39. Refer to Figure 5-7. Units started and completed in Corn Corporation’s second department during June
would be
a.
48,000.
b.
37,000.
c.
29,000.
d.
55,000.
Figure 5-9
The following information is available for Department Z for the month of July:
Units
Cost
Work in progress, July 1 (70% complete)
5,000
Direct materials
£ 6,000
Direct labour
3,000
Manufacturing overhead
__4,000
Total work in progress, July 1
£13,000
Started in production during July
20,000
Costs added:
Direct materials
£18,000
Direct labour
8,000
Manufacturing overhead
_10,000
Total costs added during July
£36,000
Work in progress, July 31, (80% complete)
2,000
Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
40. Refer to Figure 5-9. Department Z’s cost per equivalent unit of production for conversion costs using
the FIFO method would be
a.
£1.18.
b.
£1.02.
c.
£0.85.
d.
£0.73.
Units started and completed (20,000 – 2,000)
(5,000 30%)
Units completed (8,000 + 40,000 – 11,000)
37,000
Less: Units in beginning work in progress
_8,000
Units started and completed
41. Refer to Figure 5-9. Department Z’s cost of goods transferred out using the FIFO method would be
a.
£45,775.
b.
£45,540.
c.
£44,500.
d.
£40,250.
42. What system would a manufacturer of unique special orders or batch processes most likely use to
accumulate costs?
a.
process costing
b.
contract costing
c.
variable costing
d.
job-order costing
43. Unit cost of materials for a department using the FIFO method of process costing is found by taking
the total cost of materials issued to the department during the year divided by
a.
units in process.
b.
units started and completed.
c.
total units manufactured.
d.
equivalent units manufactured.
Figure 5-10
The following information is available:
Units in process at the beginning of the month
2,000
Units in process at the end of the month
4,000
Units started during the month
30,000
Materials are added at the beginning of the process.
44. Refer to Figure 5-10. Beginning and ending units were 60 per cent complete as to conversion costs.
What is the number of units started and completed?
a.
30,000 units
b.
26,000 units
c.
36,000 units
d.
28,000 units
45. Refer to Figure 5-10. Beginning and ending units were 60 per cent converted. How many equivalent
units for materials would there be using the FIFO method?
a.
36,000 units
b.
34,000 units
c.
30,000 units
d.
29,200 units
Beginning WIP (2,000 0)
Started and completed (26,000 1)
Ending WIP (4,000 1)
Figure 5-11
Gill Ltd. adds raw materials to production at the beginning of the process in the Assembly Department.
Materials data for this department for March 2004 are as follows:
Costs
Units
Materials
Conversion
Work in progress, March 1
25,000
£ 68,750
£167,650
Started during March
100,000
300,000
903,350
Work in progress, March 31
10,000
Beginning inventory was 70 per cent complete. Ending inventory was 40 per cent complete.
46. Refer to Figure 5-11. How many equivalent units for materials would there be for Gill Ltd. in March
using the FIFO method?
a.
100,000 units
b.
110,000 units
c.
125,000 units
d.
119,000 units
47. Refer to Figure 5-11. How many equivalent units for conversion costs would there be for Gill Ltd. in
March using the FIFO method?
a.
100,000 units
b.
111,500 units
c.
125,000 units
d.
101,500 units
Beginning WIP (25,000 0.30)
Started and completed (90,000 1)
Ending WIP (10,000 0.40)
48. If beginning inventory contained 2,000 units of product that were judged to be 40 per cent complete as
to labour, the equivalent units of production for labour during the current period under the FIFO
method for these 2,000 units are
a.
2,000 units.
b.
800 units.
c.
1,200 units.
d.
400 units.
Beginning WIP (25,000 0)
Started and completed (90,000 1)
Ending WIP (10,000 1)
49. The following information pertains to Jones Company:
Units
Work-in-progress inventory, March 1 (30% complete)
20,000
Units transferred in
50,000
Work-in-progress inventory, March 31 (60% complete)
16,000
Materials are added at the start of the progress.
How many equivalent units for conversion costs would there be using the FIFO method?
a.
49,600 units
b.
70,000 units
c.
50,000 units
d.
57,600 units
Beginning WIP (20,000 0.70)
Started and completed (34,000 1)
Ending WIP (16,000 0.60)
50. Lee Company began making lipstick in October 2011 using a single-step process. Lee incurred
£42,000 for materials and £48,640 for conversion during the month. There were 21,000 cases of
lipstick started in October and 3,000 cases unfinished (40 per cent complete) at the end of the period.
All materials were added at the beginning of the production process.
What is the unit cost for materials for Lee using the FIFO method?
a.
£4.53
b.
£2.00
c.
£2.03
d.
none of these
51. Beginning inventory consisted of 1,000 units with costs of £21,000. All materials and 60 per cent of
labour and overhead were added in the prior period. In addition, another 8,000 units were started and
completed. Unit costs are materials, £6.00; labour, £15.00; overhead, £9.00. What is the total cost of
goods transferred out using FIFO?
a.
£240,000
b.
£270,000
c.
£262,200
d.
£270,600
PROBLEM
1. Star, Inc., manufactures a product that passes through two processes: mixing and packaging. All
manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows:
Work in progress, June 1:
Units (30% complete)
15,000
Direct materials
£4,000
Direct labour
£3,000
Overhead
£2,376
During June, 100,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
Direct materials
£50,000
Direct labour
30,000
Overhead
12,000
At June 30, 8,000 units that were 70 per cent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
Required:
a.
Determine equivalent units of production for June.
b.
Determine June’s total costs to account for.
c.
Determine total cost per equivalent unit of production.
d.
Determine the cost of goods transferred to the packaging department.
e.
Determine the cost of June’s ending work in progress for the mixing department.
105,600
Units accounted for:
Units completed
Total units accounted for
Beginning work in progress:
Beginning balance
labour (400 £15)
Overhead (400 £9)
Started and completed (8,000 £30)
Total
2. Royal, Inc., manufactures products that pass through two or more processes. The company uses the
weighted average method to compute unit costs. During April, equivalent units were computed as
follows:
Materials
Conversion Cost
Units completed
90,000
90,000
Units in EWIP Fraction complete:
Materials (4,000 100%)
4,000
Conversion (4,000 30%)
______
_1,200
Equivalent units of output
94,000
91,200
The unit cost was computed as follows:
Materials
£5.00
Conversion cost
_3.00
Total cost per unit
£8.00
Required:
a.
Determine the cost of the goods transferred out.
b.
Determine the cost of ending work in progress.
Cost of goods transferred out = £8.00 90,000 = £720,000
Materials (4,000 £5.00)
Conversion (1,200 £3.00)
Total cost
3. Barr, Inc., manufactures a product that passes through two processes: mixing and packaging. All
manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows:
b.
£101,376
Costs to account for:
Beginning work in progress
(£4,000 + £3,000 + £2,376)
Costs added
(£50,000 + £30,000 + £12,000)
Total costs to account for
£0.96 (£101,376/105,600)
£96,000 (100,000 £0.96)
£5,376 (5,600 £0.96)
Work in progress, June 1
Units (60% complete)
5,000
Direct materials
£20,000
Direct labour
£24,000
Overhead
£4,000
During June, 80,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
Direct materials
£180,000
Direct labour
200,000
Overhead
59,200
At June 30, 12,000 units that were 10 per cent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
Required:
a.
Determine equivalent units of production for June.
b.
Determine June’s total costs to account for.
c.
Determine total cost per equivalent unit of production.
d.
Determine the cost of goods transferred to the packaging department.
e.
Determine the cost of June’s ending work in progress for the mixing department.
81,200
Units accounted for:
Units completed
Units in EWIP (10% complete)
Total units accounted for
b.
£487,200
Costs to account for:
Beginning work in progress
(£20,000 + £24,000 + £4,000)
Incurred during the period
(£180,000 + £200,000 + £59,200)
Total costs to account for
£6.00 (£487,200/81,200)
£480,000 (80,000 £6.00)
£7,200 (1,200 £6.00)
4. Davidson Company manufactures a product that passes through two processes. The following
information is available for the first department for October.
All materials are added at the beginning of the process.
Beginning work in progress consisted of 20,000 units that were 80 per cent complete with respect to
conversion.
Ending work in progress consisted of 15,000 units that were 40 per cent complete with respect to
conversion.
During the month, 90,000 units were started in process.
Required:
a.
Prepare a physical flow schedule.
b.
Compute equivalent units using the FIFO method.
5. Toyco manufactures a wooden toy product in a two-stage production process. Wood material is
brought into the Forming Department where it is shaped. Shaped products are then moved to the
Finishing Department where metal is added. The following data is given for the Forming Department
for April:
Units for April:
Work in progress, beginning inventory April 1
300 units
Physical flow schedule:
Units to account for:
Units in beginning work in progress
Total units to account for
Units accounted for:
Units completed and transferred out:
From beginning work in progress
Total units accounted for
Units started and completed
Units in BWIP Fraction complete:
Units in EWIP Fraction complete:
Materials (15,000 100%)
Equivalent units of output
Direct materials (100% complete)
Conversion (40% complete)
Units started in April:
2,200 units
Work in progress, ending inventory April 30
500 units
Direct materials (100% complete)
Conversion (25%)
Costs for April:
Work in progress, beginning inventory
Direct materials
£7,100
Conversion
£4,525
Costs added during April:
Direct materials
£70,400
Conversion
Round to two decimal places.
Required:
a.
How many units were transferred to Finishing?
b.
How many units were started and completed during April?
c.
How many equivalent units of conversion does it take to complete the beginning inventory in
the current period?
d.
What is the FIFO cost assigned to the ending inventory?
e.
What is the FIFO cost assigned to the units transferred out?
f.
Show the T-account for the forming process.
Forming
(Weighted Average)
a.
2,500 – 500 = 2,000
b.
Units started and completed = Units transferred out – Beginning inventory
Transferred out = 300 + 2200 – 500 = 2000
Started and completed = 2000 – 300 = 1700
300 – 120 = 180 (60%)
(500 32*) + (125 20*) = 18,500
* calculation of cost per unit
Equivalent units in process:
Units completed
Add: Eq. units in end. inv.
Equivalent units in process
Less: Eq. units in beg. inv.
Equivalent units manufactured
6. Urban Company manufactures a product through a continuous single-step process. All materials are
added at the beginning of processing. Production and cost data for the company for February 2011 are
as follows:
Production data:
In process, beginning of month (20% converted)
1,000 units
Started during February
5,000 units
Completed and transferred to finished goods
4,500 units
In process, end of month (60% converted)
1,500 units
Manufacturing costs:
Work in progress, beginning
£14,730
Materials
£45,000
Direct labour cost
£102,960
Factory overhead cost
£51,480
Required:
Prepare a cost of production report for February 2011. Use FIFO process costing.
Summary of units in process:
Beginning
Units started
In process
Completed
Ending
Equivalent units in process:
Units completed
Add: Eq. units in end. inv.
Equivalent units in process
Less: Eq. units in beg. inv.
Equivalent units manufactured
Total costs to be accounted for:
Beginning WIP
Total costs to be accounted for:
Beginning WIP
Current costs
£70,400
£40,100
Total costs in process
Costs per equivalent unit
