200
168) Following is a partial process cost summary for Mitchell Manufacturing’s Canning Department.
Equivalent Units of Production
Units Completed and transferred out
Units in Ending Work in Process:
Direct Materials
50,000
Conversion
50,000
Direct Materials (15,000 * 100%)
15,000
Conversion (15,000 * 80%)
12,000
Equivalent Units of Production
65,000
62,000
Cost per Equivalent Unit
Costs of beginning work in process
$ 40,500
$ 59,700
Costs incurred this period 136,00
0
Total costs $ 176,50
0
Cost per equivalent unit $ 2.71 per
EUP
183,10
0
$ 242,80
0
$ 3.92 per
EUP
If the units completed were transferred to the Labeling Department, what is the appropriate journal
entry to transfer the conversion costs?
A) Work in Process—Labeling $196,000; Finished Goods—Canning $196,000.
B) Work in Process—Labeling $196,000; Work in Process—Canning $196,000.
C) Work in Process—Labeling $183,100; Work in Process—Canning $183,100.
D) Finished Goods $242,800; Work in Process $242,800.
E) Finished Goods—Labeling $183,100; Finished Goods—Canning $183,100.
169) Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its
cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were
completed and transferred out as finished goods during the month. The ending Work in Process
inventory consists of 36,000 equivalent units of direct materials and 36,000 equivalent units of
conversion costs. The amount that should be reported in ending Work in Process Inventory is:
A) $228,600.
B) $93,600.
C) $1,816,100.
D) $135,000.
E) $1,587,500.
203
170) Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its
cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were
completed and transferred out as finished goods during the month, and 36,000 of equivalent units
remained unfinished at the end of the month. The amount that should be reported in Finished
Goods Inventory is:
A) $135,000.
B) $1,816,100.
C) $228,600.
D) $1,587,500.
E) $650,000.
171) During March, the production department of a process operations system completed and
transferred to finished goods 25,000 units that were in process at the beginning of March and
110,000 that were started and completed in March. March’s beginning inventory units were 100%
complete with respect to materials and 55% complete with respect to conversion. At the end of
March, 30,000 additional units were in process in the production department and were 100%
complete with respect to materials and 30% complete with respect to conversion. Compute the
number of equivalent units with respect to both materials and conversion respectively for March
using the FIFO method.
A) 165,000 materials; 144,000 conversion.
B) 165,000 materials; 165,000 conversion.
C) 135,000 materials; 119,000 conversion.
D) 140,000 materials; 130,250 conversion.
E) 144,000 materials; 144,000 conversion.
172) A company uses the weighted average method for inventory costing. At the beginning of a period
the production department had 20,000 units in beginning Work in Process inventory which were
40% complete; the department completed and transferred 165,000 units. At the end of the period,
22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the
number of equivalent units produced by the department.
A) 165,000. B) 181,500. C) 187,000. D) 145,000. E) 173,500.
173) A company uses the FIFO method for inventory costing. At the beginning of a period, the
production department had 20,000 units in beginning Work in Process inventory which were 40%
complete; the department completed and transferred 165,000 units. At the end of the period,
22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the
number of equivalent units produced by the department.
A) 165,000. B) 173,500. C) 187,000. D) 145,000. E) 181,500.
174) A company uses the weighted average method for inventory costing. At the start of a period the
production department had 20,000 units in beginning Work in Process inventory which were 40%
complete; the department completed and transferred 165,000 units. At the end of the period, 22,000
units were in the ending Work in Process inventory and are 75% complete. The production
department had conversion costs in the beginning goods is process inventory of $99,000 and total
conversion costs added during the period are $726,825. Compute the conversion cost per
equivalent unit.
A) $4.76. B) $4.40. C) $4.19. D) $4.61. E) $4.55.
175) A company uses the FIFO method for inventory costing. At the start of the period the production
department had 20,000 units in beginning Work in Process inventory which were 40% complete;
the department completed and transferred 165,000 units. At the end of the period, 22,000 units
were in the ending Work in Process inventory and are 75% complete. The production department
had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added
during the period are $726,825. Compute the equivalent cost per unit for labor.
A) $4.19. B) $4.40. C) $4.55. D) $4.61. E) $4.76.
176) A company uses the weighted-average method for inventory costing. At the end of the period,
22,000 units were in the ending Work in Process inventory and are 100% complete for materials
and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and
conversion $5.35. Compute the cost that would be assigned to the ending Work in Process
inventory for the period.
A) $146,575. B) $93,775. C) $87,725. D) $176,000. E) $132,000.
SHORT ANSWER QUESTIONS
177) Match the following terms with the definitions.
1. ________ (1) Equivalent units of production
2. ________ (2) Job order costing system
3. (3) Hybrid costing system
4. ________ (4) Process operations
5. ________ (5) Process costing system
6. ________ (6) Materials consumption report
7. ________ (7) Process cost summary
A. Costing system that measures costs per unit upon completion of a job.
B. Document that summarizes the materials a department uses when inventory moves continuously
through the manufacturing process during a reporting period; replaces materials requisition.
C. Report of total costs charged to a department, describes its equivalent units of production
achieved, and allocates costs among units worked on in the period.
D. A manufacturing system that contains features of both process costing and job order costing
systems.
E. Number of units that could have been started and completed given the costs incurred during the
period.
F. System of measuring unit costs at the end of a period by combining costs per equivalent unit from
each separate department.
G. Mass production of similar products in a continuous flow of sequential processes.
ESSAY QUESTIONS
178) What is meant by equivalent units of production, and why are they important when a process
costing system is used?
179) What are the four steps in accounting for production activity in a period?
180) Why is the Process Cost Summary important to management and how does the Process Cost
Summary accomplish its purposes?
181) Briefly explain the conditions under which job order cost accounting systems and process costing
systems are commonly applied.
182) Job order costing and process costing are two major costing systems used in manufacturing.
Briefly contrast the characteristics of these two systems.
183) What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?
184) Describe the flow of materials in a process costing system, including accounts used.
185) Describe the flow of labor in a process costing system, including accounts used.
186) Describe the flow of overhead costs in a process costing system, including accounts used.