufacturing labor during month $37,400
Beginning work in process was half complete as to conversion. Direct materials are added at the
beginning of the process. Factory overhead is applied at a rate equal to 50% of direct manufacturing
labor. Ending work in process was 60% complete. All spoilage is normal and is detected at end of the
process.
Required:
Prepare a production cost worksheet if spoilage is recognized and the weighted-average method is used.
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44) Silver Spoon Incorporated is a manufacturer of kitchen utensils. It produces all of its products in one
department. The information for the current month is as follows:
Beginning work in process 40,000 units
Units started 52,000 units
Units completed 73,000 units
Ending work in process 16,000 units
Spoilage 3,000 units
Beginning work-in-process direct materials $30,000
Beginning work-in-process conversion $ 8,000
Direct materials added during month $126,400
Direct manufacturing labor during month $60,480
Beginning work in process was 25% complete as to conversion. Direct materials are added at the
beginning of the process. Factory overhead is applied at a rate equal to 40% of direct manufacturing
labor. Ending work in process was 60% complete. All spoilage is normal and is detected at the end of the
process.
Required:
Prepare a production cost worksheet if spoilage is recognized and the weighted-average method is used.
39
45) New Image Sports uses a process-costing system. For March, the company had the following
activities:
Beginning work-in-process inventory (1/3 complete) 7,200 units
Units placed in production 28,800 units
Good units completed 21,600 units
Ending work-in-process inventory 12,000 units
Cost of beginning work in process $ 6,000
Direct material costs, current $21,600
Conversion costs, current $14,400
Direct materials are placed into production at the beginning of the process. All spoilage is normal and is
detected at the end of the process. Ending WIP is 60% completed as to conversion.
Required:
Prepare a production cost worksheet using the FIFO method.
