Chapter 3 Process Costing
3-21
116. Pilot Protectors manufactures pocket knives in three processes and uses process costing. In
the Forming Department, all materials are added at the start of production. The following unit
information is available for March production for the Forming Department:
Beginning Work in Process (20% complete) 2,000
Plus: Units started 34,000
Units to account for 36,000
Less: Ending Work in Process (70% complete) 4,000
Units completed 32,000
The following costs are available for March for the Forming Department:
Material Conversion Cost Total Cost
Beginning Work in Process $ 11,800 $ 22,500 $ 34,300
Current cost 65,600 64,500 130,100
Total cost $77,400 $87,000 $164,400
What is the total amount to be debited to the Forming Department’s Work in Process inventory
account during March?
A. $130,100
B. $164,400
C. $13,228
D. $15,600
117. Pilot Protectors manufactures pocket knives in three processes and uses process costing. All
materials are added at the start of the Forming Department process. The following information
is available for March production for the Forming Department:
Beginning Work in Process (20% complete) 2,000
Plus: Units started 34,000
Units to account for 36,000
Less: Ending Work in Process (70% complete) 4,000
Units completed 32,000
The following costs are available for March:
Material Conversion Cost Total Cost
Beginning Work in Process $ 11,800 $ 22,500 $ 34,300
Current cost 65,600 64,500 130,100
Total cost $77,400 $87,000 $164,400
What are the equivalent units for conversion costs in the Forming Department during March?
A. 32,000 units
B. 36,000 units
C. 34,800 units
D. 2,800 units
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-22
118. Pilot Protectors manufactures pocket knives in three processes and uses process costing. All
materials are added at the start of the Forming Department process. The following information
is available for March production for the Forming Department:
Beginning Work in Process (20% complete) 2,000
Plus: Units started 34,000
Units to account for 36,000
Less: Ending Work in Process (70% complete) 4,000
Units completed 32,000
The following costs are available for March:
Material Conversion Cost Total Cost
Beginning Work in Process $ 11,800 $ 22,500 $ 34,300
Current cost 65,600 64,500 130,100
Total cost $77,400 $87,000 $164,400
What is the cost per equivalent unit for materials during March?
A. $2.15
B. $2.50
C. $2.22
D. $4.72
119. Pilot Protectors manufactures pocket knives in three processes and uses process costing. All
materials are added at the start of the Forming Department process. The following information
is available for March production for the Forming Department:
Beginning Work in Process (20% complete) 2,000
Plus: Units started 34,000
Units to account for 36,000
Less: Ending Work in Process (70% complete) 4,000
Units completed 32,000
The following costs are available for March:
Material Conversion Cost Total Cost
Beginning Work in Process $ 11,800 $ 22,500 $ 34,300
Current cost 65,600 64,500 130,100
Total cost $77,400 $87,000 $164,400
What is the cost of goods transferred to the next processing department during March?
A. $15,600
B. $148,800
C. $167,400
D. $130,100
Chapter 3 Process Costing
3-23
120. Keystone Snow Boards Manufacturing Company produces entry-level snowboards and uses
process costing. In the Cutting Department, all materials are added at the start of the process.
The following information on units is available for September production for the Cutting
Department:
Beginning Work in Process, 30% complete for conversion costs 14,000
Units started 125,000
Ending Work in Process, 60% complete for conversion costs 15,000
Units completed 124,000
The following costs are available for September:
Material Conversion Cost Total Cost
Beginning Work in Process $ 8,200 $ 1,350 $ 9,550
Current cost 70,600 47,120 117,720
Total cost $78,800 $48,470 $127,270
What is the dollar amount of the total costs to account during September in the Cutting
Department?
A. $127,270
B. $117,720
C. $48,470
D. $78,800
121. Keystone Snow Boards Manufacturing Company produces entry-level snowboards and uses
process costing. All materials are added at the start of the process. The following information
on units is available for September production for the company’s Cutting Department:
Beginning Work in Process, 30% complete for conversion costs 14,000
Units started 125,000
Ending Work in Process, 60% complete for conversion costs 15,000
Units completed 124,000
The following costs are available for September:
Material Conversion Cost Total Cost
Beginning Work in Process $ 8,200 $ 1,350 $ 9,550
Current cost 70,600 47,120 117,720
Total cost $78,800 $48,470 $127,270
What are the equivalent units for conversion costs in September in the Cutting Department?
A. 139,000 units
B. 124,000 units
C. 133,000 units
D. 140,000 units
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-24
122. Keystone Snow Boards Manufacturing Company produces entry-level snowboards and uses
process costing. In the Forming Department, all materials are added at the start of the
process. The following information on units is available for September production for the
company’s Cutting Department:
Beginning Work in Process, 30% complete for conversion costs 14,000
Units started 125,000
Ending Work in Process, 60% complete for conversion costs 15,000
Units completed 124,000
The following costs are available for September:
Material Conversion Cost Total Cost
Beginning Work in Process $ 8,200 $ 1,350 $ 9,550
Current cost 70,600 47,120 117,720
Total cost $78,800 $48,470 $127,270
Assume equivalent units for materials are 157,600 units. How much is the cost per unit for
materials?
A. $0.50
B. $0.81
C. $0.57
D. $2.00
123. Rooftop Gutters produces polyurethane gutters and uses process costing. All materials are
added at the start of the Forming Department process. The following information is available
for units produced in the Forming Department for the month of April:
Beginning Work in Process, in linear feet
(20% complete with respect to conversion costs) 11,500
Units started 42,000
Ending Work in Process, in linear feet
(60% complete with respect to conversion costs) 9,000
Units completed 44,500
The following costs are available for April:
Material Conversion Cost Total Cost
Beginning Work in Process $11,600 $ 8,540 $ 20,140
Current cost 63,300 21,400 84,700
Total cost $74,900 $29,940 $104,840
What is the sum of total costs to account that will appear on the production cost report for April
for the Forming Department?
A. $74,900
B. $104,840
C. $29,940
D. $144,760
Chapter 3 Process Costing
3-25
124. Rooftop Gutters produces polyurethane gutters and uses process costing. All materials are
added at the start of the Forming Department process. The following information is available
for units produced in the Forming Department for the month of April:
Beginning Work in Process, in linear feet
(20% complete with respect to conversion costs) 11,500
Units started 42,000
Ending Work in Process, in linear feet
(60% complete with respect to conversion costs) 9,000
Units completed 44,500
The following costs are available for April:
Material Conversion Cost Total Cost
Beginning Work in Process $11,600 $ 8,540 $ 20,140
Current cost 63,300 21,400 84,700
Total cost $74,900 $29,940 $104,840
What are the equivalent units for conversion costs for April in the Forming Department?
A. 53,500 units
B. 5,400 units
C. 9,000 units
D. 49,900 units
125. Rooftop Gutters produces polyurethane gutters and uses process costing. All materials are
added at the start of the Forming Department process. The following information is available
for units produced in the Forming Department for the month of April:
Beginning Work in Process, in linear feet
(20% complete with respect to conversion costs) 11,500
Units started 42,000
Ending Work in Process, in linear feet
(60% complete with respect to conversion costs) 9,000
Units completed 44,500
The following costs are available for April:
Material Conversion Cost Total Cost
Beginning Work in Process $11,600 $ 8,540 $ 20,140
Current cost 63,300 21,400 84,700
Total cost $74,900 $29,940 $104,840
What is the cost per equivalent unit for materials for April in the Forming Department?
A. $0.56
B. $2.00
C. $1.40
D. $1.50
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-26
126. Heinz Bottling Company produces various glass and plastic containers and uses a process
costing system. The following information relates to production in the Formulating Department
during January for the company’s 2-quart size glass jars:
• Beginning Work in Process inventory: 4,500 units, 85% complete as to conversion
costs
• Beginning Work in Process inventory—cost of direct materials, $18,000
• Beginning Work in Process inventory—costs of conversion, $14,000
• Number of jars started in January: 270,000 units
• Ending Work in Process Inventory: 2,000 units, 35% complete as to conversion
• Direct materials added during January: $78,075
• Conversion costs incurred during January: $40,700
Direct materials are added at the beginning of the Formulating process, and conversion costs
are incurred uniformly throughout production. How many glass jars were completed during
January in the Forming Department?
A. 268,000 units
B. 272,500 units
C. 274,500 units
D. 272,000 units
127. Heinz Bottling Company produces various glass and plastic containers and uses a process
costing system. The following information relates to production in the Formulating Department
during January for the company’s 2-quart size glass jars:
• Beginning Work in Process inventory: 4,500 units, 85% complete as to conversion
costs
• Beginning Work in Process inventory—cost of direct materials, $18,000
• Beginning Work in Process inventory—costs of conversion, $14,000
• Number of jars started in January: 270,000 units
• Ending Work in Process inventory: 2,000 units, 35% complete as to conversion
• Direct materials added during January: $78,075
• Conversion costs incurred during January: $40,700
Direct materials are added at the beginning of the Formulating process, and conversion costs
are incurred uniformly throughout production. How much is the total cost to account for to
appear on the Forming Department’s January production cost report?
A. $118,775
B. $320,000
C. $149,600
D. $150,775
Chapter 3 Process Costing
3-27
128. Heinz Bottling Company produces various glass and plastic containers and uses a process
costing system. The following information relates to production in the Formulating Department
during January for the company’s 2-quart size glass jars:
• Beginning Work in Process inventory: 4,500 units, 85% complete as to conversion
costs
• Beginning Work in Process inventory—cost of direct materials, $18,000
• Beginning Work in Process inventory—costs of conversion, $14,000
• Number of jars started in January: 270,000 units
• Ending Work in Process inventory: 2,000 units, 35% complete as to conversion
• Direct materials added during January: $78,075
• Conversion costs incurred during January: $40,700
Direct materials are added at the beginning of the Formulating process, and conversion costs
are incurred uniformly throughout production. How much is the cost per equivalent unit for
materials during January in the Forming Department?
A. $0.35
B. $0.55
C. $0.20
D. $0.45
129. Heinz Bottling Company produces various glass and plastic containers and uses a process
costing system. The following information relates to production in the Formulating Department
during January for the company’s 2-quart size glass jars:
• Beginning Work in Process inventory: 4,500 units, 85% complete as to conversion
costs
• Beginning Work in Process inventory—cost of direct materials, $18,000
• Beginning Work in Process inventory—costs of conversion, $14,000
• Number of jars started in January: 270,000 units
• Ending Work in Process inventory: 2,000 units, 35% complete as to conversion
• Direct materials added during January: $78,075
• Conversion costs incurred during January: $40,700
Direct materials are added at the beginning of the Formulating process, and conversion costs
are incurred uniformly throughout production. How much is the total cost accounted for during
January for the Forming Department?
A. $118,775
B. $320,000
C. $149,600
D. $150,775
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-28
130. Hair Shine Company produces Shine Bright shampoo and uses a process costing system.
Conversion costs are added evenly throughout the production process. Materials are added at
the beginning of the process. The following information is available for March for the Mixing
Department:
Units in process, March 1 (40% complete) 200
Units started in March 1,000
Units in process, March 31 (80% complete) 250
Conversion costs in Work in Process, March 1:
Labor $ 38,000
Overhead 8,000
Labor costs during March (5,100 hours) 102,780
Overhead applied during March 49,020
How many units were completed in the Mixing Department during March?
A. 950 units
B. 1,200 units
C. 1,000 units
D. 1,050 units
131. Hair Shine Company produces Shine Bright shampoo and uses a process costing system.
Conversion costs are added evenly throughout the production process. Materials are added at
the beginning of the process. The following information is available for March for the Mixing
Department:
Units in process, March 1 (40% complete) 200
Units started in March 1,000
Units in process, March 31 (80% complete) 250
Conversion costs in Work in Process, March 1:
Labor $ 38,000
Overhead 8,000
Labor costs during March (5,100 hours) 102,780
Overhead applied during March 49,020
What is the cost per equivalent unit for conversion costs in March?
A. $132.00
B. $164.82
C. $172.00
D. $367.25
132. Hair Shine Company produces Shine Bright shampoo and uses a process costing system.
Conversion costs are added evenly throughout the production process. Materials are added at
the beginning of the process. The following information is available for March for the Mixing
Department:
Units in process, March 1 (40% complete) 200
Units started in March 1,000
Units in process, March 31 (80% complete) 250
Conversion costs in Work in Process, March 1:
Labor $ 38,000
Overhead 8,000
Labor costs during March (5,100 hours) 102,780
Overhead applied during March 49,020
Chapter 3 Process Costing
3-29
What is the amount of conversion costs included in units completed during March?
A. $197,800
B. $163,400
C. $125,400
D. $348,890
Answers to Multiple Choice
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-30
MATCHING
133. Match each of the following terms with the phrase that most closely describes it. Each answer
may be used only once.
_____ 1. conversion costs
_____ 2. cost per equivalent unit
_____ 3. equivalent units
_____ 4. lost units
_____ 5. process costing
_____ 6. production cost report
_____ 7. total cost accounted for
_____ 8. transferred-in cost
_____ 9. units accounted for
_____ 10. units to account for
A. units in beginning Work in Process inventory plus units started during the period
B. partially completed units converted to a comparable number of completed units
C. provides a reconciliation of units, a reconciliation of costs, and details of the cost per
equivalent unit calculation
D. the key value in the production cost report; the average unit cost in a process costing
system
E. units that are not finished due to evaporation, damage, or theft
F. a system of determining costs of units produced that is essentially a system of
averaging
G. units completed and transferred to the next department plus units in ending Work in
Process inventory
H. the sum of the costs for labor and overhead
I. cost of completed units plus cost of ending Work in Process inventory
J. costs incurred in one department that are transferred to the next processing
department
Chapter 3 Process Costing
3-31
EXERCISES
134. Neon Lamp Post uses process costing. During June, the Painting Department of Neon Lamp
Post completed production of 43,700 LED lamp posts. At the beginning of June, the company
had 1,300 posts that were 75 percent complete with respect to material and 50 percent
complete with respect to conversion costs. During the month, the company started production
of 44,000 posts. How many posts were in Work in Process at the end of June?
Answer
135. Taylor Tackers uses process costing. It produces a tacker used by movers to seal boxes.
Taylor has almost no inventories of material, work in process, or finished goods. The balances
are so small that the company treats them as zero for purposes of its accounting reports.
During July, the company produced and shipped 13,000 tackers at a cost of $13.50 per tacker.
The cost consisted of 20 percent material cost, 25 percent labor cost, and 55 percent
manufacturing overhead. Prepare journal entries to record the following:
a. Issuance of direct material
b. Cost of direct labor accrued
c. Application of manufacturing overhead
d. Completion of units in process and their transfer to Finished Goods
e. Cost of goods sold
Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
3-32
136. Rigid Food Corporation produces gourmet yogurt. The following data pertain to the Mixing
Department for the year ended December 31, 2017:
Percentage of Completion
Units Direct Material Conversion Costs
Work in process, January 1 8,000 pounds 25% 15%
Work in process, December 31 6,200 pounds 60% 70%
During the year, the company started production of 120,000 pounds. Prepare a unit
reconciliation schedule and determine the equivalent units for the Mixing Department for 2017.
Answer
137. XeroClean Chemicals refines a variety of chemicals for cleaning products and uses process
costing. The following data are from the company’s Extracting Department:
Work in process, May 1
840,000 gallons
Direct material
100% complete
Conversion costs
40% complete
Units started in process during May
3,110,000 gallons
Work in process, May 31
230,000 gallons
Direct material
100% complete
Conversion costs
60% complete
Compute the equivalent units for direct material and equivalent units for conversion costs for
the Extracting Department for the month of May.
Answer
Chapter 3 Process Costing
3-33
138. DynaDrip’s Mixing Department opened on June 1, 2017. The company uses process costing.
During June, 28,000 units were completed and transferred out of the Mixing Department to the
next department. On June 30, 2017, the 3,100 units which remained in the Mixing Department
were 60% complete with respect to conversion costs and 100% complete with respect to
materials. How many equivalent units of product were there in the Mixing Department during
June for materials and conversion costs, respectively?
139. Dairy Whip Products uses process costing. Its Blending Department is the second department
in the production of Cool Whipper. The beginning inventory in the Blending Department
consisted of 10,000 units that were 70% complete with respect to materials and 30% complete
with respect to conversion costs. During the month, 60,000 units were transferred in from the
previous department. The ending inventory consisted of 6,000 units that were 50% complete
with respect to materials and 40% complete with respect to conversion costs. Calculate the
equivalent units for transferred-in costs, materials, and conversion costs for the Blending
Department for the month of March.
Answer
140. Prince Marinades uses process costing. Its Mixing Department had a beginning inventory of
650 units that had accumulated conversion costs of $16,486. During June, the Mixing
Department incurred conversion costs of $43,400 and started 21,900 new units. Ending
inventory consisted of 700 units that were 40% complete with respect to conversion costs.
Materials are added at the beginning of the process. Calculate the cost per equivalent unit for
conversion costs in the Mixing Department for June.