Chapter 18(3): Process Cost Systems
66.
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
67.
In a process cost system, the cost of completed production in Department A is transferred to Department B by
which of the following entries?
a.
debit Work in Process—Dept. B; credit Work in Process—Dept. A
b.
debit Work in Process—Dept. B; credit Finished Goods—Dept. A
c.
debit Work in Process—Dept. B; credit Cost of Goods Sold—Dept. A
d.
debit Finished Goods; credit Work in Process—Dept. B
68.
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
69.
A process cost system be appropriate for a
a.
natural gas refinery
b.
jet airplane builder
c.
catering business
d.
custom cabinet builder
70.
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.
the system emphasizes time periods rather than the time it takes to complete a job
71.
Which of the following would use a process costing system?
a.
a custom home builder
b.
a custom furniture manufacturer
c.
a wedding dress designer
d.
a lumber mill
72.
Which of the following is not a characteristic of a process cost system?
a.
manufacturing costs are grouped by departments
b.
the system may use several work in process accounts
c.
the system measures costs for each completed job
d.
the system allocates costs between completed and partially completed units within a department
73.
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
74.
The four steps necessary to complete a cost of production report in a process cost system are
1.
allocate costs to transferred and partially completed units
2.
determine the units to be assigned costs
3.
determine the cost per equivalent unit
4.
calculate equivalent units of production
5.
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
75.
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
76.
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
77.
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. What is the total conversion cost?
a. $218,000
b. $158,000
c. $323,000
d. $53,000
78.
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,
what was
the number of equivalent units of production for conversion costs for the period?
a.
7,300 units
b.
5,640 units
c.
6,700 units
d.
5,850 units
79.
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. What was the number of equivalent units of production
for
conversion costs for June if the first-in, first-out method is used to cost inventories?
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
Factory overhead
25,000
80.
All direct materials are placed in process at the beginning of production and the first-in, first-out method of
inventory costing is used. What is the total cost of the departmental work in process inventory at the end of
the
period (round unit cost calculations to four decimal places)?
a. $16,163
b. $21,432
c. $35,670
d. $28,935
81.
All direct materials are placed in process at the beginning of production and the first-in, first-out method of
inventory costing is used. What is the total cost of 3,600 units of beginning inventory which were completed
during
the period (round unit cost calculations to four decimal places)?
a. $62,206
b. $16,163
c. $40,000
d. $19,275
82.
All direct materials are placed in process at the beginning of production and the first-in, first-out method of
inventory costing is used. What is the total cost of the units started and completed during the period (round unit
cost
calculations to four decimal places)?
a. $211,200
b. $120,060
c. $190,275
d. $20,934
83.
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
Chapter 18(3): Process Cost Systems
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.
84.
The total conversion costs for the period were
a. $59,400
b. $49,500
c. $143,400
d. $9,900
85.
The total cost of units completed during the period were
a. $117,000
b. $143,400
c. $121,000
d. $127,450
86.
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 and conversion costs.
a.
575 units
b.
200 units
c.
1,000 units
d.
300 units
87.
The debits to Work in Process—Assembly Department for May, together with data concerning production, are as
follows:
May 1, work in process:
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
88.
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
89.
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. $2,607
90.
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. What is the total conversion cost?
a. $129,500
b. $154,600
c. $284,100
d. $238,600
91.
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
92.
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
Chapter 18(3): Process Cost Systems
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.
93.
The number of equivalent units of production for conversion costs for the period was
a. 29,600
b. 32,400
c. 32,400
d. 34,000
94.
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
Chapter 18(3): Process Cost Systems
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% complete) 7,000 units
95.
What is 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?
a.
68,000 units
b.
70,400 units
c.
66,200 units
d.
4,200 units
96.
What is the number of material 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?
a.
7,000 units
b.
68,000 units
c.
72,000 units
d.
76,000 units
97.
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
98.
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
Chapter 18(3): Process Cost Systems
Department B had 3,000 units in Work in Process that was 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.
99.
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
100.
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
Chapter 18(3): Process Cost Systems
The following unit data were assembled for the assembly process of the 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
101.
The number of equivalent units produced with respect to conversion costs is
a. 50,200
b. 48,000
c. 53,000
d. 47,200
102.
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
Chapter 18(3): Process Cost Systems
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
103.
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
c.
4,602 for direct materials and 4,802 for conversion costs
d.
4,902 for direct materials and 4,802 for conversion costs
104.
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
105.
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 two
cents, i.e., $2.22, 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
106.
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 only
107.
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
108.
Which of the following is not included in conversion costs?
a.
direct labor
b.
factory overhead
c.
indirect labor
d.
direct materials
109.
A form prepared periodically for each processing department summarizing the units for which the department is
accountable and the units to be assigned costs and the costs charged to the department and the allocation of these
costs is termed a
a.
factory overhead production report
b.
manufacturing cost report
c.
process cost report
d.
cost of production report
Chapter 18(3): Process Cost Systems
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
110.
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, what is the equivalent units for materials and conversion costs, respectively?
a. 14,000 and 12,160
b. 10,400 and 10,960
c. 14,000 and 13,600
d. 10,400 and 10,240
111.
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, what is the material and conversion cost per unit (to the nearest penny),
respectively.
a. $5.94 and $5.86
b. $5.94 and $6.38
c. $8.00 and $8.68
d. $9.84 and $9.58