Chapter 6 – Process Costing
115. Refer to Figure 6-2. Units started in the second department during June for Bing Corporation would be
a.
60,000.
b.
55,000.
c.
73,000.
d.
48,000.
Units started = Number of units transferred in = 60,000
116. Refer to Figure 6-2. Units completed in the second department during June for Bing Corporation would be
a.
48,000.
b.
52,000.
c.
49,000.
d.
55,000.
117. Refer to Figure 6-2. Units started and completed in Bing Corporation’s second department during June would be
a.
48,000.
b.
37,000.
c.
47,000.
d.
55,000.
118. In process manufacturing, the manufacturing input categories include
a.
only work in process.
b.
only cost of goods sold.
c.
only raw materials.
d.
transferred-in materials, materials added, and conversion costs.
119. The cost of a department’s transferred-in goods is the cost of
a.
its materials, labor, and overhead.
b.
the goods transferred out as computed in the prior department.
c.
its materials and conversion costs.
d.
None of these.
120. Assuming that there is a one–to–one relationship between the output measures, the units started in a subsequent
department are
Chapter 6 – Process Costing
a.
equal to the equivalent units plus the materials added.
b.
equal to the equivalent units of that department.
c.
equal to the materials added plus conversion costs.
d.
equal to the units transferred out from the prior department.
121. Nonuniform manufacturing inputs affect
a.
the calculation of equivalent units, unit cost, and valuation of ending work in process.
b.
only the calculation of equivalent units, and valuation of ending work in process.
c.
only the valuation of ending work in process.
d.
only the manufacturing outputs.
a
122. Process accounting’s solution for nonuniform manufacturing inputs is
a.
calculate equivalent units for each category of manufacturing input.
b.
calculate total unit cost as if there were uniform manufacturing inputs.
c.
to use the weighted average method.
d.
to use FIFO method or the weighted average method.
a
Figure 6-1.
The following information is available for Department Z for the month of July:
Units
Cost
Work in process, July 1 (70% complete)
2,000
Direct materials
$ 6,000
Direct labor
3,000
Manufacturing overhead
4,000
Total work in process, July 1
$13,000
Started in production during July
20,000
Costs added:
Direct materials
$18,000
Direct labor
8,000
Manufacturing overhead
10,000
Total costs added during July
$36,000
Work in process, July 31, (80% complete)
2,000
Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
123. Refer to Figure 6-1. Department Z’s cost per equivalent unit of production for materials using the FIFO method
would be
a.
$1.20.
b.
$1.04.
c.
$0.96.
d.
$0.90.
Chapter 6 – Process Costing
124. Refer to Figure 6-1. 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.
125. Refer to Figure 6-1. Department Z’s cost of goods transferred out using the FIFO method would be
a.
$40,250.
b.
$45,540.
c.
$44,500.
d.
$45,775.
Materials:
Conversion:
Chapter 6 – Process Costing
126. Refer to Figure 6-1. Department Z’s cost of ending work in process using the FIFO method would be
a.
$3,960.
b.
$3,552.
c.
$3,500.
d.
$3,160.
Materials:
Units started and completed (20,000 − 2,000)
Units completed from beginning work in process
Units in ending work in process (2,000 × 100%)
Total equivalent units
Cost per equivalent unit ($18,000 / 20,000)
Conversion:
Units started and completed (20,000 − 2,000)
Units completed from beginning work in process
(5,000 × 30%)
Units in ending work in process (2,000 × 80%)
Total equivalent units
Cost per equivalent unit ($18,000 / 21,100)
Ending work in process:
Materials (2,000 × $0.90)
Conversion (1,600 × $0.85)
Cost of ending work in process
127. Under the FIFO production costing method, the two categories of completed units used to compute the total
cost of units completed during a period are:
a.
beginning work-in-process units and units started.
b.
units started and completed and ending work-in-process units.
c.
beginning work-in-process units and units started and completed during the current period.
d.
other categories.
c
128. The total associated manufacturing costs for beginning work in process units under the FIFO method are:
a.
the sum of the prior-period costs plus the costs incurred in the current period to finish the units in beginning
work in process
b.
the cost of ending work–in-process units.
c.
the cost of units started and completed.
d.
conversion costs.
a
Beginning work in process:
From prior period ($6,000 + $3,000 + $4,000)
Current period—conversion (1,500 × $0.85)
Cost of units started and completed (18,000 × $1.75)
Chapter 6 – Process Costing
129. Information concerning Department A of Ali Company for the month of June is as follows:
Materials
Units
Costs
Work in process, beginning of month
20,000
$14,250
Started in June
85,000
$66,600
Units completed
90,000
Work in process, end of month
15,000
All materials are added at the beginning of the process. Using the first-in, first-out method, the equivalent units for
materials would be
a.
105,000.
b.
85,000.
c.
90,000.
d.
110,000.
(all had 100% of materials)
Units started and completed during the month
(85,000 started − 15,000 in ending WIP)
70,000
Units in process, June 30 with all materials
15,000
Equivalent production for materials in period
85,000
130. Information concerning Department A of Ali Company for the month of June is as follows:
Materials
Units
Costs
Work in process, beginning of month
20,000
$14,250
Started in June
85,000
$66,600
Units completed
90,000
Work in process, end of month
15,000
All materials are added at the beginning of the process. Using the first-in, first-out method, the cost (rounded to two
places) per equivalent unit for materials is:
a.
$0.74.
b.
$0.90.
c.
$0.77.
d.
$0.78.
Materials cost:
Added during June
$66,600
Total materials cost for period
$66,600
$66,600 / 85,000 (equivalent units) = cost per equivalent unit
131. Which of the following methods considers the percentage of completion of beginning work-in-process?
a.
FIFO
b.
weighted average
c.
both weighted average and FIFO
d.
neither FIFO nor weighted average
a
Chapter 6 – Process Costing
132. Montgomery Corporation produces boxes of cookies that go through three departments: Mixing, Cooking and
Packaging. During April, Montgomery produced 250,000 boxes of cookies with the following costs:
Mixing department
Cooking department
Packaging
department
Direct materials
$325,000
$110,000
$90,000
Direct labor
65,000
35,000
80,000
Applied Overhead
85,000
30,000
95,000
Required:
A. Calculate the costs transferred out of each department.
B. Prepare journal entries that reflect these cost transfers.
Mixing department
Packaging department
Direct materials
$325,000
Direct labor
65,000
Applied Overhead
85,000
Total cost
$475,000
Work in Process-Cooking
$475,000
Work in Process-Mixing
Work in Process-Packaging
$650,000
Work in Process-Cooking
Finished Goods
$915,000
Work in Process-Packaging
133. The bottling department had the following data for the month of January:
Units in BWIP
–
Units completed
7,500
Units in EWIP (35% complete)
1,200
Total manufacturing costs
13,464
Required:
A. What is the output in equivalent units for January?
B. What is the unit manufacturing cost for January?
C. Calculate the cost of goods transferred out for January.
D. Calculate the value of January’s EWIP
Units completed
7,500
1,200 units × 35% complete
January output
7,920
Chapter 6 – Process Costing
134. Scott Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs
are added uniformly in the mixing department.
Information for the mixing department for May follows:
Work in process, May 1:
Units (45% complete)
10,000
Direct materials
$23,000
Direct labor
$37,000
Overhead
$15,000
During May, 65,000 units were completed and transferred to the molding department. The following costs were incurred
by the mixing department during May:
Direct materials
$115,000
Direct labor
$140,000
Overhead
$55,000
By May 31, 4,000 units that were 80% complete remained in Mixing. Scott uses the weighted average method.
Required:
A. Calculate the equivalent units of production using the weighted average method.
B. Calculate the total costs to account for.
C. Calculate total cost per equivalent unit of production rounded to 2 decimal places.
D. Calculate the cost of goods transferred to the molding department during May.
E. Calculate the cost of May’s ending work-in-process for the mixing department.
Units completed
65,000
Units in ending work in process (7,000 × 80%)
Total equivalent units
68,200
Costs to account for:
Conversion
Materials
Beginning work in process
$23,000
$52,000
$75,000
Incurred during the period
$115,000
$195,000
$310,000
Total costs to account for
$138,000
$247,000
$385,000
Units completed
65,000
Units in ending work in process (7,000 × 80%)
Total equivalent units
68,200
Costs to account for:
Conversion
Materials
Beginning work in process
$23,000
$52,000
$75,000
Incurred during the period
$115,000
$195,000
$310,000
Total costs to account for
$138,000
$247,000
$385,000
Chapter 6 – Process Costing
Cost per equivalent unit ($385,000 / 68,200) = $5.65
Cost per equivalent unit ($385,000 / 68,200) = $5.65
65,000 × 5.65 = $367,250
Units completed
Units in ending work in process (7,000 × 80%)
3,200
Total equivalent units
Costs to account for:
Conversion
Beginning work in process
Incurred during the period
Total costs to account for
Cost per equivalent unit ($385,000 / 68,200) = $5.65
3,200 EWIP × $5.65 = $18,080
135. 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:
Work in process, June 1
Units (60% complete)
5,000
Direct materials
$20,000
Direct labor
$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 labor
200,000
Overhead
59,200
At June 30, 12,000 units that were 10% 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 process for the mixing department.
Chapter 6 – Process Costing
A.
Units accounted for:
Units completed
Units in EWIP (10% complete)
Total units accounted for
B.
Costs to account for:
Beginning work in process
($20,000 + $24,000 + $4,000)
Incurred during the period
($180,000 + $200,000 + $59,200)
Total costs to account for
C.
($487,200 / 81,200)
D.
(80,000 × $6.00)
E.
(1,200 × $6.00)
136. 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 process, June 1:
Units (30% complete)
15,000
Direct materials
$ 4,000
Direct labor
$ 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 labor
30,000
Overhead
12,000
At June 30, 8,000 units that were 70% 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 process for the mixing department.
Chapter 6 – Process Costing
F.
Determine the equivalent units of production for June if ending inventory had been 80%
complete.
A.
105,600
Units accounted for:
Flow
Units completed
Units in EWIP (70% complete)
Total units accounted for
B.
$101,376
Costs to account for:
Beginning work in process
($4,000 + $3,000 + $2,376)
Costs added
($50,000 + $30,000 + $12,000)
Total costs to account for
D.
$96,000 = (100,000 × $0.96)
$5,376 = 5,600 × $0.96
100,000 + (8,000 × 80%) = 106,400
Figure 6-8.
Department A had the following data for October:
Units in beginning work in process
0
Units Completed
2,000
Units in ending work in process (30% complete)
1,200
Total manufacturing cost
$6,608
137. Refer to Figure 6-8.
A.
Calculate the equivalent units of production in ending work-in-process inventory.
B.
Calculate total equivalent units of production for Department A for October.
A.
Ending work-in-process
1,200 × 0.30
B.
Total equivalent units
360 + 2,000
2,360
138. Refer to Figure 6-8. What is the unit manufacturing cost for Department A for October?
Unit cost = $6,608 / 2,360 = $2.80
139. Refer to Figure 6-8.
Chapter 6 – Process Costing
A.
What is the cost of goods transferred out?
B.
What is the cost of ending work-in-process inventory?
140. Harley 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 process consisted of 25,000 units that were 80% complete with respect to conversion.
Ending work in process consisted of 15,000 units that were 40% 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 weighted average method.
A.
Physical flow schedule:
Units to account for:
Units in beginning work in process
25,000
Units started
90,000
Total units to account for
Units accounted for:
Units completed and transferred out:
Started and completed
75,000
From beginning work in process
25,000
Units in ending work in process
15,000
Total units accounted for
B.
Equivalent units:
Cost
Units completed
Units in EWIP × Fraction complete:
Materials (15,000 × 100%)
15,000
Conversion (15,000 × 40%)
Equivalent units of output
141. King Corporation produces a product that passes through two departments. For December, the following equivalent
unit schedule was prepared for the first department:
Materials
Conversion
Cost
Units completed
10,000
10,000
Units in EWIP × Fraction complete:
Chapter 6 – Process Costing
Materials (2,000 × 100%)
2,000
Conversion (2,000 × 25%)
500
Equivalent units of output
12,000
10,500
Costs assigned to beginning work in process:
Materials:
$14,000
Conversion:
$20,000
Manufacturing costs incurred during the month:
Materials:
$34,000
Conversion:
$43,000
Required:
A.
Compute the unit cost for December using the weighted average method.
B.
Determine the cost of goods transferred out.
C.
Determine the cost of ending work in process.
A.
Cost per equivalent unit:
Materials = ($14,000 + $34,000) / 12,000 = $4.00
Conversion = ($20,000 + $43,000) / 10,500 = $6.00
Total unit cost = $10.00 per equivalent unit ($4.00 + $6.00)
B.
Cost of goods transferred out = $10 × 10,000 = $100,000
C.
Cost of ending work in process
= (2,000 × $4) + (500 × $6)
= $8,000 + $3,000 = $11,000
142. 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 per equivalent unit 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 process.
A.
Cost of goods transferred out = $8.00 × 90,000 = $720,000
B.
Cost of ending work in process:
Materials (4,000 × $5.00)
Conversion (1,200 × $3.00)
3,600
Total cost