Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
17) What amount of conversion costs are assigned to ending work–in–process for June?
A) $160,986.38
B) $137,993.63
C) $141,111.00
D) $188,148.00
E) $111,110.63
18) Process-costing systems separate costs into cost categories according to which factor(s)?
A) physical units
B) indirect labour
C) fixed and variable costs
D) standard costs
E) direct materials, conversion costs, and in some cases, transferred-in costs
19) Which one of the following methods focuses on the total costs and total equivalent units completed to
date?
A) equivalent-units method
B) first-in, first-out method
C) standard-costs method
D) weighted-average method
E) last-in, last-out method
20) When using the weighted-average method, work completed in beginning work–in-process and work
done during the current period are included in the
A) equivalent units.
B) process units.
C) qualitative units.
D) standard units.
E) normal units.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
Use the information below to answer the following question(s).
Carnival Furniture had 60,000 foam cushions in process at May 1 (70% converted) and 40,000 cushions in
process at May 31 (50% converted). All direct materials are added at the beginning of the production
process. During the month, 140,000 cushions were transferred to finished goods.
21) What is the equivalent units for materials costs for May using the weighted average method?
A) 180,000 cushions
B) 160,000 cushions
C) 140,000 cushions
D) 118,000 cushions
E) 123,000 cushions
22) What is the equivalent units for conversion costs for May using the weighted average method?
A) 180,000 cushions
B) 160,000 cushions
C) 140,000 cushions
D) 118,000 cushions
E) 123,000 cushions
23) How many cushions were started during May?
A) 60,000 cushions
B) 120,000 cushions
C) 140,000 cushions
D) 180,000 cushions
E) 223,000 cushions
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the
end of the process. The following data were presented for August
Work in process, beginning inventory
100,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period
300,000 units
Completed and transferred out
350,000 units
Work in process, ending inventory
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
24) Calculate the equivalent units for conversion costs using the weighted-average method.
A) 300,000 units
B) 350,000 units
C) 382,500 units
D) 450,920 units
E) 499,000 units
25) Calculate equivalent units for direct materials using the weighted-average method.
A) 100,000 units
B) 350,000 units
C) 400,000 units
D) 450,000 units
E) 499,000 units
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly
line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must
pass through the Assembly Department and the Testing Department. Direct materials are added at the
beginning of the production process. Conversion costs are allocated evenly throughout production.
Townsend Tractor uses weighted-average costing.
Data for the Assembly Department for April are:
Work in process, beginning inventory
400 units
Direct materials (100% complete)
Conversion costs (40% complete)
Units started during April
1,200 units
Work in process, ending inventory:
250 units
Direct materials (100% complete)
Conversion costs (80% complete)
Costs for April :
Work in process, beginning inventory:
Direct materials
$230,000
Conversion costs
$220,000
Direct materials costs added during June
$700,000
Conversion costs added during June
$1,175,000
26) What are the equivalent units for direct materials and conversion costs, respectively, for April?
A) 1,350 units; 1,350 units
B) 1,850 units; 1,690 units
C) 1,600 units; 1,550 units
D) 250 units; 200 units
E) 1,600 units; 1,350 units
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
27) What is the total amount credited to the Work-in–Process account during the month of April?
A) $1,875,000.00
B) $2,370,000.00
C) $1,999,687.50
D) $2,295,937.50
E) $450,000.00
28) What is the direct materials cost per equivalent unit during April?
A) $1,250.00
B) $1,241.94
C) $575.00
D) $581.25
E) $900.00
29) What is the conversion cost per equivalent unit in April?
A) $1,250.00
B) $900.00
C) $575.00
D) $581.25
E) $1,241.94
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
30) What amount of direct materials costs are assigned to the ending Work–in-Process account for April?
A) $248,387.10
B) $250,000.00
C) $143,750.00
D) $145,312.50
E) $116,250.00
31) What amount of conversion costs are assigned to the ending Work-in-Process account for April?
A) $143,750.00
B) $145,312.50
C) $180,000.00
D) $250,000.00
E) $116,250.00
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
32) Weighty Steel processes a single type of steel. For the current period the following information is
given:
Material Costs
Conversion Costs
Beginning Inventory
$4,500
$5,400
Started During the Current Period
32,000
78,200
Ending Inventory
All materials are added at the beginning of the production process. The beginning inventory was 40%
complete as to conversion, while the ending inventory was 30% completed for conversion purposes.
Weighty uses the weighted-average costing method.
What is the total cost assigned to the units completed and transferred this period?
A) $107,010
B) $109,440
C) $113,160
D) $120,100
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
33) The following production-cost worksheet has been prepared for the month of December for Ag
Chemical.
Production-Cost Worksheet
Weighted-Average Method of Process Costing
Ag Chemical
December, 20X1
Costs Totals Direct Materials Conversion
Work in process, beginning $36,000 $12,000 $24,000
Costs added during period 114,000 40,000 74,000
Total costs to account for $150,000 $52,000 $98,000
Divided by equivalent units 20,000 20,000 14,000
Equivalent unit costs $9.60 $2.60 $7.00
Assignment of costs:
Costs transferred out (12,000 × $9.60) $115,200
Work in process, ending
Direct materials (8,000 × $2.6) 20,800
Conversion (2,000 × $7) 14,000
Costs accounted for $150,000
Required:
a. Record costs of materials put into process for December.
b. Record conversion costs put into process in December.
c. Record goods transferred-out to finished goods for December.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
34) Scarborough Chemical placed 440,000 litres of direct materials into the mixing process. At the end of
the month, 20,000 litres were still in process, 30 percent converted as to labour and factory overhead. All
direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly
during the process. Scarborough Chemical uses weighted–average costing.
Required:
a. Determine the equivalent units in process for direct materials and conversion costs assuming there
was no beginning inventory.
b. Determine the equivalent units in process for direct materials and conversion costs assuming that a
beginning inventory of 24,000 litres of chemicals were 40 percent complete as to conversion costs prior to
the addition of the 440,000 litres.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
35) Calendar Time Company prints calendars. All direct materials are included at the inception of the
printing process. There were 20,000 units in beginning inventory with a direct material cost of $1,000 in
March. Direct materials totalled $26,000 for the month. work–in-process records revealed that 160,000
calendars were started in March and that a total of 144,000 were completed. Ending work–in-process units
are complete in respect to direct materials costs and contain no labour and overhead costs. The weighted–
average method is used by Calendar Time.
Required:
a. Determine the equivalent units of materials.
b. What are the material costs assigned to completed calendars?
c. What amount of materials is assigned to the ending work–in-process inventory?
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
36) Amana Woolens is a manufacturer of wool cloth. The information for February is as follows:
Beginning work-in-process 20,000 units
Units started 40,000 units
Units completed 50,000 units
Beginning work-in-process direct materials $12,000
Beginning work-in-process conversion $5,200
Direct materials added during month $60,000
Direct manufacturing labour during month $24,000
Factory overhead $10,000
Beginning work-in-process was half converted as to labour and overhead. Direct materials are added at
the beginning of the process. All conversion costs are incurred evenly throughout the process. Ending
work-in-process was 60 percent complete.
Required:
Using the weighted-average method determine the assignment of costs to units transferred-out and
ending inventory.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
37) Four Seasons Company makes snow blowers. Materials are added at the beginning of the process and
conversion costs are uniformly incurred. At the beginning of September the work–in-process is 40 percent
complete and at the end of the month it is 60 percent complete. Other data for the month include:
Beginning work-in-process inventory 1,600 units
Units started 2,000 units
Units placed in finished goods 3,200 units
Conversion costs $200,000
Cost of direct materials $260,000
Beginning work-in-process costs:
Materials $154,000
Conversion $82,080
Required:
a. Using the weighted-average method determine the assignment of costs to units transferred-out and
ending inventory.
b. Prepare journal entries to record transferring of materials to processing; and, the cost of the units
completed and transferred from processing to finished goods.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
38) List and describe the procedures required in process costing from summarizing the physical flow of
units through assigning the costs to the completed units and the units in ending inventory.
39) Marv and Vicki own and operate a vegetable canning plant. In recent years their business has grown
tremendously and at any point in time they may have 30 to 35 different vegetables being processed. Also,
during the peak summer months there are several thousand bushels of vegetables in some stage of being
processed at any one time. With the company‘s growth during the past few years the owners decided to
employ an accountant to provide cost estimations on each vegetable category and prepare monthly
financial statements. Although the accountant is doing exactly as instructed, Marv and Vicki are confused
about the monthly operating costs. Although they process an average of 50,000 canned units a month, the
monthly production report fluctuates wildly.
Required:
Explain how income can fluctuate when sales are relatively stable.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
17.4 Analyze weighted-average, FIFO, and standard-costing methods of inventory
valuation of cost of goods manufactured and transferred out.
1) The first-in, first-out process-costing method computes unit costs by confining equivalent units to work
only done during the current period.
2) Process-costing systems using standard costs usually accumulate actual costs separately from the
inventory accounts.
3) The cost of units completed can differ materially between the weighted average and the FIFO methods
of process costing.
4) A distinctive feature of the FIFO process costing method is that the work done on beginning inventory
before the current period is averaged with work done in the current period.
5) The first-in, first-out process-costing method assumes that units in beginning inventory are completed
during the current accounting period.
6) Activity-based costing has more applicability in a process-costing system than in a job-costing
environment.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
7) Standard costing is not possible in a firm that uses process costing.
8) Select the true statement regarding process costing.
A) The degree of completion for conversion costs in ending work–in-process depends on the amount of
direct materials used during the period.
B) Because it tracks beginning inventory’s actual costs of completion, the weighted-average method is the
most accurate process costing system.
C) Estimating the degree of completion is usually easier for conversion costs than for transferred-in costs.
D) Estimating the degree of completion is usually easier for direct materials than for conversion costs.
E) The accuracy of the completion percentages depends on the accounting system used.
9) The first-in, first-out method computes unit costs by
A) dividing total units by units completed this period.
B) confining equivalent units to the work completed during the current period only.
C) the standard-costing method.
D) separately identifying the conversion costs of beginning and ending inventories.
E) adding opening inventory units to work-in-process units and dividing by total cost.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
Use the information below to answer the following question(s).
Hollywood North Magic, a cosmetic manufacturer, began operations in January. During the first month
of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.
During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the
month. Ending work-in-process was 45% completed. All inputs are added evenly throughout the
production process.
10) Calculate the equivalent units for conversion costs in January using the FIFO method.
A) 24,000 litres
B) 26,700 litres
C) 30,000 litres
D) 36,000 litres
E) 39,000 litres
11) What is the materials cost per unit in January using the FIFO method?
A) $2.00
B) $1.67
C) $2.25
D) $2.50
E) $3.00
12) Which of the following items is not a component of “total costs to be accounted for in a given
department’s operations?”
A) direct manufacturing labour used in the given department
B) the cost of materials requisitioned and used by the given department
C) transferred-in costs from the prior processing department
D) transferred-out costs to the next department
E) conversion costs
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
13) Bag Company had a beginning inventory of 4,000 bags with costs of $18,000 on January 1. The direct
materials were complete and all overhead had been assigned; however, only 40 percent of direct
manufacturing labour was added in the prior period. Another 20,000 units were started and completed
during the current period. Unit costs are as follows: materials, $8.00; labour, $9.00; and overhead, $5.00.
What is the total cost of goods transferred out using the FIFO method?
A) $440,000
B) $472,400
C) $479,600
D) $491,600
E) $519,500
Use the information below to answer the following question(s).
Canadian Oil Company manufactures cooking oils. All direct materials are added at the beginning of the
production process. The company currently uses the FIFO method. Data for the month of July is listed
below.
Production data:
Beginning work-in-process
100,000 units
Units started during the period
200,000 units
Completed and transferred out
270,000 units
Manufacturing cost:
Beginning work-in-process
$176,000
Direct materials used
$244,000
14) How many units were started and completed with respect to direct materials during the month?
A) 170,000 units
B) 200,000 units
C) 270,000 units
D) 300,000 units
E) 330,000 units
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
15) What is the amount of direct materials assigned to ending work–in-process?
A) $63,000
B) $42,000
C) $36,600
D) $21,050
E) $17,000
16) What is the amount of goods transferred-out during the month assuming no labour or conversion
costs?
A) $398,950
B) $383,400
C) $378,000
D) $357,000
E) $391,000
17) Unit costs of the weighted-average and FIFO methods will differ significantly when
A) direct materials or conversion costs per unit vary little from period to period.
B) physical inventory levels of work–in-process are small in relation to the number of units transferred
out.
C) direct materials or conversion cost per unit vary greatly and physical inventory levels of work–in–
process are large relative to the number of units transferred out.
D) conversion costs per unit vary greatly and physical inventory levels of work–in-process are small
relative to the number of units transferred out.
E) direct materials or conversion costs per unit are similar and physical inventory of work–in-process are
small relative to the number of units transferred in.
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the
end of the process. The following data were presented for August
Work in process, beginning inventory
100,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period
300,000 units
Completed and transferred out
350,000 units
Work in process, ending inventory
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
18) Calculate the equivalent units for conversion costs using the weighted-average method.
A) 300,000 units
B) 350,000 units
C) 382,500 units
D) 450,920 units
E) 499,000 units
19) How many units must be accounted for during the period, assuming a FIFO cost flow assumption?
A) 450,000 units
B) 400,000 units
C) 359,000 units
D) 300,000 units
E) 275,000 units
Cost Accounting: A Managerial Emphasis, 6e
Chapter 17 – Process Costing
20) How many units remain in ending work–in-process, assuming a FIFO cost flow assumption?
A) 200,000 units
B) 150,000 units
C) 100,000 units
D) 50,000 units
E) 25,000 units
21) Calculate equivalent units for conversion costs using the FIFO method.
A) 401,500 units
B) 350,000 units
C) 300,000 units
D) 292,500 units
E) 170,000 units
22) Calculate equivalent units for direct materials using the FIFO method.
A) 100,000 units
B) 350,000 units
C) 400,000 units
D) 450,000 units
E) 515,000 units