Name:
Class:
Date:
Indicate whether the statement is true or false.
1. In applying the first-in, first-out method of costing inventories, if 8,000 units which were 30% completed are in process
at June 1, 28,000 units were completed during June, and 4,000 units were 75% completed at June 30, the number of
equivalent units of production for June was 33,400.
a.
True
b.
False
2. In a process costing system, indirect materials are charged to Work in Process.
a.
True
b.
False
3. The amount journalized showing the cost added to finished goods is taken from the cost of production report.
a.
True
b.
False
4. In a process costing system, costs flow into finished goods inventory only from the work in process inventory of the last
manufacturing process.
a.
True
b.
False
5. In a process costing system, each process will have a work in process inventory account.
a.
True
b.
False
6. Conversion costs are usually incurred evenly throughout a process.
a.
True
b.
False
7. Once equivalent units are computed for materials, this number will also be used for direct labor and factory overhead.
a.
True
b.
False
8. If 30,000 units of materials enter production during the first year of operations, 25,000 of the units are finished, and
5,000 are 50% completed, the number of equivalent units of production would be 28,500.
a.
True
b.
False
9. Conversion costs include materials, direct labor, and factory overhead.
a.
True
b.
False
10. Equivalent units should be computed separately for direct materials and conversion costs.
a.
True
b.
False
Name:
Class:
Date:
11. One of the differences in accounting for a process costing system compared to a job order system is that the amounts
used to transfer goods from one department to the next comes from the cost of production report instead of job cost cards.
a.
True
b.
False
12. If a department that applies FIFO process costing starts the reporting period with 50,000 physical units that were 25%
complete with respect to direct materials and 40% complete with respect to conversion, it must add 12,500 equivalent
units of direct materials and 20,000 equivalent units to direct labor to complete them.
a.
True
b.
False
13. The first step in preparing a cost of production report is to compute equivalent units of production.
a.
True
b.
False
14. Both job order and process cost accounting use equivalent units of production to determine costs.
a.
True
b.
False
15. Equivalent units of production are always the same as the total number of physical units finished during the period.
a.
True
b.
False
16. In applying the first-in, first-out method of costing inventories, if 8,000 units which were 30% completed are in
process at June 1, 28,000 units were completed during June, and 4,000 units were 80% completed at June 30, the number
of equivalent units of production for June was 28,600.
a.
True
b.
False
17. If 10,000 units that were 40% completed are in process at November 1, 80,000 units were completed during
November, and 12,000 were 20% completed at November 30, the number of equivalent units of production for November
was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)
a.
True
b.
False
18. The cost of production report is often used by managers for analyzing the change in the conversion and direct
materials cost per equivalent unit between periods.
a.
True
b.
False
19. Conversion costs are seldom added evenly throughout the process.
a.
True
b.
False
20. If the costs for direct materials, direct labor, and factory overhead were $60,000, $35,000, and $25,000, respectively,
for 20,000 equivalent units of production, the conversion cost per equivalent unit was $6.
a.
True
Name:
Class:
Date:
b.
False
21. Computing the yield of a process will identify the level of materials losses from waste.
a.
True
b.
False
22. The direct materials costs and direct labor costs incurred by a production department are referred to as conversion
costs.
a.
True
b.
False
23. When a process cost accounting system records the purchase of materials, the materials account is credited.
a.
True
b.
False
24. The journal entry to transfer goods in process from Department X to Department Y includes a debit to Work in
Process—Department X.
a.
True
b.
False
25. Companies that use the weighted average method for process costing have unit costs that include costs from more than
one accounting period.
a.
True
b.
False
26. Yield measures the ratio of the materials output quantity to the materials input quantity.
a.
True
b.
False
27. In a process costing system, a separate work in process inventory account is maintained for each customer’s job.
a.
True
b.
False
28. The cost of production report reports the cost of goods sold.
a.
True
b.
False
29. The direct labor costs and factory overhead costs incurred by a production department are referred to as conversion
costs.
a.
True
b.
False
30. If a company uses the weighted average method instead of FIFO, it will still get the same unit costs.
a.
True
b.
False
Name:
Class:
Date:
31. The FIFO method of process costing is simpler than the weighted average method.
a.
True
b.
False
32. Both process and job order cost systems maintain perpetual inventory accounts with subsidiary ledgers.
a.
True
b.
False
33. One of the primary uses of a cost of production report is to assist management in controlling production costs.
a.
True
b.
False
34. All costs of the processes in a process costing system ultimately pass through the cost of goods sold account.
a.
True
b.
False
35. In a process costing system, the cost per equivalent unit is computed before computing equivalent units.
a.
True
b.
False
36. Process cost systems use job order cost cards to accumulate cost data.
a.
True
b.
False
37. Equivalent units are the sum of direct materials used and direct labor incurred.
a.
True
b.
False
38. If the products of a manufacturing process are produced to customer specifications, a process cost system is more
appropriate than a job order cost system.
a.
True
b.
False
39. Direct materials, direct labor, and factory overhead are assigned to each manufacturing process in a process costing
system.
a.
True
b.
False
40. Industries that typically use process cost systems include chemicals, oil, metals, food, paper, and pharmaceuticals.
a.
True
b.
False
41. The FIFO method separates work done on beginning inventory in the previous period from work done on it in the
current period.
a.
True
b.
False
Name:
Class:
Date:
52. If 16,000 units of materials enter production during the first year of operations, 12,000 of the units are finished, and
42. A process cost accounting system records all actual factory overhead costs directly in the work in process account.
a.
True
b.
False
43. The cost of production report reports the cost charged to production and the costs allocated to finished goods and work
in process.
a.
True
b.
False
44. Process manufacturers typically use large machines to process a continuous flow of raw materials into a finished state.
a.
True
b.
False
45. If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively,
for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.
a.
True
b.
False
46. Conversion and direct materials are generally both added at the end of the production process.
a.
True
b.
False
47. In a process costing system, costs are transferred from one work in process inventory account to the next as units are
transferred from one processing department to another.
a.
True
b.
False
48. Equivalent units of production are the number of units that could have been manufactured from start to finish during
an accounting period.
a.
True
b.
False
49. If the principal products of a manufacturing process are identical, a process cost system is more appropriate than a job
order cost system.
a.
True
b.
False
50. In a process cost system, product costs are accumulated by processing department rather than by job.
a.
True
b.
False
51. Costs of ending work in process inventory are included in the cost per equivalent unit computation.
a.
True
b.
False
Name:
Class:
Date:
4,000 are 75% completed, the number of equivalent units of production would be 15,000.
a.
True
b.
False
53. The last step in the preparation of a cost of production report is the computation of equivalent units of production.
a.
True
b.
False
54. Gilbert Corporation had 25,000 finished units and 8,000 units 35% complete. The equivalent units totaled 30,200.
a.
True
b.
False
55. The cost of production report summarizes (1) the units for which the department is accountable and the units to be
assigned costs and (2) the costs charged to the department and the allocation of those costs.
a.
True
b.
False
56. Custom-made goods would be accounted for using a process costing system.
a.
True
b.
False
57. If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively,
for 14,000 equivalent units of production, the total conversion cost was $390,900.
a.
True
b.
False
58. Process manufacturing usually reflects a manufacturer that produces small quantities of unique items.
a.
True
b.
False
59. If 10,000 units that were 50% completed are in process at November 1, 90,000 units were completed during
November, and 20,000 were 20% completed at November 30, the number of equivalent units of production for November
was 90,000. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
The debits to Work in Process—Assembly Department for April, together with data concerning production, are as
follows:
April 1, work in process:
Materials cost, 3,000 units
$ 7,500
Conversion costs, 3,000 units, 80% completed
6,000
Materials added during April, 10,000 units
29,000
Conversion costs during April
35,000
Goods finished during April, 11,500 units
—
April 30, work in process, 1,500 units, 60% completed
—
Name:
Class:
Date:
c.
14,550
All direct materials are placed in process at the beginning of the process, and the weighted average method is used to cost
inventories.
60. The materials cost per equivalent unit (to the nearest cent) for April is
a.
$2.60
b.
$2.81
c.
$3.02
d.
$2.26
Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the
period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to
the departmental work in process account during the period:
Work in process, beginning of period
$ 60,000
Costs added during period:
Direct materials (10,400 at $9.8365)
102,300
Direct labor
79,800
Factory overhead
25,200
61. Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out
method of inventory costing is used, the materials and conversion cost per unit (rounded to the nearest cent), respectively,
are
a.
$5.94 and $5.86
b.
$5.94 and $6.38
c.
$8.00 and $8.68
d.
$9.84 and $9.58
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information
about July’s activities is as follows:
On July 1:
Beginning inventories
850 units, 60% complete
Direct materials cost
$5,000
Conversion costs
$4,000
During July:
Number of units started
15,000
Direct materials added
$155,000
Conversion costs added
$83,520
On July 31:
Ending inventories
1,600 units, 40% complete
62. Using the FIFO method, the number of equivalent units for conversion costs was
a.
14,400
b.
14,380
Name:
Class:
Date:
d.
15,850
63. In process cost accounting, the costs of direct materials and direct labor are charged directly to
a.
service departments
b.
processing departments
c.
customer accounts receivable
d.
job orders
64. Gallons of output for October and November were 45,000 and 56,000, respectively. Gallons of input for October and
November were 46,000 and 64,000, respectively. Which of the following statements is true?
a.
The yield for October was 0.98 (rounded).
b.
The yield for November was 0.88 (rounded).
c.
The yield is deteriorating, and the cause of the loss should be investigated.
d.
all of these choices
Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, and
2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the
departmental work in process account during the period. Assume the company uses FIFO and rounds cost per unit to two
decimal places.
Direct materials (20,000 at $5)
$100,000
Direct labor
142,300
Factory overhead
57,200
65. Assuming that all direct materials are placed in process at the beginning of production, the total cost of the
departmental work in process inventory at the end of the period is
a.
$90,000
b.
$283,140
c.
$199,500
d.
$16,438
66. In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred
was $105,000, and applied factory overhead was $53,000. The total conversion cost is
a.
$218,000
b.
$158,000
c.
$323,000
d.
$53,000
67. Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. Department 2 has transferred-in costs of
$390,000 for the current period. In addition, work in process at the beginning of the period for Department 2 totaled
$75,000, and work in process at the end of the period totaled $90,000. The journal entry to record the flow of costs into
Department 3 during the period is
a.
Work in Process—Department 3 375,000
Work in Process—Department 2 375,000
Name:
Class:
Date:
b.
Work in Process—Department 3 570,000
Work in Process—Department 2 570,000
c.
Work in Process—Department 3 490,000
Work in Process—Department 2 490,000
d.
Work in Process—Department 3 555,000
Work in Process—Department 2 555,000
68. In a process cost system, the amount of work in process inventory is valued by
a.
finding the sum of all open job costs
b.
allocating departmental costs between completed and partially completed units
c.
multiplying units in ending inventory by the direct materials cost per unit
d.
finding the sum of all completed jobs
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
69. The journal entry to record the flow of costs into Department 2 for direct labor is
a.
Work in Process—Department 2 65,000
Wages Payable 65,000
b.
Wages Payable 65,000
Work in Process—Department 2 65,000
c.
Work in Process—Department 2 125,000
Wages Payable 125,000
d.
Work in Process—Department 2 185,000
Wages Payable 185,000
70. Carolwood Company manufactures widgets and uses process costing. The status of the beginning and ending
inventory is:
Beginning inventory
30% of the manufacturing process is complete
Ending inventory
55% of the manufacturing process is complete
Direct materials are added to the manufacturing process in stages. None are added when production begins.
Approximately half of the materials are added when the product is 25% complete. The other half are added when the
product is 50% complete.
The percentages complete of beginning inventory and ending inventory with respect to direct materials (DM) and
conversion costs (CC), respectively, are
a.
beginning inventory: DM–50%; CC–30%
ending inventory: DM–100%; CC–55%
b.
beginning inventory: DM–50%; CC–30%
ending inventory: DM–55%; CC–55%
c.
beginning inventory: DM–30%; CC–30%
ending inventory: DM–55%; CC–55%
d.
beginning inventory: DM–50%; CC–70%
Name:
Class:
Date:
ending inventory: DM–100%; CC–45%
Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of
the period, 34,000 units of direct materials were added during the period, 31,000 units were completed during the period,
and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the
beginning of the process. The first-in, first-out method is used to cost inventories.
71. The number of equivalent units of production for conversion costs for the period was
a.
29,600
b.
32,000
c.
32,400
d.
34,000
72. Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of
$12,500. During the period, 14,000 units of direct materials were added at a cost of $28,700, and 15,000 units were
completed. At the end of the period, 3,000 units were 75% completed. All materials are added at the beginning of the
process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for
the period for conversion if the first-in, first-out method is used to cost inventories was
a.
15,650
b.
14,850
c.
14,150
d.
14,650
73. Department S had 500 units 60% completed in process at the beginning of the period, 9,000 units completed during
the period, and 600 units 30% completed at the end of the period. What was the number of equivalent units of production
for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage
applies to both direct materials and conversion cost.
a.
8,880
b.
9,300
c.
8,700
d.
9,000
Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of
$12,500, 14,000 units of direct materials were added during the period at a cost of $28,700, 15,000 units were completed
during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning
of the process. Direct labor was $32,450 and factory overhead was $18,710.
74. The number of equivalent units of production for the period for conversion if the weighted average method is used to
cost inventories was
a.
15,650
b.
14,850
c.
18,000
d.
17,250
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
Name:
Class:
Date:
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
75. The journal entry to record the flow of costs into Department 2 for applied overhead is
a.
Factory Overhead—Department 2 80,000
Work in Process—Department 2 80,000
b.
Work in Process—Department 2 230,000
Factory Overhead—Department 2 230,000
c.
Work in Process—Department 2 80,000
Factory Overhead—Department 2 80,000
d.
Work in Process—Department 2 150,000
Factory Overhead—Department 2 150,000
76. A report prepared periodically by a processing department, summarizing (1) the units for which the department is
accountable and the disposition of those units and (2) the costs incurred by the department and the allocation of those
costs between completed and incomplete production, is termed a
a.
factory overhead production report
b.
manufacturing cost report
c.
process cost report
d.
cost of production report
The following production data were taken from the records of the Finishing Department for June:
Inventory in process, June 1, 30% completed
4,000 units
Completed units during June
65,000 units
Ending inventory, 60% completed
7,000 units
77. The number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming
that the first-in, first-out method is used to cost inventories, is
a.
68,000 units
b.
70,400 units
c.
66,200 units
d.
4,200 units
78. Which of the following would most likely use a process cost system?
a.
custom home builder
b.
custom helicopter manufacturer
c.
graduation photographer
d.
lumber mill
Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of
$12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs, 14,000 units of direct materials
were added during the period at a cost of $28,700, 15,000 units were completed during the period, and 3,000 units were
75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450
and factory overhead was $18,710.
Name:
Class:
Date:
79. If the weighted average method is used, the conversion cost per unit (rounded to the nearest cent) would be
a.
$3.71
b.
$2.84
c.
$2.97
d.
$3.23
Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, and
2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the
departmental work in process account during the period. Assume the company uses FIFO and rounds cost per unit to two
decimal places.
Direct materials (20,000 at $5)
$100,000
Direct labor
142,300
Factory overhead
57,200
80. Assuming that all direct materials are placed in process at the beginning of production, the total cost of the 18,000
units completed during the period is
a.
$256,500
b.
$199,500
c.
$299,500
d.
$269,550
81. Equivalent production units are generally determined for
a.
direct materials and conversion costs
b.
direct materials only
c.
conversion costs only
d.
direct materials and direct labor costs
82. If a company uses a process costing system to account for the costs in its five production departments, how many
work in process accounts will it use?
a.
6
b.
5
c.
4
d.
2
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
83. The journal entry to record the flow of costs into Department 1 during the period for applied overhead is
a.
Factory Overhead—Department 1 150,000
Work in Process—Department 1 150,000
b.
Work in Process—Department 1 125,000
Factory Overhead—Department 1 125,000
Name:
Class:
Date:
c.
Work in Process—Department 1 80,000
Factory Overhead—Department 1 80,000
d.
Work in Process—Department 1 150,000
Factory Overhead—Department 1 150,000
84. In a process cost system, the cost of completed production in Department A is transferred to Department B by which
of the following journal entries?
a.
debit Work in Process—Department B and credit Work in Process—Department A
b.
debit Work in Process—Department B and credit Finished Goods—Department A
c.
debit Work in Process—Department B and credit Cost of Goods Sold—Department A
d.
debit Finished Goods—Department A and credit Work in Process—Department B
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information
about July’s activities is as follows:
On July 1:
Beginning inventories
850 units, 60% complete
Direct materials cost
$5,000
Conversion costs
$4,000
During July:
Number of units started
15,000
Direct materials added
$155,000
Conversion costs added
$83,520
On July 31:
Ending inventories
1,600 units, 40% complete
85. Using the FIFO method, the cost per equivalent unit for materials used during July was
a.
$10.78
b.
$10.33
c.
$9.78
d.
$10.65
86. Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June,
and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, the number of
equivalent units of production for conversion costs for the period is
a.
7,300 units
b.
5,640 units
c.
6,700 units
d.
5,850 units
87. Which of the following is not a characteristic of a process cost system?
a.
Manufacturing costs are grouped by departments or by process.
b.
The system may use several work in process accounts.
c.
The system measures costs for each completed job.
Name:
Class:
Date:
d.
The system provides useful product cost information for decision making.
88. The four steps necessary to complete a cost of production report in a process cost system are
1.
allocate costs to units transferred out and partially completed units
2.
determine the units to be assigned costs
3.
determine the cost per equivalent unit
4.
compute equivalent units of production
The correct ordering of the steps is
a.
2, 4, 3, 1
b.
4, 2, 3, 1
c.
2, 3, 4, 1
d.
2, 3, 1, 4
Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the
period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to
the departmental work in process account during the period:
Work in process, beginning of period
$ 60,000
Costs added during period:
Direct materials (10,400 at $9.8365)
102,300
Direct labor
79,800
Factory overhead
25,200
89. Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out
method of inventory costing is used, the equivalent units for materials and conversion costs, respectively, are
a.
14,000 and 12,160
b.
10,400 and 10,960
c.
14,000 and 13,600
d.
10,400 and 10,240
90. The debits to Work in Process—Assembly Department for April, together with data concerning production, are as
follows:
April 1, work in process:
Materials cost, 3,000 units
$ 7,200
Conversion costs, 3,000 units, 60% completed
6,000
Materials added during April, 10,000 units
25,000
Conversion costs during April
35,750
Goods finished during April, 12,000 units
0
April 30 work in process, 1,000 units, 40% completed
0
All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories.
The materials cost per equivalent unit for April is
a.
$2.48
b.
$2.08
c.
$2.50
d.
$5.25
Name:
Class:
Date:
91. Which of the following costs incurred by a tool manufacturer would not be included in conversion costs?
a.
factory supervisor’s salary
b.
machine operator’s wages
c.
raw steel
d.
factory maintenance personnel supplies
92. Blue Lake Water Company has two departments, Purifying and Bottling. The Bottling Department received 76,000
liters from the Purifying Department. During the period, the Bottling Department completed 74,000 liters, including 3,000
liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. The number of liters
started and completed during the period is
a.
71,000
b.
69,000
c.
73,000
d.
79,000
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
93. The journal entry to record the flow of costs into Department 1 for direct labor is
a.
Work in Process—Department 1 65,000
Wages Payable 65,000
b.
Wages Payable 125,000
Work in Process—Department 1 125,000
c.
Work in Process—Department 1 125,000
Wages Payable 125,000
d.
Wages Payable 65,000
Work in Process—Department 1 65,000
94. Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during
June, and 1,200 units 25% completed at the end of June. The number of equivalent units of production for conversion
costs for June if the first-in, first-out method is used to cost inventories is
a.
11,500 units
b.
11,200 units
c.
15,200 units
d.
10,000 units
Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the
period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the
departmental work in process account during the period:
Work in process, beginning of period
$40,000
Costs added during period:
Direct materials (10,400 units at $8)
83,200
Direct labor
63,000
Name:
Class:
Date:
Factory overhead
25,000
95. All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory
costing is used. The total cost of the departmental work in process inventory at the end of the period (round unit cost
calculations to four decimal places is
a.
$16,163
b.
$21,432
c.
$35,670
d.
$28,935
Carmelita Inc. has the following information available:
Costs from Beginning Inventory
Costs from Current Period
Direct materials
$2,000
$ 22,252
Conversion costs
6,200
150,536
96. At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and
100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory
contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The
company uses the FIFO process cost method.
The cost of completing a unit during the current period was
a.
$36.19
b.
$34.88
c.
$35.95
d.
$35.89
97. Which of the following is not a use of the cost of production report?
a.
to help managers control operations
b.
to help managers isolate problems
c.
to project production
d.
to help managers improve operations
Carmelita Inc. has the following information available:
Costs from Beginning Inventory
Costs from Current Period
Direct materials
$2,000
$ 22,252
Conversion costs
6,200
150,536
98. At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and
100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory
contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The
company uses the FIFO process cost method.
The equivalent units of production for direct materials and conversion costs, respectively, were
a.
5,340 for direct materials and 4,902 for conversion costs
b.
4,840 for direct materials and 4,802 for conversion costs
Name:
Class:
Date:
c.
4,602 for direct materials and 4,802 for conversion costs
d.
4,902 for direct materials and 4,802 for conversion costs
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
99. The journal entry to record the flow of costs into Department 1 during the period for direct materials is
a.
Work in Process—Department 1 100,000
Materials 100,000
b.
Work in Process—Department 1 55,000
Materials 55,000
c.
Materials 100,000
Work in Process—Department 1 100,000
d.
Materials 55,000
Work in Process—Department 1 55,000
Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of
$12,500, 14,000 units of direct materials were added during the period at a cost of $28,700, 15,000 units were completed
during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning
of the process. Direct labor was $32,450 and factory overhead was $18,710.
100. The number of equivalent units of production for the period for materials if the weighted average method is used to
cost inventories was
a.
15,650
b.
18,000
c.
17,250
d.
17,700
101. Mocha Company manufactures a single product by a continuous process, involving three production departments.
The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. Work in process at the beginning of the period for Department 1 was $75,000, and
work in process at the end of the period totaled $60,000. The records indicate that direct materials, direct labor, and
applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process
at the beginning of the period for Department 2 totaled $75,000, and work in process at the end of the period totaled
$60,000. The journal entry to record the flow of costs into Department 3 during the period is
a.
Work in Process—Department 3 585,000
Work in Process—Department 2 585,000
b.
Work in Process—Department 3 570,000
Work in Process—Department 2 570,000
c.
Work in Process—Department 3 555,000
Work in Process—Department 2 555,000
d.
Work in Process—Department 3 165,000
Work in Process—Department 2 165,000
Name:
Class:
Date:
Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of
$12,500, 13,700 units of direct materials were added during the period at a cost of $28,700, 15,000 units were completed
during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning
of the process. Direct labor was $32,450 and factory overhead was $18,710.
102. The number of equivalent units of production for the period for conversion, if the first-in, first-out method is used to
cost inventories, was
a.
14,365
b.
13,615
c.
12,000
d.
15,865
The following production data were taken from the records of the Finishing Department for June:
Inventory in process, June 1, 30% completed
4,000 units
Completed units during June
65,000 units
Ending inventory, 60% completed
7,000 units
103. The number of materials equivalent units of production in the June 30 Finishing Department inventory, assuming that
the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process, is
a.
7,000 units
b.
68,000 units
c.
72,000 units
d.
76,000 units
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
104. The journal entry to record the flow of costs into Department 2 during the period for direct materials is
a.
Work in Process—Department 2 100,000
Materials 100,000
b.
Work in Process—Department 2 55,000
Materials 55,000
c.
Work in Process—Department 2 150,000
Materials 150,000
d.
Materials 55,000
Work in Process—Department 2 55,000
105. The costs of materials consumed in producing good units in the Production Department of Jacobs Company were
$38,000 and $39,125 for June and July, respectively. The number of equivalent units produced in June and July was 4,000
and 4,250, respectively. Which of the following best describes the change in the cost of materials between the two
months?
a.
The cost of materials decreased by $0.29 per unit, indicating an improvement.
b.
The cost of materials increased by $1,125, indicating an unfavorable change.
Name:
Class:
Date:
c.
The cost of materials increased by $0.28 per unit, indicating an unfavorable change
d.
The cost of materials increased by $0.88 per unit, indicating an unfavorable change.
Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of
$12,500, 13,700 units of direct materials were added during the period at a cost of $28,700, 15,000 units were completed
during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning
of the process. Direct labor was $32,450 and factory overhead was $18,710.
106. The number of equivalent units of production for the period for materials, if the first-in, first-out method is used to
cost inventories, was
a.
16,700
b.
12,000
c.
1,700
d.
13,700
107. The cost system best suited to industries that manufacture a large number of identical units of commodities on a
continuous basis is
a.
process
b.
departmental
c.
first-in, first-out
d.
job order
Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of
the period, 34,000 units of direct materials were added during the period, 31,000 units were completed during the period,
and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the
beginning of the process. The first-in, first-out method is used to cost inventories.
108. The number of equivalent units of production for material costs for the period was
a.
34,000
b.
29,800
c.
29,000
d.
32,000
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information
about July’s activities is as follows:
On July 1:
Beginning inventories
850 units, 60% complete
Direct materials cost
$5,000
Conversion costs
$4,000
During July:
Number of units started
15,000
Direct materials added
$155,000
Conversion costs added
$83,520
On July 31:
Name:
Class:
Date:
Ending inventories
1,600 units, 40% complete
109. Using the FIFO method and rounding cost per unit to four decimal places, the cost of goods completed and
transferred out during July was
a.
$227,270
b.
$225,060
c.
$236,905
d.
$228,200
110. A process cost system would be appropriate for a
a.
natural gas refinery
b.
jet airplane builder
c.
catering business
d.
custom cabinet builder
111. The debits to Work in Process—Assembly Department for April, together with data concerning production, are as
follows:
April 1, work in process:
Materials cost, 3,000 units
$ 7,200
Conversion costs, 3,000 units, 40% completed
6,000
Materials added during April, 10,000 units
25,000
Conversion costs during April
30,800
Goods finished during April, 12,000 units
0
April 30 work in process, 1,000 units, 40% completed
0
All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories.
The conversion cost per equivalent unit for April is
a.
$2.48
b.
$2.75
c.
$2.50
d.
$5.25
112. In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred
was $84,000, and applied factory overhead was $45,500. The total conversion cost is
a.
$129,500
b.
$154,600
c.
$284,100
d.
$238,600
113. The following production data were taken from the records of the Finishing Department for June:
Inventory in process, June 1, 25% completed
1,500 units
Transferred to finished goods during June
5,000 units
Equivalent units of production during June
5,200 units
Determine the number of equivalent units of production in the June 30 Finishing Department inventory, assuming that the
first-in, first-out method is used to cost inventories. The completion percentage of 25% applies to both direct materials
Name:
Class:
Date:
and conversion costs.
a.
575 units
b.
200 units
c.
1,000 units
d.
300 units
114. The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct
materials, and
a.
selling expenses
b.
direct expenses
c.
accounting salaries expense
d.
factory overhead
Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information
about July’s activities is as follows:
On July 1:
Beginning inventories
850 units, 60% complete
Direct materials cost
$5,000
Conversion costs
$4,000
During July:
Number of units started
15,000
Direct materials added
$155,000
Conversion costs added
$83,520
On July 31:
Ending inventories
1,600 units, 40% complete
115. Using the FIFO method, the number of units started and completed in July was
a.
14,250
b.
15,000
c.
13,400
d.
15,740
116. Which of the following is not included in conversion costs?
a.
direct labor
b.
factory overhead
c.
indirect labor
d.
direct materials
Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of
$12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs, 14,000 units of direct materials
were added during the period at a cost of $28,700, 15,000 units were completed during the period, and 3,000 units were
75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450
and factory overhead was $18,710.
Name:
Class:
Date:
117. If the weighted average method is used, the materials cost per unit (rounded to the nearest cent) would be
a.
$2.04
b.
$1.59
c.
$1.91
d.
$2.00
118. Which of the following measures would not help managers to control and improve operations?
a.
units produced per time period
b.
cost trends of a product
c.
yield trends
d.
commissions paid per time period
119. For which of the following businesses would a process cost system be appropriate?
a.
boat repair service
b.
shampoo manufacturer
c.
dressmaker
d.
custom furniture manufacturer
120. Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as
conversion costs?
a.
accounting department costs
b.
raw lumber
c.
assembly labor’s wages
d.
administrative salaries
121. All of the following are characteristics of a process cost system except
a.
the system may use several work in process inventory accounts
b.
manufacturing costs are grouped by department rather than by jobs
c.
the system accumulates costs per job
d.
it uses a perpetual inventory system for materials, work in process, and finished goods
122. The portion of whole units that were completed with respect to either materials or conversion costs within a given
accounting period is the definition of
a.
units started and completed
b.
equivalent units
c.
conversion costs
d.
ending work in process
Carmelita Inc. has the following information available:
Costs from Beginning Inventory
Costs from Current Period
Direct materials
$2,000
$ 22,252
Conversion costs
6,200
150,536
Name:
Class:
Date:
123. At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and
100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory
contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. Assume that
the company uses the FIFO process cost method. Round cost per unit figures to the nearest cent when calculating total
costs.
The total costs that will be transferred into Finished Goods for units started and completed were
a.
$161,775
b.
$156,960
c.
$162,855
d.
$161,505
Department W had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to
Department X from Department W during the period; and 1,800 units were one-half completed at the end of the
period. Assume the completion ratios apply to direct materials and conversion costs.
124. The equivalent units of production used to compute unit conversion cost on the cost of production report for
Department W, assuming the company uses FIFO, are
a.
16,100 units
b.
13,600 units
c.
15,000 units
d.
18,500 units
125. Process and job order cost systems are similar in all of the following ways except
a.
both accumulate product costs—direct materials, direct labor, and factory overhead
b.
both allocate product cost to units produced
c.
both maintain perpetual inventories
d.
both use job order cost cards
The following unit data were assembled for the assembly process of Super Co. for the month of April. Direct materials are
added at the beginning of the process. Conversion costs are added uniformly over the production process. The company
uses the FIFO method.
Units
Beginning work in process, 60% completed
5,000
Units started in April
48,000
Ending work in process, 30% completed
4,000
126. The number of equivalent units produced with respect to direct materials costs is
a.
48,000
b.
49,000
c.
43,000
d.
53,000
127. The debits to Work in Process—Assembly Department for May, together with data concerning production, are as
follows:
May 1, work in process:
Name:
Class:
Date:
Materials cost, 3,000 units
$ 8,000
Conversion costs, 3,000 units, 66.7% completed
6,000
Materials added during May, 10,000 units
30,000
Conversion costs during May
31,000
Goods finished during May, 11,500 units
0
May 31 work in process, 1,500 units, 50% completed
0
All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost
inventories. The materials cost per equivalent unit for May is
a.
$3.00
b.
$3.80
c.
$2.92
d.
$2.31
128. Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of
$7,000. During the period, 4,000 units of direct materials were added at a cost of $8,200, and 4,500 units were completed.
At the end of the period, 500 units were 40% completed. All materials are added at the beginning of the process. Direct
labor was $28,700 and factory overhead was $4,510. The cost of the 500 units in process at the end of the period if the
first-in, first-out method is used to cost inventories was
a.
$3,240
b.
$5,175
c.
$2,569
d.
$2,645
129. The cost of production report for August shows conversion costs for 5,000 gallons, 70% complete, to be $2,450. The
conversion cost per equivalent unit in July was $0.75. Which of the following best describes the change in the conversion
costs between the two months?
a.
The conversion costs increased by $0.05 per unit, indicating an improvement.
b.
The conversion costs increased by $160 overall, indicating an unfavorable change.
c.
The conversion costs decreased by $0.05 per unit, indicating an improvement.
d.
The conversion costs decreased by $0.05 per unit, indicating an unfavorable change.
130. Department K had 3,000 units 45% completed in process at the beginning of the period, 17,000 units completed
during the period, and 1,200 units 40% completed at the end of the period. What was the number of equivalent units of
production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion
percentage applies to both direct materials and conversion cost.
a.
18,350
b.
16,310
c.
15,650
d.
16,130
Department W had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to
Department X from Department W during the period; and 1,800 units were one-half completed at the end of the
period. Assume the completion ratios apply to direct materials and conversion costs.
131. The total number of units to be assigned cost on the cost of production report for Department W is
a.
12,000 units
Name:
Class:
Date:
b.
13,600 units
c.
18,500 units
d.
17,800 units
132. The two categories of cost comprising conversion costs are
a.
direct labor and indirect labor
b.
direct labor and factory overhead
c.
factory overhead and direct materials
d.
direct labor and direct materials
133. Mocha Company manufactures a single product by a continuous process, involving three production departments.
The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the
beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000.
The journal entry to record the flow of costs into Department 3 during the period for direct materials is
a.
Work in Process—Department 3 100,000
Materials 100,000
b.
Work in Process—Department 3 125,000
Materials 125,000
c.
Work in Process—Department 3 50,000
Materials 50,000
d.
Work in Process—Department 3 70,000
Materials 70,000
Mocha Company manufactures a single product by a continuous process, involving three production departments. The
records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000,
$125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory
overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the
beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
134. The journal entry to record the flow of costs from Department 1 into Department 2 is
a.
Work in Process—Department 2 390,000
Work in Process—Department 1 390,000
b.
Work in Process—Department 2 330,000
Work in Process—Department 1 330,000
c.
Work in Process—Department 2 215,000
Work in Process—Department 1 215,000
d.
Work in Process—Department 2 375,000
Work in Process—Department 1 375,000
The following unit data were assembled for the assembly process of Super Co. for the month of April. Direct materials are
added at the beginning of the process. Conversion costs are added uniformly over the production process. The company
uses the FIFO method.
Units
Beginning work in process, 60% completed
5,000
Units started in April
48,000
Name:
Class:
Date:
Ending work in process, 30% completed
4,000
135. The number of equivalent units produced with respect to conversion costs is
a.
50,200
b.
48,000
c.
53,000
d.
46,200
136. Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning
of the period; 30,000 units of direct materials were added during the period; 32,000 units were completed during the
period; and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at
the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of
production for conversion costs for the period was
a.
32,450
b.
29,450
c.
31,950
d.
26,000
Department S had no work in process at the beginning of the period. It added 12,000 units of direct materials during the
period at a cost of $84,000; 9,000 units were completed during the period; and 3,000 units were 30% completed as to
labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was
$49,500 and factory overhead was $9,900.
137. The total cost of units completed during the period was
a.
$117,000
b.
$143,400
c.
$121,000
d.
$127,450
Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the
period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the
departmental work in process account during the period:
Work in process, beginning of period
$40,000
Costs added during period:
Direct materials (10,400 units at $8)
83,200
Direct labor
63,000
Factory overhead
25,000
138. All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory
costing is used. The total cost of the units started and completed during the period (round unit cost calculations to four
decimal places) is
a.
$211,200
b.
$120,060
c.
$190,275
d.
$20,934
Name:
Class:
Date:
The debits to Work in Process—Assembly Department for April, together with data concerning production, are as
follows:
April 1, work in process:
Materials cost, 3,000 units
$ 7,500
Conversion costs, 3,000 units, 80% completed
6,000
Materials added during April, 10,000 units
29,000
Conversion costs during April
35,000
Goods finished during April, 11,500 units
—
April 30, work in process, 1,500 units, 60% completed
—
All direct materials are placed in process at the beginning of the process, and the weighted average method is used to cost
inventories.
139. The conversion cost per equivalent unit (to the nearest cent) for April is
a.
$2.70
b.
$2.53
c.
$3.31
d.
$5.60
Department S had no work in process at the beginning of the period. It added 12,000 units of direct materials during the
period at a cost of $84,000; 9,000 units were completed during the period; and 3,000 units were 30% completed as to
labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was
$49,500 and factory overhead was $9,900.
140. The total conversion costs for the period were
a.
$59,400
b.
$49,500
c.
$143,400
d.
$9,900
Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the
period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the
departmental work in process account during the period:
Work in process, beginning of period
$40,000
Costs added during period:
Direct materials (10,400 units at $8)
83,200
Direct labor
63,000
Factory overhead
25,000
141. All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory
costing is used. The total cost of 3,600 units of beginning inventory which were completed during the period (round unit
cost calculations to four decimal places) is
a.
$62,206
b.
$16,163
c.
$40,000
d.
$19,275
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Match each business that follows with the job cost system (a or b) it would most likely utilize.
a.
Job order cost system
b.
Process cost system
142. Tax consultant
143. Paint manufacturer
144. Nail manufacturer
145. Videographer
146. Lotions and cosmetic manufacturer
147. Website designer
Match each business that follows to the type of costing system (a or b) it would typically use.
a.
Job order costing
b.
Process costing
148. Movie studio
149. Gasoline refinery
150. Home construction
151. Paper manufacturer
152. Flour mill
Match each phrase that follows with the term (a–h) it describes.
a.
Direct labor and factory overhead
b.
Direct labor and direct materials
c.
Transferred-in costs
d.
Equivalent units
e.
Process costing
f.
Job order costing
g.
First-in, first-out method
h.
Cost of production report
153. A process costing method that costs each period’s equivalent units of work with that period’s costs per equivalent
unit
154. Measure of the work done during a production period, expressed in terms of fully complete units of output
155. Conversion costs
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156. Summary of the activity in a processing department for a specific period
157. Costing system used by a company producing computer chips
158. Prime costs
159. Costs incurred in a previous process that are carried forward as part of the product’s cost when it moves to the next
department
160. Costing system used by a company producing custom window treatments
Match each phrase that follows with the term (a–e) it describes.
a.
Cost of production report
b.
Equivalent units of production
c.
First-in, first-out (FIFO) method
d.
Last-in, first-out (LIFO) method
e.
Whole units
f.
Yield
161. Measures the quantity of output of production relative to the inputs
162. Provides information for controlling and improving operations
163. The number of units in production during a period, whether completed or not
164. The portion of whole units that are complete with respect to materials or conversion costs
165. An assumed flow of costs that most often resembles the physical flow of units
166. The Bottling Department of Mountain Springs Water Company had 4,000 liters in beginning work in process
inventory (40% complete). During the period, 66,000 liters were completed. The ending work in process inventory was
3,000 liters (70% complete). Using the FIFO method, what are the equivalent units for conversion costs?
167. Erin Company’s inventory at December 1 and the costs charged to Work in Process—Department B during
December are as follows:
1,200 units, 40% completed
$ 47,800
From Department A, 26,000 units
845,000
Direct labor
312,000
Factory overhead
176,770
During December, all direct materials are transferred from Department A, the units in process at December 1 were
completed, and of the 26,000 units entering the department, all were completed except 1,000 units that were 70%
completed as to conversion costs. Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for December.
168. Describe the flow of costs in a process cost accounting system.
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169. The cost of energy consumed in producing units in the Bottling Department of Mountain Springs Water Company
was $36,850 and $39,060 for June and July, respectively. The number of equivalent units produced in June and July was
55,000 and 62,000 liters, respectively. Evaluate the change in the cost of energy between the two months.
170. The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is
$28,072. The conversion cost for the period in the Bottling Department is $10,275. The total equivalent units for direct
materials and conversion are 63,800 and 68,500, respectively. Determine the direct materials and conversion cost per
equivalent unit. Round answers to nearest cent.
171. The inventory at June 1 and costs charged to Work in Process—Department 60 during June are as follows:
3,800 units, 60% completed
$ 60,400
Direct materials, 32,000 units
378,000
Direct labor
274,000
Factory overhead
168,000
Total cost to be accounted for
$880,400
During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on
June 1. On June 30, the inventory of work in process consisted of 4,600 units that were 85% completed. Inventories are
costed by the first-in, first-out method, and all materials are added at the beginning of the process.
Determine the following (round unit cost data to four decimal places, i.e., $4.4444, to minimize rounding differences):
a.
Equivalent units of production for conversion cost
b.
Conversion cost per equivalent unit
c.
Total and unit cost of finished goods started in prior period and completed in the current period
d.
Total and unit cost of finished goods started and completed in the current period
e.
Total cost of work in process inventory, June 30
172. Kamin Company’s Mixing Department had a beginning inventory of 4,000 units that had accumulated conversion
costs of $55,000. During the period, the Mixing Department accumulated conversion costs of $92,000 and started 8,000
new units. Ending inventory was 2,500 units that were 40% complete with respect to conversion costs. Kamin uses the
weighted average method to cost inventories.
Compute the cost per equivalent unit for conversion costs in the Mixing Department.
173. On March 1, Upton Company’s Packaging Department had work in process inventory of 8,820 units, which had been
transferred in from the Finishing Department. These units had accumulated costs of $315,000 in previous departments and
$16,000 for conversion costs in the Packaging Department.
During March, 30,000 units were transferred into the department. These units had accumulated costs of $770,000 in the
previous departments. The Packaging Department incurred $54,000 in conversion costs during the month. On March 31,
700 units remained in ending inventory. These units were 80% complete with respect to conversion costs.
Compute the cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using
the weighted average method.
174. Austin Company manufactures a product called Aster in a three-process series. All materials are introduced at the
beginning of the first process. Austin uses the first-in, first-out method of inventory costing. Unit and cost data for the first
process (Department A) for the month of December follow:
Units
Completion
Cost
Work in process inventory:
December 1
12,000
60%
$140,400
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e.
December 31
5,000
40%
?
Started in December:
14,000
Direct materials cost
106,400
Conversion cost
70,310
Completed in December
21,000
?
Prepare Austin’s Department A cost of production report for December.
175. Zang Co. manufacturers its products in a continuous process involving two departments, Machining and Assembly.
Journalize the entries to record the following transactions related to production during June:
a.
Materials purchased on account, $180,000
b.
Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials;
Assembly, $4,900 indirect materials
c.
Direct labor used by Machining, $23,000; Assembly, $47,000
d.
Depreciation expenses: Machining, $4,500; Assembly, $7,800
e.
Factory overhead applied: Machining, $9,700; Assembly, $11,300
f.
Machining Department transferred $98,300 to Assembly Department; Assembly
Department transferred $83,400 to finished goods
g.
Sold goods on account, $100,000; cost of goods sold, $68,000
176. On August 1, Jones Corporation’s Packaging Department had work in process inventory of 8,000 units that were
75% complete with respect to materials and 30% complete with respect to conversion costs. The cost of these units was
$99,525 ($62,000 transferred in from previous departments, $28,775 in materials, and $8,750 in labor and overhead).
During August, 125,000 units were transferred into the department. These units had accumulated costs in previous
departments of $1,418,560. The Packaging Department incurred costs of $799,225 for materials and $498,010 for
conversion costs in August and transferred 131,000 units out of the department. The 2,000 units remaining in ending
inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs. Jones uses the
weighted average method to cost its inventories.
a. Compute the cost per equivalent unit for transferred-in costs, materials, and conversion costs.
b. Determine the cost of the units transferred out of the department.
c. Determine the cost of the ending inventory.
177. The Brass Works is in the process of determining manufacturing overhead. Journalize the entries to record the
following events to Factory Overhead, Administrative Expenses, and Selling Expenses, or allocated between the three as
appropriate. All items were paid in cash at the time of acquisition. Next compute the overhead application rate and
journalize the entry to apply overhead to Work in Process.
a.
Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the
value of the policy protects production, and the balance protects the administrative
offices. Brass Works charges insurance initially to expense.
b.
The electric bill shows an amount due of $1,200. This meter is utilized only by
production, as the office spaces have their own meters.
c.
Payroll reports that the sales manager’s salary for the period is $3,500 and that
production supervisors’ wages for the period are $5,500.
d.
The stockroom reports that $2,575 of materials were purchased for the production
Maintenance Department.
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to be 1,000 strokes in this period, what is the rate per stroke? Do not round your answer.
f.
Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead to
Work in Process. Round answers to the nearest dollar.
Round overhead rate to three decimal places and total cost to nearest dollar.
178. A firm produces its products by a continuous process involving three production departments, 1 through 3. Journalize
the entries to record the following selected transactions related to production during August:
a.
Materials purchased on account, $120,000
b.
Material requisitioned for use in Department 1, $125,700, of which $124,200
entered directly into the product
c.
Labor cost incurred in Department 1, $195,400, of which $174,000 was used
directly in the manufacture of the product
d.
Factory overhead costs for Department 1 incurred on account, $54,700
e.
Depreciation on machinery in Department 1, $29,200
f.
Expiration of prepaid insurance chargeable to Department 1, $7,000
g.
Factory overhead applied to production in Department 1, $106,300
h.
Output of Department 1 transferred to Department 2, $362,700
179. The cost of materials transferred into the Bottling Department of Mountain Springs Water Company is $32,400, with
$26,000 from the Purifying Department, plus an additional $6,400 from the materials storeroom. The conversion cost for
the period in the Bottling Department is $8,750 ($3,750 factory applied and $5,000 direct labor). The total cost transferred
to finished goods for the period was $31,980. The Bottling Department had a beginning inventory of $1,860.
a.
Journalize the entries to record the cost of transferred-in materials, conversion costs, and
the cost transferred out to finished goods.
b.
Determine the balance of Work in Process—Bottling at the end of the period.
180. Everett Company’s inventory at December 31 and the costs charged to Work in Process—Department B during
December are as follows:
500 units, 60% completed
$ 3,460
From Department A, 10,000 units
36,300
Direct labor
7,960
Factory overhead
12,500
During December, all direct materials are transferred from Department A, and the units in process at December 1 were
completed. Of the 10,000 units entering the department, all were completed except 1,200 units that were 25% completed
as to conversion costs. Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for December.
181. Explain the concept of equivalent units. Give an example to validate your explanation.
182. Alexandra Company’s Molding Department opened on July 1. During July, 70,000 units were completed and
transferred out to the next department. On July 31, the 10,000 units that remained in inventory were 40% complete with
respect to conversion costs and 100% complete with respect to materials.
How many equivalent units of work did the Molding Department complete during July for materials and conversion
costs?
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183. Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,000
liters in beginning work in process inventory (30% complete). During the period 71,000 liters were completed. The
ending work in process was 5,000 liters (70% completed). What is the total equivalent units for direct materials (using the
FIFO method) if materials were added at the beginning of the process?
184. The cost per equivalent unit of direct materials and conversion in the Bottling Department of Beverages on Jolt
Company is $0.47 and $0.15, respectively. The equivalent units to be assigned costs are as follows:
Direct Materials
Conversion
Inventory in process, beginning of period
0
3,000
Started and completed during the period
52,000
52,000
Transferred out of Bottling (completed)
52,000
55,000
Inventory in process, end of period
3,500
2,100
Total units to be assigned costs
55,500
57,100
The beginning work in process inventory had a cost of $3,500. Determine the cost of completed and transferred-out
production, and the ending work in process inventory.
185. Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received
58,000 liters from the Purifying Department. During the period, the Bottling Department completed 56,000 liters,
including 4,000 liters of work in process at the beginning of the period. The ending work in process was 6,000 liters. How
many liters were started and completed during the period?
186. The estimated total factory overhead cost and total machine hours for Department 40 for the current year are
$250,000 and 56,250, respectively. During January, the first month of the current year, actual machine hours used totaled
5,100 and factory overhead cost incurred totaled $22,000.
a.
Determine the factory overhead rate based on machine hours.
b.
Journalize the entry to apply factory overhead to production in Department 40 for January.
c.
What is the balance of Factory Overhead—Department 40 at January 31?
d.
Does the balance of Factory Overhead—Department 40 at January 31 represent over- or
underapplied factory overhead?
Round total cost to the nearest dollar.
187. Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 8,000
liters in beginning work in process inventory (60% complete). During the period 70,000 liters were completed. The
ending work in process was 3,000 liters (60% completed). What are the total equivalent units for direct materials under
the FIFO method if materials were added at the beginning of the process?
188. The cost of direct materials transferred into the Bottling Department of Mountain Springs Water Company is
$27,225. The conversion cost for the period in the Bottling Department is $7,596. The total equivalent units for direct
materials and conversion are 60,500 liters and 63,300 liters, respectively. Determine the direct materials and conversion
cost per equivalent unit. Round answers to nearest cent.
189. Discuss how equivalent units are computed under the weighted average method.
190. The cost per equivalent unit of direct materials and conversion in the Bottling Department of Mountain Springs
Water Company is $0.45 and $0.12, respectively. The equivalent units to be assigned costs are as follows:
Direct Materials
Conversion
Inventory in process, beginning of period
0
3,500
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Started and completed during the period
57,000
57,000
Transferred out of Bottling (completed)
57,000
60,500
Inventory in process, end of period
3,500
1,800
Total units and costs to be assigned
60,500
62,300
The beginning work in process inventory had a cost of $2,200. Determine the cost of completed and transferred-out
production, and the ending work in process inventory.
191. Information for Nichols Manufacturing Company for the month of May is as follows:
Beginning work in process:
Cost of inventory at process,
May 1
$5,010
Units, 800
Direct materials, 100% completed
Conversion costs, 70% completed
Units started in May, 14,000
Costs charged to Work in Process during May :
Ending work in process inventory:
Direct materials costs, $57,400
Units, 1,500
Direct labor costs, $20,049
Direct materials, 100% completed
Factory overhead costs, $30,073
Conversion costs, 30% completed
Prepare a cost of production report for the month of May, using the FIFO method.
192. Stevens Company’s inventory on March 1 and the costs charged to Work in Process—Department B during March
are as follows:
Beginning work in process, 12,000 units, 60% completed
$ 62,400
From Department A, 55,000 units started this period
Direct materials added
115,500
Direct labor incurred
384,915
Factory overhead incurred
138,000
During March, all direct materials were transferred from Department A, the units in process at March 1 were completed,
and of the 55,000 units entering the department, all were completed except 6,000 units that were 70% completed.
Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for March. Round unit cost data to four decimal places and total cost to nearest cent.
193. The Bottling Department of Mountain Springs Water Company had 5,000 liters in beginning work in process
inventory (20% complete). During the period, 58,000 liters were completed. The ending work in process inventory was
3,000 liters (90% complete). What are the equivalent units for conversion costs under the FIFO method?
194. Fast-Flow Paints produces mixer base paint through a two-stage process, Mixing and Packaging. The following
events depict the movement of value into and out of production. Journalize the entry to record each event if appropriate; if
not, provide a short narrative reason as to why you choose not to journalize the action. Nelson, the production manager,
accepts an order to continue processing the current run of mixer base paint.
a.
Materials worth $27,000 are withdrawn from raw materials inventory. Of this amount,
$25,500 will be issued to the Mixing Department and the balance will be issued to the
Maintenance Department to be used on production line machines.
b.
Nelson determines that labor for the period is $12,500. Of this amount, $1,750 is for
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maintenance and indirect labor. The remainder is directly associated with mixing.
c.
Nelson, who is paid a salary but earns about $35/hour, spends one hour inspecting the
production line.
d.
The manufacturing overhead drivers for mixing are hours of mixer time at $575 per hour
and material movements from materials at $125 per movement. An inspection of the
machine timers reveals that a total of eight hours has been consumed in making this
product. An inspection of “stocking orders” indicates that only one material movement
was utilized to load the raw materials. (Note: All values have been journalized to
Factory Overhead so you need only apply them to the production run.)
e.
Within Fast-Flow, items are transferred between departments at a standard cost. This
production run has created 4,015 gallons of mixer base paint. This paint is transferred to
Packaging at a standard cost of $10.05 per gallon. Round calculation to nearest whole
dollar.
f.
Packaging draws $755 of materials for packaging of this production run.
g.
Packaging documents that 12 hours of direct labor at $10.25 per hour were consumed in
the packaging of this production run.
h.
Packaging uses a cost driver of direct labor hours to allocate manufacturing overhead at
the rate of $25 per hour.
i.
Packaging transfers 4,015 gallons of packaged goods to Finished Goods Inventory at a
standard cost of $10.34 per gallon. Round calculation to nearest whole dollar.
195. Eagle Co. manufactures bentwood chairs and tables. Wood for both products is steam-bent in the same process, but
different types of wood are used for each product. Thus, materials cost is identified separately to each product. One
production cycle uses 20 board feet. Labor cost is identified to the process as a whole, as is overhead cost. Data for the
month of July follow:
Chairs
Tables
Direct material cost per board foot
$3.60
$4.20
Number of parts formed per production
cycle (20 board feet)
10
8
Actual operating hours in July
120
380
Parts produced during July
4,000
9,000
Budgeted annual conversion cost:
Labor
$150,000
Utilities
125,000
Depreciation
65,000
Other overhead
50,000
Total
$390,000
Budgeted annual operating hours for
steam-bending
5,200
a.
Compute July’s predetermined rate for the steam-bending process.
b.
Compute July’s direct material costs for chairs and tables.
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c.
Compute conversion costs to be applied to chairs and tables in July.
d.
Journalize the following entries:
1.
Assignment of direct materials to chairs and tables
2.
Application of conversion costs to chairs and tables
3.
The transfer of completed chairs and tables to the Finishing Department. All of July’s
production was completed in July.
196. Kramer Company started its production operations on August 1. During August, the Printing Department completed
17,600 units. There were 4,400 units in ending inventory which were 80% complete with respect to materials and 10%
complete with respect to conversion costs. During August, the department accumulated materials costs of $45,408 and
conversion costs of $76,670.
Required:
a. Determine the cost of the goods transferred out.
b. What is the value of the ending inventory?
197. The inventory at June 1 and costs charged to Work in Process—Department 60 during June are as follows:
3,800 units, 80% completed ($25,000 materials, $35,400 conversion)
$ 60,400
Direct materials, 32,000 units
368,000
Direct labor
244,000
Factory overhead
188,000
Total cost to be accounted for
$860,400
During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on
June 1. On June 30, the inventory of work in process consisted of 4,600 units that were 40% completed. Inventories are
costed by the weighted average method and all materials are added at the beginning of the process.
Determine the following, presenting your computations:
a.
Equivalent units of production for conversion cost
b.
Conversion cost per equivalent unit and material cost per equivalent unit
c.
Total and unit cost of finished goods completed in the current period
d.
Total cost of work in process inventory at June 30
198. Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received
67,000 liters from the Purifying Department. During the period, the Bottling Department completed 65,000 liters,
including 3,000 liters of work in process at the beginning of the period. The ending work in process was 5,000 liters. How
many liters were started and completed during the period?
199. Job order manufacturing and process manufacturing are two major costing systems used in manufacturing. Briefly
contrast the characteristics of these two systems.
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