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Chapter 04 Process Costing Answer Key
True / False Questions
1. 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:
2. In a process costing system, overhead costs are traced to units of product as they are
incurred.
3. A process cost system would be used to account for the cost of manufacturing an oil
tanker.
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4. A process costing system would be best suited for production of a large quantity of a
homogeneous product.
5. In process costing, costs are accumulated in processing departments, rather than by job.
6. Process costing would be used by companies producing the following items: bricks, bolts,
pharmaceutical items, natural gas, and electricity.
7. The job cost sheet is used in both job-order and process costing.
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8. In process costing, the equivalent units computed for materials is generally the same as that
computed for direct labor.
9. The weighted-average method of process costing can only be used if materials are added at
the beginning of the production process.
10. Under the weighted-average method, the cost of materials in the beginning work in
process inventory is not used in the computation of the cost per equivalent unit for materials.
11. When computing the cost per equivalent unit, it is not necessary to consider the
percentage completion of the units in beginning inventory under the weighted-average
method.
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12. When assigning costs to partially completed units in the ending work in process inventory,
it is not necessary to consider the percentage completion of the units under the weighted-
average method.
Multiple Choice Questions
13. In a process costing system, manufacturing overhead applied is usually recorded as a debit
to:
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14. A company has two processing departments: A and B. Which of the following entries or
sets of journal entries would be used to record the transfer between processing departments
and from the final processing department to finished goods?
15. A process costing system:
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16. A company should use process costing, rather than job order costing, if:
17. Which of the following characteristics applies to process costing, but does not apply to job
order costing?
18. Equivalent units for a process costing system using the weighted-average method would
be equal to:
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19. The cost of beginning inventory under the weighted-average method is:
20. The Nichols Company uses the weighted-average method in its process costing system.
The company recorded 29,500 equivalent units for conversion costs for November in a
particular department. There were 6,000 units in the ending work in process inventory on
November 30, 75% complete with respect to conversion costs. The November 1 work in
process inventory consisted of 8,000 units, 50% complete with respect to conversion costs. A
total of 25,000 units were completed and transferred out of the department during the month.
The number of units started during November in the department was:
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21. The Assembly Department started the month with 14,000 units in its beginning work in
process inventory. An additional 296,000 units were transferred in from the prior department
during the month to begin processing in the Assembly Department. There were 14,000 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?
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22. Diston Company uses the weighted-average method in its process costing system. The
first processing department, the Welding Department, started the month with 18,000 units in
its beginning work in process inventory that were 30% complete with respect to conversion
costs. The conversion cost in this beginning work in process inventory was $44,820. An
additional 90,000 units were started into production during the month. There were 21,000
units in the ending work in process inventory of the Welding Department that were 10%
complete with respect to conversion costs. A total of $677,970 in conversion costs were
incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to
three decimal places.)
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23. Loll Company uses the weighted-average method in its process costing system. Operating
data for the first processing department for the month of June appear below:
According to the company’s records, the conversion cost in beginning work in process
inventory was $46,915 at the beginning of June. Additional conversion costs of $825,183
were incurred in the department during the month.
What was the cost per equivalent unit for conversion costs for the month? (Round off to three
decimal places.)
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24. The following information pertains to Yap Company’s Grinding Department for the month
of April:
All materials are added at the beginning of the process. Using the weighted-average method,
the cost per equivalent unit for materials is closest to:
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25. Hardouin Company uses the weighted-average method in its process costing system. The
first processing department, the Welding Department, started the month with 22,000 units in
its beginning work in process inventory that were 20% complete with respect to conversion
costs. The conversion cost in this beginning work in process inventory was $23,320. An
additional 97,000 units were started into production during the month and 101,000 units were
completed in the Welding Department and transferred to the next processing department.
There were 18,000 units in the ending work in process inventory of the Welding Department
that were 40% complete with respect to conversion costs. A total of $529,380 in conversion
costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to
three decimal places.)
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26. Parmentier Company uses the weighted-average method in its process costing system. The
Molding Department is the second department in its production process. The data below
summarize the department’s operations in January.
The accounting records indicate that the conversion cost that had been assigned to beginning
work in process inventory was $5,096 and a total of $87,668 in conversion costs were
incurred in the department during January.
What was the cost per equivalent unit for conversion costs for January in the Molding
Department? (Round off to three decimal places.)
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27. Scheney Company uses the weighted-average method in its process costing system. The
company’s work in process inventory on March 31 consisted of 20,000 units. The units in the
ending work in process inventory were 100% complete with respect to materials and 70%
complete with respect to labor and overhead. If the cost per equivalent unit for March was
$2.50 for materials and $4.75 for labor and overhead, the total cost in the March 31 work in
process inventory was:
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28. The following data were taken from the accounting records of the Hazel Corporation
which uses the weighted-average method in its process costing system:
The equivalent units for conversion costs was:
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29. Borwan Company 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 70% complete with respect to conversion costs. An additional 69,000
units were transferred in from the prior department during the month to begin processing in
the Assembly Department. There were 5,000 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?
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30. Jastak Company uses the weighted-average method in its process costing system.
Operating data for the Painting Department for the month of April appear below:
What were the equivalent units for conversion costs in the Painting Department for April?
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31. Fayard Corporation uses the weighted-average method in its process costing system. The
Assembly Department started the month with 5,000 units in its beginning work in process
inventory that were 70% complete with respect to conversion costs. An additional 67,000
units were transferred in from the prior department during the month to begin processing in
the Assembly Department. During the month 63,000 units were completed in the Assembly
Department and transferred to the next processing department. There were 9,000 units in the
ending work in process inventory of the Assembly Department that were 50% complete with
respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the
month?
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32. Nguyen Corporation uses the weighted-average method in its process costing system.
Operating data for the Lubricating Department for the month of October appear below:
What were the equivalent units for conversion costs in the Lubricating Department for
October?
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33. Sanchez Corporation uses the weighted-average method in its process costing system. The
Fitting Department is the second department in its production process. The data below
summarize the department’s operations in March.
The Fitting Department’s cost per equivalent unit for conversion cost for March was $8.66.
How much conversion cost was assigned to the units transferred out of the Fitting Department
during March?