1. When materials are purchased in a process costing system, a materials account is debited
with the cost of the materials.
2. Costs are accumulated by department in a process costing system.
3. The following journal entry would be made in a processing costing system when units
that have been completed with respect to the work done in Processing Department Z are
transferred from Processing Department Z to Processing Department Y:
Work in Process, Department Z XXX
Work in Process, Department Y XXX
4. The units in beginning work in process inventory plus the units in ending work in process
inventory must equal the units transferred out of the department plus the units started into
production.
5. In order to equitably allocate costs in a process costing system, dissimilar products are
restated in terms of equivalent units by weighting the number of units produced by their market
values.
6. Under the weighted-average method, the equivalent units used to compute the unit costs
of ending inventories relate only to work done during the current period.
7. In calculating cost per equivalent unit under the weighted-average method, prior period
costs are not combined with current period costs.
8. Under the weighted-average method of process costing, costs from the prior period are
averaged with those of the current period in computing unit costs.
9. Using process costing, it is necessary to consider the stage of completion of the units
when assigning conversion cost to partially completed units in the ending work in process
inventory.
10. The “costs accounted for” portion of the cost reconciliation report includes the cost of
beginning work in process inventory and the cost of units transferred out.
11. The “costs to be accounted for” portion of the cost reconciliation report includes the cost
of ending work in process inventory and the costs added during the period.
12. The “costs accounted for” portion of the cost reconciliation report includes the cost of
beginning work in process inventory and the costs added to production during the period.
13. The “costs to be accounted for” portion of the cost reconciliation report includes the cost
of beginning work in process inventory and the costs added during the period.
14. Process costing is used in those situations where many different products or services are
produced each period to customer specifications.
15. A job-order cost system would be used to account for the cost of building an oil tanker.
16. Both job-order and process costing systems use averaging to compute unit product costs.
17. Pulo Corporation uses a weighted-average process costing system. The company has two
processing departments. Production starts in the Assembly Department and is completed in the
Finishing Department. The units completed and transferred out of the Assembly department
during April will become the:
4-8
18. Which of the following journal entries would be used to record application of
manufacturing overhead to work in process in a process costing system with two processing
departments, Department A and Department B?
A) Manufacturing Overhead XXX
Work in Process-Department A XXX
Work in Process-Department B XXX
B) Work in Process-Department A XXX
Work in Process-Department B XXX
Manufacturing Overhead XXX
C) Work in Process-Department B XXX
Work in Process-Department A XXX
Manufacturing Overhead XXX
D) Work in Process-Department A XXX
Work in Process-Department B XXX
Manufacturing Overhead XXX
19. Which of the following statements about a process costing system is incorrect?
20. Barraza Corporation uses a weighted-average process costing system. Barraza has two
direct materials. One of these materials is added at the beginning of the production process. The
other material is added when processing is 50% complete. When will the equivalent units of
production for these two materials be equal?
21. When the weighted-average method of process costing is used, a department’s
equivalent units are computed by:
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22. Which of the following are needed to compute the cost per equivalent unit for materials
under the weighted-average method of process costing?
Material cost assigned to beginning work in process Material cost added to
production during the current period
A) Yes Yes
B) No Yes
C) Yes No
D) No No
23. For which situation(s) below would an organization be more likely to use a process
costing system of rather than a job-order costing system?
24. Which of the following companies would be most likely to use a process costing system?
25. Which of the following companies would be most likely to use a process costing system?
26. The Assembly Department started the month with 35,000 units in its beginning work in
process inventory. An additional 472,000 units were transferred in from the prior department
during the month to begin processing in the Assembly Department. There were 34,000 units in
the ending work in process inventory of the Assembly Department. How many units were
transferred to the next processing department during the month?
27. Health Beverage Corporation uses a process costing system to collect costs related to
the production of its celery flavored cola. The cola is first processed in a Mixing Department at
Health and is then transferred out and finished up in the Bottling Department. The finished cases
of cola are then transferred to Finished Goods Inventory. The following information relates to
Health’s two departments for the month of January:
Mixing Bottling
Cases of cola in work in process, January 1 10,000 3,000
Cases of cola completed/transferred out during January 77,000 ?
Cases of cola in work in process, January 31 4,000 8,000
How many cases of cola were completed and transferred to Finished Goods Inventory during
January?
28. Fabian Corporation uses the weighted-average method in its process costing system. The
Assembly Department started the month with 9,000 units in its beginning work in process
inventory that were 70% complete with respect to conversion costs. An additional 90,000 units
were transferred in from the prior department during the month to begin processing in the
Assembly Department. During the month 87,000 units were completed in the Assembly
Department and transferred to the next processing department. There were 12,000 units in the
ending work in process inventory of the Assembly Department that were 20% complete with
respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?
29. Jawson Corporation uses the weighted-average method in its process costing system.
Operating data for the Painting Department for the month of April appear below:
Units Percent Complete with Respect to Conversion
Beginning work in process inventory 6,300 10%
Transferred in from the prior department during April 65,600
Ending work in process inventory 4,600 70%
What were the equivalent units for conversion costs in the Painting Department for April?
30. Narver Corporation uses the weighted-average method in its process costing system.
Operating data for the Lubricating Department for the month of October appear below:
Units Percent Complete with Respect to Conversion
Beginning work in process inventory 6,600 60%
Transferred in from the prior department during October 40,100
Completed and transferred to the next department during October
37,100
Ending work in process inventory 9,600 80%
What were the equivalent units for conversion costs in the Lubricating Department for October?
31. Baker Corporation uses the weighted-average method in its process costing system. The
Assembly Department started the month with 8,000 units in its beginning work in process
inventory that were 90% complete with respect to conversion costs. An additional 95,000 units
were transferred in from the prior department during the month to begin processing in the
Assembly Department. There were 11,000 units in the ending work in process inventory of the
Assembly Department that were 90% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?
32. Larner Corporation uses the weighted-average method in its process costing system.
Operating data for the first processing department for the month of June appear below:
Units Percent Complete with Respect to Conversion
Beginning work in process inventory 24,000 40%
Started into production during June 86,000
Ending work in process inventory 19,000 20%
According to the company’s records, the conversion cost in beginning work in process inventory
was $68,064 at the beginning of June. Additional conversion costs of $585,324 were incurred in
the department during the month.
The cost per equivalent unit for conversion costs for the month is closest to: