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126) Richards Corporation uses the FIFO method of process costing. The following information is
available for October in its Fabricating Department:
Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to
conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Calculate the equivalent units of conversion.
A) 294,000 B) 333,000 C) 342,000 D) 317,000 E) 250,000
127) Richards Corporation uses the FIFO method of process costing. The following information is
available for October in its Fabricating Department:
Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to
conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Calculate the cost per equivalent unit of materials.
A) $2.33 B) $2.00 C) $2.20 D) $2.59 E) $1.89
147
128) Richards Corporation uses the FIFO method of process costing. The following information is
available for October in its Fabricating Department:
Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to
conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Calculate the cost per equivalent unit of conversion.
A) $3.15 B) $3.00 C) $3.68 D) $2.76 E) $2.90
129) The following data are available for a company's manufacturing activities:
Beginning Work in Process inventory 5,000 units 75% completed as to
conversion
Units started and completed 15,00
0
Ending Work in Process inventory 15
6
2
,000 units 50% completed as to
Ending Work in Process inventory 6,000 units 50% completed as to
conversion
If materials are added when the production process begins and conversion costs are applied
uniformly throughout the process, what are the equivalent units for direct materials and for
conversion, respectively using the FIFO method of process costing?
A) 16,250 materials; 21,750 conversion.
B) 21,000 materials; 22,250 conversion.
C) 21,000 materials; 19,250 conversion.
D) 16,250 materials; 19,250 conversion .
E) 19,250 materials; 18,750 conversion.
130) A system of accounting in which costs are accumulated and then measured per unit at the end of a
period by combining costs per equivalent unit from various departments is a:
A) Job order cost accounting system.
B) Process costing system.
C) General cost accounting system.
D) Work in Process accounting system.
E) Manufacturing cost accounting system.
131) A company that applies process costing is most frequently characterized by:
A) Low standardization and high production volume.
B) Repetitive production and low production volume.
C) Similar products and high production volume.
D) Repetitive production and unique products.
E) Custom orders and mass production.
132) An organizational unit of a factory that has the responsibility for partially manufacturing or
producing a product is called a:
A) Service department.
B) Production department.
C) Primary department.
D) Responsibility department.
E) Control department.
133) A hybrid costing system would be most appropriate when:
A) Large quantities of identical products are being produced.
B) A manufacturer is able to standardize processes while at the same time attempting to meet
individual customer needs.
C) There is no standardization of units of production.
D) All the products produced are unique.
E) The volume of production is low and costs are high.
134) In a process costing system, direct material costs incurred are recorded:
A) Directly to a Finished Goods Inventory account.
B) Directly to a Cost of Goods Sold account.
C) Indirectly to a Finished Goods Inventory account from Factory Overhead.
D) Directly to a Work in Process Inventory account.
E) Indirectly to a Work in Process Inventory account from Factory Overhead.
135) The purchase of raw materials on account in a process costing system is recorded with a:
A) Debit to Purchases and a credit to Accounts Payable.
B) Debit to Purchases and credit to Cash.
C) Debit to Accounts Payable and a credit to Raw Materials Inventory.
D) Debit to Raw Materials Inventory and a credit to Accounts Payable.
E) Debit to Work in Process Inventory and a credit to Accounts Payable.
136) When raw materials are purchased on account for use in a process costing system, the
corresponding journal entry that should be recorded will include:
A) A debit to Accounts Payable.
B) A debit to Raw Materials Inventory.
C) A credit to Cash.
D) A credit to Raw Materials Inventory.
E) A debit to Work in Process Inventory.
137) Direct labor and indirect labor are recorded, respectively, to:
A) Factory Overhead and Work in Process Inventory.
B) Work in Process Inventory and Finished Goods Inventory.
C) Finished Goods Inventory and Work in Process Inventory.
D) Cost of Goods Sold and Finished Goods Inventory.
E) Work in Process Inventory and Factory Overhead.
