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Process Costing
16 - 21
92. Conversion cost per unit equals $7.00. Total materials costs are $60,000. Equivalent units
are 20,000. How much is the total manufacturing cost per unit?
a. $10.00.
b. $7.00.
c. $4.00.
d. $3.00.
93. Physical units are 40,000. Total conversion costs are $237,000. There are 1,000 units in
ending inventory which are 50% complete as to conversion costs. How much are
conversion costs per unit?
a. $6.00.
b. $5.92.
c. $11.86.
d. $5.78.
94. Madison Industries has equivalent units of 4,000 for materials and for conversion costs.
Total manufacturing costs are $160,000. Total materials costs are $120,000. How much is
the conversion cost per unit?
a. $4.00.
b. $10.00.
c. $40.00.
d. $8.00.
95. Equivalent units for materials total 30,000. There were 24,000 units completed and
transferred out. Equivalent units for conversion costs equals 27,000. How much are the
physical units for conversion costs if ending work in process is 50% complete?
a. 27,000.
b. 30,000.
c. 6,000.
d. 24,000.
96. If equivalent units are 12,000 for conversion costs and units transferred out equals 8,000,
what stage of completion should the ending work in process be for the 16,000 units
remaining?
a. 75%.
b. 25%.
c. 10%.
d. 20%.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
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97. In the month of April, a department had 500 units in the beginning work in process
inventory that were 60% complete. These units had $40,000 of materials costs and
$30,000 of conversion costs. Materials are added at the beginning of the process and
conversion costs are added uniformly throughout the process. During April, 10,000 units
were completed and transferred to the finished goods inventory and there were 2,000
units that were 25% complete in the ending work in process inventory on April 30. During
April, manufacturing costs charged to the department were: Materials $920,000;
Conversion costs $1,020,000.
The cost assigned to the units transferred to finished goods during April was
a. $1,800,000.
b. $1,810,000.
c. $1,880,000.
d. $1,790,000.
98. In the month of April, a department had 500 units in the beginning work in process
inventory that were 60% complete. These units had $40,000 of materials costs and
$30,000 of conversion costs. Materials are added at the beginning of the process and
conversion costs are added uniformly throughout the process. During April, 10,000 units
were completed and transferred to the finished goods inventory and there were 2,000
units that were 25% complete in the ending work in process inventory on April 30. During
April, manufacturing costs charged to the department were: Materials $920,000;
Conversion costs $1,020,000.
The cost assigned to the units in the ending work in process inventory on April 30 was
a. $240,000.
b. $210,000.
c. $160,000.
d. $290,000.
99. Zibba Company enters materials at the beginning of the process. In January, there was no
beginning work in process, but there were 200 units in the ending work in process
inventory. The number of units completed equals the number of
a. units started.
b. units started less 200.
c. units started plus 200.
d. equivalent units.
100. If there are no units in process at the beginning of the period, then
a. the company must be using a job order cost system.
b. only one computation of equivalent units of production will be necessary.
c. the units started into production will equal the number of units transferred out.
d. the units to be accounted for will equal the units transferred out and the units in
process at the end of the period.
Process Costing
16 - 23
101. Which of the following is not a necessary step in preparing a production cost report?
a. Compute the equivalent units of production.
b. Compute the physical unit flow.
c. Prepare the job order cost sheet.
d. Prepare a cost reconciliation schedule.
102. Honrad Company's Assembly Department has materials cost at $4 per unit and
conversion cost at $8 per unit. There are 20,000 units in ending work in process, all of
which are 70% complete as to conversion costs. How much are total costs to be assigned
to inventory?
a. $112,000.
b. $192,000.
c. $168,800.
d. $240,000.
103. In a process cost system, units to be accounted for in a department are equal to the
a. number of units started or transferred into the department.
b. number of units transferred out of the department.
c. units in the beginning inventory plus the units started or transferred into the department.
d. ending inventory plus the units started or transferred into the department.
104. The total units accounted for equals units in
a. beginning work in process – units transferred out.
b. beginning work in process + ending work in process.
c. ending work in process + units transferred out.
d. ending work in process – units started into production.
105. The Slicing Department production process shows:
Units
Beginning Work in Process 10,000
Ending Work in Process 50,000
Total units to be accounted for 160,000
How many units were started into production in Department 1?
a. 170,000.
b. 110,000.
c. 160,000.
d. 150,000.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
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106. Department 1 of a two department production process shows:
Units
Beginning Work in Process 10,000
Ending Work in Process 50,000
Total units to be accounted for 160,000
How many units were transferred out to Department 2?
a. 50,000.
b. 110,000.
c. 160,000.
d. 150,000.
107. The Assembly Department shows the following information:
Units
Beginning Work in Process 20,000
Ending Work in Process 50,000
Units Transferred Out 31,000
How many total units are to be accounted for by the Assembly Department?
a. 81,000.
b. 50,000.
c. 70,000.
d. 61,000.
108. The last department in a production process shows the following information at the end of
the period:
Units
Beginning Work in Process 25,000
Started into Production 200,000
Ending Work in Process 50,000
How many units have been transferred out to finished goods during the period?
a. 200,000.
b. 225,000.
c. 250,000.
d. 175,000.
Process Costing
16 - 25
109. A process began the month with 3,000 units in the beginning work in process inventory
and ended the month with 2,000 units in the ending work in process. If 15,000 units were
completed and transferred out of the process during the month, how many units were
started into production during the month?
a. 14,000.
b. 16,000.
c. 15,000.
d. 13,000.
110. If 120,000 units are started into production there was no beginning work in process, and
40,000 units are in process at the end of the period, how many units were completed and
transferred out?
a. 120,000.
b. 40,000.
c. 80,000.
d. 160,000.
111. Total units to be accounted for less units in beginning work in process equals
a. total units accounted for.
b. units transferred out.
c. units started into production.
d. equivalent units.
112. If 120,000 units are transferred out of a department, there was no beginning work in
process, and there are 20,000 units still in process at the end of a period, the number of
units that were started into production during the period is
a. 140,000.
b. 120,000.
c. 100,000.
d. 20,000.
113. A department adds materials at the beginning of the process and incurs conversion costs
uniformly throughout the process. For the month of July, there was no beginning work in
process; 40,000 units were completed and transferred out; and there were 20,000 units in
the ending work in process that were 40% complete. During July, $96,000 materials costs
and $84,000 conversion costs were charged to the department.
The unit production costs for materials and conversion costs for July was
Materials Conversion Costs
a. $1.60 $1.40
b. $1.60 $1.75
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
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MC. 88 (cont)
c. $2.00 $1.40
d. $2.40 $2.13
114. Conversion cost per unit equals $6. Total materials costs equal $80,000. Equivalent units
for materials are 10,000. How much is the total manufacturing cost per unit?
a. $14.
b. $6.
c. $12.
d. $8.
115. The following department data are available:
Total materials costs $240,000
Equivalent units of materials 60,000
Total conversion costs $135,000
Equivalent units of conversion costs 30,000
What is the total manufacturing cost per unit?
a. $4.00.
b. $4.50.
c. $8.50.
d. $6.25.
116. Byers Company had the following department information for the month:
Total materials costs $48,000
Equivalent units of materials 5,000
Total conversion costs $80,000
Equivalent units of conversion costs 10,000
What is the total manufacturing cost per unit?
a. $8.53.
b. $8.00.
c. $9.60.
d. $17.60.
Process Costing
16 - 27
117. Physical units accounted for are 160,000. Total conversion costs are $276,500. There are
4,000 units in ending inventory which are 50% complete as to conversion costs. How
much is the conversion cost per unit?
a. $1.75.
b. $1.73.
c. $1.71.
d. $1.69.
118. A department had the following information for the month:
Total materials costs $210,000
Conversion cost per unit $3.00
Total manufacturing cost per unit $5.00
What are the equivalent units of production for materials?
a. 105,000.
b. 70,000.
c. 42,000.
d. Cannot be determined
119. Maisley Company decided to analyze certain costs for June of the current year. Units
started into production equaled 28,000 and ending work in process equaled 4,000. With
no beginning work in process inventory, how much is the conversion cost per unit if
ending work in process was 25% complete and total conversion costs equaled $105,000?
a. $3.30.
b. $3.75.
c. $4.20.
d. $2.10.
120. Materials costs of $800,000 and conversion costs of $1,020,000 were charged to a
processing department in the month of September. Materials are added at the beginning
of the process, while conversion costs are incurred uniformly throughout the process.
There were no units in beginning work in process, 20,000 units were started into
production in September, and there were 5,000 units in ending work in process that were
40% complete at the end of September.
What was the total amount of manufacturing costs assigned to those units that were
completed and transferred out of the process in September?
a. $1,840,000.
b. $2,000,000.
c. $1,606,500.
d. $1,365,000.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
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121. Materials costs of $800,000 and conversion costs of $1,020,000 were charged to a
processing department in the month of September. Materials are added at the beginning
of the process, while conversion costs are incurred uniformly throughout the process.
There were no units in beginning work in process, 20,000 units were started into
production in September, and there were 5,000 units in ending work in process that were
40% complete at the end of September.
What was the total amount of manufacturing costs assigned to the 5,000 units in the
ending work in process?
a. $455,000.
b. $500,000.
c. $280,000.
d. $200,000.
122. Mayer Company has recently tried to improve its analysis for its manufacturing process.
Units started into production equaled 18,000 and ending work in process equaled 1,200
units. Mayer had no beginning work in process inventory. Conversion costs are applied
equally throughout production, and materials are applied at the beginning of the process.
How much is the materials cost per unit if ending work in process was 25% complete and
total materials costs equaled $90,000?
a. $5.00.
b. $5.27.
c. $20.00.
d. $4.69.
123. Madison Industries has equivalent units of 8,000 for materials and for conversion costs.
Total manufacturing costs are $160,000. Total materials costs are $120,000. How much is
the conversion cost per unit?
a. $15.
b. $5.
c. $20.
d. $4.
124. In a process cost system, a production cost report is prepared
a. only for the first processing department.
b. for all departments in the aggregate.
c. for each processing department.
d. only for the last processing department.
Process Costing
16 - 29
125. A production cost report
a. is prepared for each product.
b. is prepared from a job cost sheet.
c. will show quantity and cost data for a production department.
d. will not identify a specific department if more than one department is involved in the
production process.
126. In the production cost report, the total
a. physical units accounted for equals the costs accounted for.
b. physical units accounted for equals the units to be accounted for.
c. costs charged equals the units to be accounted for.
d. costs accounted for equals the costs of the units started into production.
a127. The Cutting Department’s output during the period consists of 18,000 units completed and
transferred out, and 4,000 units in ending work in process that were 25% complete as to
materials and conversion costs. Beginning inventory was 2,000 units that were 25%
complete as to materials and conversion costs. Under the FIFO method, what are the
equivalent units of production for materials?
a. 20,300
b. 19,000
c. 21,300
d. 20,000
a128. The Wrapping Department’s output during the period consists of 17,000 units completed
and transferred out, and 900 units in ending work in process that were 75% complete as
to materials and conversion costs. Beginning inventory was 1,200 units that were 30%
complete as to materials and conversion costs. Under the FIFO method, what are the
equivalent units of production for materials?
a. 18,035
b. 18,515
c. 17,675
d. 17,315
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 30
Use the following information to answer questions 129–130.
Chicotti Company has 6,000 units in beginning work in process, 30% complete as to conversion costs,
60,000 units transferred out to finished goods, and 2,000 units in ending work in process 20% complete
as to conversion costs. The beginning and ending inventory is fully complete as to materials costs.
a129. How much are equivalent units for conversion costs if the FIFO method is used?
a. 60,400
b. 64,600
c. 56,000
d. 58,600
a130. How much are equivalent units for materials if the FIFO method is used?
a. 60,400
b. 62,000
c. 56,000
d. 68,000
a131. Schiller Company has unit costs of $3 for materials and $9 for conversion costs. There are
5,600 units in ending work in process which are 25% complete as to conversion costs,
and fully complete as to materials cost. How much is the total cost assigned to the ending
work in process inventory if the FIFO method is used?
a. 29,400
b. 67,200
c. 16,800
d. 12,600
a132. Solis Company uses the FIFO method to compute equivalent units. It has 4,000 units in
beginning work in process, 20% complete as to conversion costs and 50% complete as to
materials costs, 55,000 units started, and 6,000 units in ending work in process, 30%
complete as to conversion costs, and 80% complete as to materials cost. How much are
the equivalent units for materials under the FIFO method?
a. $59,800
b. 55,000
c. 57,800
d. 59,000
Process Costing
16 - 31
a133. Special Company had the following department information about physical units and
percentage of completion:
Physical Units
Work in process, May 1 (60%) 36,000
Completed and transferred out 65,000
Work in process, May 31 (50%) 30,000
Materials are added at the beginning of the production process. Conversion costs are
added equally throughout production. What is the total number of equivalent units during
May for conversion costs if the FIFO method is used?
a. 131,000
b. 80,000
c. 58,400
d. 109,400
a134. Hanker Company had the following department data on physical units:
Work in process, beginning 2,500
Completed and transferred out 14,000
Work in process, ending 2,000
Materials are added at the beginning of the process. What is the total number of
equivalent units for materials if the FIFO method is used?
a. 14,500
b. 13,500
c. 16,000
d. 11,500
135. A process cost system would be used by all of the following except a(n)
a. chemical company.
b. advertising company.
c. oil company.
d. computer chip company.
136. Which of the following is considered a difference between a job order cost and a process
cost system?
a. The manufacturing cost elements.
b. Documents used to track costs.
c. The accumulation of the costs of materials, labor, and overhead.
d. The flow of costs.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 32
137. The basic similarities between job order cost and process cost systems include all of the
following except the
a. manufacturing cost elements.
b. flow of costs.
c. point at which costs are totaled.
d. accumulation of the costs of materials, labor, and overhead.
138 Equivalent units of production are a measure of
a. units completed and transferred out.
b. units transferred out.
c. units in ending work in process.
d. the work done in a period expressed in fully completed units.
139. Total physical units to be accounted for are equal to the units
a. started (or transferred) into production.
b. started (or transferred) into production plus the units in beginning work in process.
c. started (or transferred) into production less the units in beginning work in process.
d. completed and transferred out.
140. In computing equivalent units, ___________ is not part of the equivalent units of
production formula.
a. units transferred out
b. beginning work in process
c. ending work in process
d. None of these is correct.
141. In Saint-Simon, Inc., the Assembly Department started 30,000 units and completed
35,000 units. If beginning work in process was 15,000 units, how many units are in ending
work in process?
a. 0.
b. 5,000.
c. 10,000.
d. 20,000.
142. The total units to be accounted for is computed by adding
a. beginning units in process to units transferred out.
b. ending units in process to units started into production.
c. beginning units in process to units started into production.
d. ending units in process to total units accounted for.
Process Costing
16 - 33
143. In the Camria Company, materials are entered at the beginning of the process. If there is
no beginning work in process, but there is an ending work in process inventory, the
number of equivalent units as to materials costs will be
a. the same as the units started.
b. the same as the units completed.
c. less than the units started.
d. less than the units completed.
144. For the Assembly Department, unit materials cost is $8 and unit conversion cost is $12. If
there are 10,000 units in ending work in process 75% complete as to conversion costs,
the costs to be assigned to the inventory are
a. $200,000.
b. $170,000.
c. $150,000.
d. $180,000.
145. The total costs accounted for in a production cost report equal the
a. cost of units completed and transferred out only.
b. cost of units started into production.
c. cost of units completed and transferred out plus the cost of ending work in process.
d. cost of beginning work in process plus the cost of units completed and transferred out.
146. In a production cost report, which one of the following sections is not shown under Costs?
a. Unit costs.
b. Costs to be accounted for.
c. Costs during the period.
d. Units accounted for.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 34
Answers to Multiple Choice Questions
BRIEF EXERCISES
BE 147
Tip Top Painting Company has the following production data for January:
• Beginning work in process, 0 units
• Units transferred out, 35,000
• Units in ending work in process, 8,000, which are 30% complete for conversion costs
Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs.
Process Costing
16 - 35
BE 148
Lowman Painting Company has the following production data for March:
• Beginning work in process, 2,000 units
• Units transferred out, 42,000
• Units in ending work in process, 10,000, which are 80% complete for conversion costs
Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs.
BE 149
The Kirkland Department of Delta Company began the month of December with beginning work
in process of 4,000 units that are 100% complete as to materials and 30% complete as to
conversion costs. Units transferred out are 10,000 units. Ending work in process contains 5,000
units that are 100% complete as to materials and 60% complete as to conversion costs.
Instructions
Compute the equivalent units of production for materials and conversion costs for the month of
December.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 36
BE 150
White Supplies’ total material costs are $50,000 and total conversion costs are $40,000.
Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Instructions
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the
month.
BE 151
Apoly Company has the following production data for January.
Ending Work in Process
Beginning
Work in Process
Units Started into
Production
Units
% Complete as to
Conversion Cost
-0-
8,500
900
30%
Instructions
Compute the physical units for January.
Process Costing
16 - 37
BE 152
Sandusky Widget Company has the following production data for March.
Ending Work in Process
Month
Beginning
Work in Process
Units
Transferred Out
Units
% Complete as to
Conversion Cost
March
1,200
8,100
800
20%
Instructions
Compute the physical units for March.
BE 153
Sequal Company has the following production data for June: units transferred out 50,000, and
ending work in process 6,000 units that are 100% complete for materials and 30% complete for
conversion costs. Unit materials cost is $5 and unit conversion cost is $9.
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in
process.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 38
BE 154
Tomlinson Company has the following production data for May:
• Beginning work in process, 0 units
• Units started, 62,000
• Ending work in process, 5,000 units that are 100% complete for materials and 60% complete
for conversion costs
• Unit materials cost, $5
• Unit conversion cost, $10
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in
process.
BE 155
Dirt Cleaners, Inc. has the following production data for January:
Transferred out 50,000 units
Ending work in process 6,000 units
The units in ending work in process are 100% complete for materials and 60% complete for
conversion costs. There is no beginning work in process. Materials cost is $6 per unit and
conversion costs are $11 per unit.
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in
process.
Process Costing
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BE 156
Production costs chargeable to the Sanding Department in July for Joyful Art are $20,000 for
materials, $26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of
production are 25,000 for materials and 20,000 for conversion costs.
Instructions
Compute the unit costs for materials and conversion costs.
aBE 157
Tip Top Painting Company has the following production data for March:
Beginning work in process, 2,000 units, which are 30% complete for conversion costs
Units transferred out, 44,000
Units in ending work in process, 6,000, which are 80% complete for conversion costs
Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs using the FIFO
method.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 40
aBE 158
The Kirkland Department of Delta Company began the month of December with beginning work
in process of 4,000 units that are 100% complete as to materials and 20% complete as to
conversion costs. Units transferred out are 12,000 units. Ending work in process contains 1,000
units that are 100% complete as to materials and 60% complete as to conversion costs.
Instructions
Compute equivalent units of production for both materials and conversion costs for the month of
December using the FIFO method.
