Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 16
PROCESS COSTING
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S TAXONOMY
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
True-False Statements
1.
1
K
9.
4
K
17.
6
K
25.
7
K
sg33.
3
C
2.
1
K
10.
4
K
18.
6
C
a26.
8
K
sg34.
4
K
3.
1
C
11.
4
K
19.
6
K
a27.
8
K
sg35.
5
K
4.
2
C
12.
5
C
20.
6
K
a28.
8
K
sg36.
6
K
5.
2
K
13.
5
K
21.
6
C
a29.
8
K
sg, a37.
8
K
6.
2
K
14.
5
K
22.
6
K
a30.
8
K
7.
2
K
15.
5
K
23.
7
K
sg31.
1
K
8.
4
C
16.
5
AP
24.
7
K
sg32.
2
K
Multiple Choice Questions
38.
1
C
60.
5
AP
82.
6
AP
104.
6
AP
126.
7
K
39.
1
C
61.
5
K
83.
6
AP
105.
6
AP
a127.
8
AP
40.
1
K
62.
5
AP
84.
6
AP
106.
6
AP
a128.
8
AP
41.
1
K
63.
5
AP
85.
6
AP
107.
6
AP
a129.
8
AP
42.
1
K
64.
5
AP
86.
6
AP
108.
6
AP
a130.
8
AP
43.
2
C
65.
5
C
87.
6
AP
109.
6
AP
a131.
8
AP
44.
2
K
66.
5
AP
88.
6
AP
110.
6
AP
a132.
8
AP
45.
2
C
67.
5
AP
89.
6
AP
111.
6
C
a133.
8
AP
46.
2
K
68.
5
AP
90.
6
AP
112.
6
AP
a134.
8
AP
47.
2
K
69.
5
AP
91.
6
AP
113.
6
AP
st135.
1
K
48.
2
C
70.
5
AP
92.
6
AP
114.
6
AP
sg136.
2
K
49.
2
K
71.
5
AP
93.
6
AP
115.
6
AP
st137.
2
K
50.
4
C
72.
5
AP
94.
6
AP
116.
6
AP
sg138.
5
K
51.
4
C
73.
5
AP
95.
6
AP
117.
6
AP
sg139.
5
K
52.
4
C
74.
5
AP
96.
6
AP
118.
6
AP
st140.
5
K
53.
4
C
75.
5
AP
97.
6
AP
119.
6
AP
sg141.
6
AP
54.
4
K
76.
5
AP
98.
6
AP
120.
6
AP
st142.
6
K
55.
4
C
77.
5
AP
99.
6
AP
121.
6
AP
sg143.
6
C
56.
5
AP
78.
5
AP
100.
6
C
122.
6
AP
sg144.
6
AP
57.
5
AP
79.
5
AP
101.
6
C
123.
6
AP
st145.
6
K
58.
5
AP
80.
6
AP
102.
6
AP
124.
7
K
sg146.
7
K
59.
5
AP
81.
6
AP
103.
6
K
125.
7
K
Brief Exercises
147.
5
AP
150.
6
AP
153.
6
AP
156.
6
AP
148.
5
AP
151.
6
AP
154.
6
AP
a157.
8
AP
149.
5
AP
152.
6
AP
155.
6
AP
a158.
8
AP
sg This question also appears in the Study Guide.
st This question also appears in a self-test at the student companion website.
a This topic is dealt with in an Appendix to the chapter.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 2
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S TAXONOMY
Exercises
159.
4
AP
165.
5
AP
171.
5,6
AP
177.
5,6
AP
183.
7
AP
160.
4
AP
166.
5,6
AP
172.
5,6
AP
178.
6
AP
184.
7
AP
161.
4
AP
167.
5,6
AN
173.
5,6
AP
179.
6
AP
a185.
8
AP
162.
4
AP
168.
5,6
AP
174.
5,6
AP
180.
6
AP
a186.
8
AP
163.
4
AP
169.
5,6
AP
175.
5,6
AP
181.
7
AP
164.
5
AP
170.
5,6
AP
176.
5,6
AP
182.
7
AP
Completion Statements
187.
1
K
189.
2
K
191.
5
K
193.
6
AP
195.
7
K
188.
2
K
190.
4
K
192.
6
K
194.
6
K
Matching Statements
196.
2
K
Short-Answer Essay
197.
1
S
198.
6
S
199.
1
S
200.
6
S
201.
1
S
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Learning Objective 1
1.
TF
3.
TF
38.
MC
40.
MC
42.
MC
187.
C
199.
SA
2.
TF
31.
TF
39.
MC
41.
MC
135.
MC
197.
SA
201.
SA
Learning Objective 2
4.
TF
7.
TF
44.
MC
47.
MC
136.
MC
189.
C
5.
TF
32.
TF
45.
MC
48.
MC
137.
MC
196.
MA
6.
TF
43.
MC
46.
MC
49.
MC
138.
C
Learning Objective 3
33.
TF
Learning Objective 4
8.
TF
11.
TF
51.
MC
54.
MC
159.
Ex
162.
Ex
9.
TF
34.
TF
52.
MC
55.
MC
160.
Ex
163.
Ex
10.
TF
50.
MC
53.
MC
138.
MC
161.
Ex
190.
C
Learning Objective 5
12.
TF
58.
MC
66.
MC
74.
MC
147.
BE
169.
Ex
177.
Ex
13.
TF
59.
MC
67.
MC
75.
MC
148.
BE
170.
Ex
191.
C
14.
TF
60.
MC
68.
MC
76.
MC
149.
BE
171.
Ex
15.
TF
61.
MC
69.
MC
77.
MC
164.
Ex
172.
Ex
16.
TF
62.
MC
70.
MC
78.
MC
165.
Ex
173.
Ex
35.
TF
63.
MC
71.
MC
79.
MC
166.
Ex
174.
Ex
56.
MC
64.
MC
72.
MC
139.
MC
167.
Ex
175.
Ex
57.
MC
65.
MC
73.
MC
140.
MC
168.
Ex
176.
Ex
Process Costing
16 - 3
Learning Objective 6
17.
TF
85.
MC
97.
MC
109.
MC
121.
MC
154.
BE
179.
Ex
18.
TF
86.
MC
98.
MC
110.
MC
122.
MC
155.
BE
180.
Ex
19.
TF
87.
MC
99.
MC
111.
MC
123.
MC
156.
BE
192.
Cx
20.
TF
88.
MC
100.
MC
112.
MC
141.
MC
170.
Ex
193.
Cx
21.
TF
89.
MC
101.
MC
113.
MC
142.
MC
171.
Ex
194.
Cx
22.
TF
90.
MC
102.
MC
114.
MC
143.
MC
172.
Ex
198.
SA
36.
TF
91.
MC
103.
MC
115.
MC
144.
MC
173.
Ex
200.
SA
80.
MC
92.
MC
104.
MC
116.
MC
145.
MC
174.
Ex
81.
MC
93.
MC
105.
MC
117.
MC
150.
BE
175.
Ex
82.
MC
94.
MC
106.
MC
118.
MC
151.
BE
176.
Ex
83.
MC
95.
MC
107.
MC
119.
MC
152.
BE
177.
Ex
84.
MC
96.
MC
108.
MC
120.
MC
153.
BE
178.
Ex
Learning Objective 7
23.
TF
25.
TF
125.
MC
151.
MC
182.
Ex
184.
Ex
24.
TF
124.
MC
126.
MC
181.
Ex
183.
Ex
195.
C
Learning Objective a8
26.
TF
29.
TF
128.
MC
131.
MC
134.
MC
185.
Ex
208.
SA
27.
TF
30.
TF
129.
MC
132.
MC
157.
BE
186.
Ex
28.
TF
127.
MC
130.
MC
133.
MC
158.
BE
198.
C
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise MA = Matching
SA = Short-Answer Essay
The chapter also contains one set of ten Matching questions and five Short-Answer Essay
questions.
CHAPTER LEARNING OBJECTIVES
1. Understand who uses process cost systems. Companies that mass-produce similar
products in a continuous fashion use process cost systems. Once production begins, it
continues until the finished product emerges. Each unit of finished product is
indistinguishable from every other unit.
2. Explain the similarities and differences between job order cost and process cost
systems. Job order cost systems are similar to process cost systems in three ways: (1)
Both systems track the same cost elements—direct materials, direct labor, and
manufacturing overhead. (2) Both accumulate cost in the same accounts—Raw Materials
Inventory, Factory Labor, and Manufacturing Overhead. (3) Both assign accumulated costs
to the same accounts—Work in Process, Finished Goods Inventory, and Cost of Goods
Sold. However, the method of assigning costs differs significantly.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 4
There are four main differences between the two cost systems: (1) A process cost system
uses separate accounts for each department or manufacturing process, rather than only
one work in process account used in a job order cost system. (2) A process cost system
summarizes costs in a production cost report for each department. A job order cost system
charges costs to individual jobs and summarizes them in a job cost sheet. (3) Costs are
totaled at the end of a time period in a process cost system, but at the completion of a job in
a job cost system. (4) A process cost system calculates unit cost as: Total manufacturing
costs for the period ÷ Units produced during the period. A job order cost system calculates
unit cost as: Total cost per job ÷ Units produced.
3. Explain the flow of costs in a process cost system. A process cost system assigns
manufacturing costs for raw materials, labor, and overhead to work in process accounts for
various departments or manufacturing processes. It transfers the costs of units completed
from one department to another as those units move through the manufacturing process.
The system transfers the costs of completed work to Finished Goods Inventory. Finally,
when inventory is sold, the system transfers costs to Cost of Goods Sold.
4. Make the journal entries to assign manufacturing costs in a process cost system.
Entries to assign the costs of raw materials, labor, and overhead consist of a credit to Raw
Materials Inventory, Factory Labor, and Manufacturing Overhead, and a debit to Work in
Process for each department. Entries to record the cost of good transferred to another
department are a credit to Work in Process for the department whose work is finished and a
debit to the department to which the goods are transferred. The entry to record units
completed and transferred to the warehouse is a credit for the department whose work is
finished and a debit to Finished Goods Inventory. The entry to record the sale of goods is a
credit to Finished Goods Inventory and a debit to Cost of Goods Sold.
5. Compute equivalent units. Equivalent units of production measure work done during a
period, expressed in fully completed units. Companies use this measure to determine the
cost per unit of completed product. Equivalent units are the sum of units completed and
transferred out plus equivalent units of ending work in process.
6. Explain the four steps necessary to prepare a production cost report. The four steps to
complete a production cost report are: (1) Compute the physical unit flow—that is, the total
units to be accounted for. (2) Compute the equivalent units of production. (3) Compute the
unit production costs, expressed in terms of equivalent units of production. (4) Prepare a
cost reconciliation schedule, which shows that the total costs accounted for equal the total
costs to be accounted for.
7. Prepare a production cost report. The production cost report contains both quantity and
cost data for a production department. There are four sections in the report: (1) number of
physical units, (2) equivalent units determination, (3) unit costs, and (4) cost reconciliation
schedule.
a8. Compute equivalent units using the FIFO method. Equivalent units under the FIFO
method are the sum of the work performed to: (1) Finish the units of beginning work in
process inventory, if any; (2) complete the units started into production during the period;
and (3) start, but only partially complete, the units in ending work in process inventory.
Process Costing
16 - 5
TRUE-FALSE STATEMENTS
1. Process cost accounting focuses on the process involved in mass-producing products that
are very similar in nature.
2. Process cost systems are used to apply costs to a specific job, such as the manufacturing
of a specialized machine.
3. A company that produces motion pictures would likely use a process cost system.
4. In a process cost system, costs are tracked through a series of connected manufacturing
processes or departments, rather than by individual jobs.
5. In a process cost system, total costs are determined at the end of a month or year.
6. Separate work in process accounts are maintained for each production department or
manufacturing process in a process cost system.
7. In a process cost system, materials, labor and overhead are only added in the first
production department.
8. The assignment of the three manufacturing cost elements to Work in Process in a process
cost system is the same as in a job order cost system.
9. Fewer materials requisitions are generally required in a process cost system than in a job
order cost system.
10. In a process cost system, labor costs incurred may be captured on time tickets.
11. A primary driver of overhead costs in continuous manufacturing operations is machine
time used.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 6
12. Equivalent units of production are used to determine the cost per unit of completed
products.
13. Equivalent units of production measure the work done during a period, expressed in fully
completed units.
14. Equivalent units of production is the sum of units completed and transferred out plus
equivalent units of beginning work in process.
15. The weighted-average method of computing equivalent units is the most widely used
method in practice.
16. There are no units in process at the beginning of the period, 1,500 units in process at the
end of the period that are 40% complete, and 15,000 units transferred out during the
period. Based on this information, there were 14,400 equivalent units of production during
the period.
17. The first step performed in preparing a production cost report is computing the equivalent
units of production.
18. Equivalent units of production must be calculated before the unit production costs can be
computed.
19. The physical units in a department are another name for the equivalent units of
production.
20. Unit material cost is computed by taking total material costs charged to the department for
the period and dividing by the physical units in the process during the period.
21. When equivalent units of production are different for materials and conversion costs, unit
costs are computed for materials, conversion, and total manufacturing.
22. The total manufacturing cost per unit is used in costing the units completed and
transferred during the period.
Process Costing
16 - 7
23. A production cost report is an internal document for management that shows production
quantity and cost data for a particular job.
24. Production cost reports provide a basis for evaluating the productivity of a department.
25. Companies often use a combination of a process cost and a job order cost system, called
operations costing.
a26. The FIFO method is easier to understand and use than the weighted-average method.
a27. The FIFO method is conceptually superior to the weighted-average method.
a28. When comparing the FIFO with the weighted-average method, the FIFO method provides
current cost information.
a29. There are no units in ending work in process at the end of the period under the FIFO
method.
a30. Companies using the weighted-average method do not complete units left over from the
previous accounting periods, they start new units.
31. In continuous process manufacturing, generally once the production begins, it continues
until the finished product emerges.
32. One similarity of process cost accounting with job order cost accounting is that both
determine total manufacturing costs after each job.
33. The flow of costs in a process costing system requires that materials be added in one
department, labor added in another department and manufacturing overhead in a third
department.
34. When finished goods are sold, the entry to record the cost of goods sold is a debit to
Finished Goods Inventory and a credit to Cost of Goods Sold.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 8
35. When there is no beginning work in process and materials are entered at the beginning of
the process, equivalent units of materials are the same as the units started into
production.
36. In order to compute the physical unit flow, a company must first compute unit production
costs.
37. Under the FIFO method, it is assumed that the beginning work in process is completed
before new work is started.
MULTIPLE CHOICE QUESTIONS
38. A process cost accounting system is most appropriate when
a. a variety of different products are produced, each one requiring different types of
materials, labor, and overhead.
b. the focus of attention is on a particular job or order.
c. similar products are mass-produced.
d. individual products are custom made to the specification of customers.
39. A characteristic of products that are mass-produced in a continuous fashion is that
a. the products are identical or very similar in nature.
b. they are grouped in batches.
c. they are produced at the time an order is received.
d. their costs are accumulated on job cost sheets.
40. A process cost system would be used for all of the following products except
a. chemicals.
b. computer chips.
c. motion pictures.
d. soft drinks.
Process Costing
16 - 9
41. In a process cost system,
a. a Work in Process account is maintained for each product.
b. a materials requisition must identify the job on which the materials will be used.
c. a Work in Process account is maintained for each process.
d. one Work in Process account is maintained for all the processes, similar to a job order
cost system.
42. Differences between a job order cost system and a process cost system include all of the
following except the
a. documents used to track costs.
b. point at which costs are totaled.
c. unit cost computations.
d. flow of costs.
43. Which of these best reflects a distinguishing factor between a job order cost system and a
process cost system?
a. The detail at which costs are calculated.
b. The time period each covers.
c. The number of work in process accounts.
d. The manufacturing cost elements included.
44. Which of the following is a true statement about process cost systems?
a. In process cost systems, costs are accumulated but not assigned.
b. A process cost system has one work in process account for each process.
c. In process cost systems, costs are summarized on job cost sheets.
d. Unit costs are not computed in process cost systems.
45. Which of the following is correct regarding cost systems?
Job Order Process
a. Work in process account several one for each process
b. Work in process account one one
c. Work in process account one one for each process
d. Work in process account several one
46. In a process cost system, unit costs are determined using a
a. numerator of costs of each job.
b. denominator of units produced during the period.
c. denominator of units produced for the job.
d. denominator of units produced for the day.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 10
47. In process cost accounting, manufacturing costs are summarized on a
a. job order cost sheet.
b. process order cost sheet.
c. production cost report.
d. manufacturing cost sheet.
48. Which of the following manufacturing cost elements occurs in a process cost system?
a. Direct materials.
b. Direct labor.
c. Manufacturing overhead.
d. All of these.
49. In a process cost system, product costs are summarized:
a. on job cost sheets.
b. on production cost reports.
c. after each unit is produced.
d. when the products are sold.
50. When manufacturing overhead costs are assigned to production in a process cost system,
they are debited to
a. the Finished Goods Inventory account.
b. Cost of Goods Sold.
c. a Manufacturing Overhead account.
d. a Work in Process account.
51. A product requires processing in two departments, the Baking Department and then the
Packaging Department, before it is completed. Costs transferred out of the Baking
Department will be transferred to:
a. Finished Goods Inventory.
b. Cost of Goods Sold.
c. Work in Process—Packaging Department.
d. Manufacturing Overhead.
52. Which of the following would not appear as a debit in the Work in Process account of a
second department in a two stage production process?
a. Materials used.
b. Overhead applied.
c. Labor assigned.
d. Cost of products transferred out.
Process Costing
16 - 11
53. Materials requisitions are:
a. not used in process costing.
b. generally used more frequently in process costing than job order costing.
c. generally used less frequently in process costing than job order costing.
d. used more frequently by latter stage production departments.
54. A primary driver of overhead costs in continuous manufacturing operations is:
a. direct labor dollars.
b. direct labor hours.
c. machine hours.
d. machine maintenance dollars.
55. Price Company assigns overhead based on machine hours. The Milling Department logs
1,800 machine hours and Cutting Department shows 3,000 machine hours for the period. If
the overhead rate is $5 per machine hour, the entry to assign overhead will show a
a. debit to Manufacturing Overhead for $24,000.
b. credit to Work in Process—Cutting Department for $15,000.
c. debit to Work in Process for $15,000.
d. credit to Manufacturing Overhead for $24,000.
56. Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion
costs with 10,000 units of ending work in process at 80% completion and 28,000 physical
units. There are no beginning units in the department. Conversion costs occur evenly
throughout the entire production period. What are the equivalent units for conversion costs
for the current period?
a. 38,000.
b. 36,000.
c. 8,000.
d. 26,000.
57. 15,000 units in a process that are 70% complete are referred to as:
a. 15,000 equivalent units of production.
b. 4,500 equivalent units of production.
c. 10,500 equivalent units of production.
d. 4,500 equivalent units of production.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 12
58. A process with no beginning work in process, completed and transferred out 95,000 units
during a period and had 50,000 units in the ending work in process inventory that were
30% complete. The equivalent units of production for the period were:
a. 95,000 equivalent units.
b. 145,000 equivalent units.
c. 110,000 equivalent units.
d. 47,500 equivalent units.
59. A department adds raw materials to a process at the beginning of the process and incurs
conversion costs uniformly throughout the process. For the month of January, there were
no units in the beginning work in process inventory; 80,000 units were started into
production in January; and there were 20,000 units that were 40% complete in the ending
work in process inventory at the end of January. What were the equivalent units of
production for materials for the month of January?
a. 88,000 equivalent units.
b. 72,000 equivalent units.
c. 60,000 equivalent units.
d. 80,000 equivalent units.
60. A department adds raw materials to a process at the beginning of the process and incurs
conversion costs uniformly throughout the process. For the month of January, there were
no units in the beginning work in process inventory; 80,000 units were started into
production in January; and there were 20,000 units that were 40% complete in the ending
work in process inventory at the end of January. What were the equivalent units of
production for conversion costs for the month of January?
a. 60,000 equivalent units.
b. 72,000 equivalent units.
c. 68,000 equivalent units.
d. 80,000 equivalent units.
61. Equivalent units are calculated by
a. multiplying the percentage of work done by the equivalent units of output.
b. dividing physical units by the percentage of work done.
c. multiplying the percentage of work done by the physical units.
d. dividing equivalent units by the percentage of work done.
Process Costing
16 - 13
62. Minor Company had the following department data:
Physical Units
Work in process, July 1 30,000
Completed and transferred out 135,000
Work in process, July 31 45,000
Materials are added at the beginning of the process. What is the total number of
equivalent units for materials in July?
a. 135,000.
b. 150,000.
c. 210,000.
d. 180,000
63. Corsi Company had the following department data:
Physical Units
Work in process, beginning -0-
Completed and transferred out 70,000
Work in process, ending 7,000
Materials are added at the beginning of the process. What is the total number of
equivalent units for materials during the period?
a. 70,000.
b. 7,000.
c. 77,000.
d. 63,000.
64. Gantner Company had the following department information about physical units and
percentage of completion:
Physical Units
Work in process, May 1 (60%) 60,000
Completed and transferred out 150,000
Work in process, May 31 (40%) 50,000
If materials are added at the beginning of the production process, what is the total number
of equivalent units for materials during May?
a. 210,000.
b. 200,000.
c. 194,000.
d. 170,000.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 14
65. It is necessary to calculate equivalent units of production in a department because
a. a physical count of units is impossible.
b. some units worked on in the department are not fully complete.
c. the physical units in the department are always 100% complete.
d. at times a department may use a job order cost system and then switch to a process
cost system.
66. In the month of June, a department had 20,000 units in beginning work in process that
were 70% complete. During June, 80,000 units were transferred into production from
another department. At the end of June there were 10,000 units in ending work in process
that were 40% complete. Materials are added at the beginning of the process, while
conversion costs are incurred uniformly throughout the process. How many units were
transferred out of the process in June?
a. 80,000 units.
b. 70,000 units.
c. 90,000 units.
d. 100,000 units.
67. In the month of June, a department had 20,000 units in beginning work in process that
were 70% complete. During June, 80,000 units were transferred into production from
another department. At the end of June there were 10,000 units in ending work in process
that were 40% complete. Materials are added at the beginning of the process, while
conversion costs are incurred uniformly throughout the process. The equivalent units of
production for materials for June were
a. 90,000 equivalent units.
b. 100,000 equivalent units.
c. 104,000 equivalent units.
d. 80,000 equivalent units.
68. In the month of June, a department had 20,000 units in beginning work in process that
were 70% complete. During June, 80,000 units were transferred into production from
another department. At the end of June there were 10,000 units in ending work in process
that were 40% complete. Materials are added at the beginning of the process, while
conversion costs are incurred uniformly throughout the process. The equivalent units of
production for conversion costs for June were
a. 80,000 equivalent units.
b. 94,000 equivalent units.
c. 90,000 equivalent units.
d. 100,000 equivalent units.
Process Costing
16 - 15
69. A process with no beginning work in process, completed and transferred out 28,000 units
during a period and had 14,000 units in the ending work in process that were 50%
complete. How much is equivalent units of production for the period for conversion costs?
a. 35,000 equivalent units.
b. 42,000 equivalent units.
c. 49,000 equivalent units.
d. 21,000 equivalent units.
70. A process with 1,600 units of beginning work in process, completed and transferred out
20,000 units during a period. There were 10,000 units in the ending work in process that
were 50% complete as to conversion costs. Materials are added 80% at the beginning of
the process and 20% when the units are 90% complete. How much is equivalent units of
production for the period for material costs?
a. 24,000 equivalent units.
b. 30,000 equivalent units.
c. 22,000 equivalent units.
d. 28,000 equivalent units.
71. Hanker Company had the following department data on physical units:
Work in process, beginning 3,000
Completed and transferred out 12,000
Work in process, ending 2,400
Materials are added at the beginning of the process. What is the total number of
equivalent units for materials during the period?
a. 12,600.
b. 2,400.
c. 14,400.
d. 9,000.
72. Super-Tech Industries had the following department information about physical units and
percentage of completion:
Physical Units
Work in process, June 1 (75%) 8,000
Completed and transferred out 18,000
Work in process, June 30 (50%) 12,000
If materials are added at the beginning of the production process, what is the total number
of equivalent units for materials during June?
a. 15,000.
b. 30,000.
c. 32,000.
d. 24,000.
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 16
73. Gloria Company had no beginning work in process. During the period, 12,000 units were
completed, and there were 1,200 units of ending work in process. How many units were
started into production?
a. 13,200.
b. 12,000.
c. 10,800.
d. 1,200.
74. Cohen Company is trying to determine the equivalent units for conversion costs with
5,000 units of ending work in process at 80% completion and 35,000 units that are 100%
complete as to materials. There are no beginning units in the department. Materials are
added at the beginning of the process, and conversion costs occur evenly throughout the
entire production period. What is the equivalent units of production for conversion costs
for the current period?
a. 40,000.
b. 39,000.
c. 4,000.
d. 34,000.
75. If beginning work in process is 4,000 units, ending work in process is 2,000 units, and the
units accounted for equals 12,000 units, what must units started into production be?
a. 16,000.
b. 14,000.
c. 8,000.
d. 10,000.
76. The Molding Department of Kennett Company has the following production data:
beginning work in process 25,000 units (60% complete), started into production 425,000
units, completed and transferred out 400,000 units, and ending work in process 50,000
units (40% complete). Assuming materials are entered at the beginning of the process,
equivalent units for materials are:
a. 450,000.
b. 375,000.
c. 400,000.
d. 475,000.
Process Costing
16 - 17
77. The Molding Department of Kennett Company has the following production data:
beginning work in process 25,000 units (60% complete), started into production 425,000
units, completed and transferred out 400,000 units, and ending work in process 50,000
units (40% complete). Assuming conversion costs are incurred uniformly during the
process, the equivalent units for conversion costs are:
a. 450,000.
b. 405,000.
c. 420,000.
d. 400,000.
78. The Molding Department of Boswell Company has the following production data:
beginning work process 40,000 units (60% complete), started into production 680,000
units, completed and transferred out 640,000 units, and ending work in process 80,000
units (40% complete). Assuming materials are entered at the beginning of the process,
equivalent units for materials are:
a. 720,000.
b. 600,000.
c. 640,000.
d. 760,000.
79. The Molding Department of Boswell Company has the following production data:
beginning work process 40,000 units (60% complete), started into production 680,000
units, completed and transferred out 640,000 units, and ending work in process 80,000
units (40% complete). Assuming conversion costs are incurred uniformly during the
process, the equivalent units for conversion costs are:
a. 720,000.
b. 760,000.
c. 672,000.
d. 600,000.
80. Crawford Company has the following equivalent units for July: materials 20,000 and
conversion costs 18,000. Production cost data are:
Materials Conversion
Work in process, July 1 $ 3,200 $ 1,500
Costs added in July 25,200 21,000
The unit production costs for July are:
Materials Conversion Costs
a. $1.26 $1.25
b. 1.42 1.17
c. 1.26 1.17
d. 1.42 1.25
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 18
81. In Moyer Company, the Cutting Department had beginning work in process of 6,000 units,
transferred out 16,000 units, and had an ending work in process of 3,000 units. How many
units were started by Moyer during the month?
a. 10,000.
b. 13,000.
c. 16,000.
d. 19,000.
82. In the Shaping Department of Rollins Company the unit materials cost is $5.00 and the
unit conversions cost is $3.00. The department transferred out 20,000 units and had 2,500
units in ending work in process 20% complete. If all materials are added at the beginning
of the process, the total cost to be assigned to the ending work in process is
a. 4,000.
b. 12,500.
c. 14,000.
d. 20,000.
83. Holton Company has the following equivalent units for July: materials 20,000 and
conversion 18,000. Production cost data are:
Materials Conversion
Work in process, July 1 $ 4,800 $ 2,250
Costs added in July 37,800 31,500
The unit production costs for July are:
Materials Conversion Costs
a. $1.89 $1.88
b. 2.13 1.75
c. 1.89 1.75
d. 2.13 1.88
84. In Kapler Company, the Cutting Department had beginning work in process of 8,000 units,
transferred out 20,000 units, and had an ending work in process of 4,000 units. How many
units were started by Kapler during the month?
a. 12,000.
b. 16,000.
c. 20,000.
d. 24,000.
Process Costing
16 - 19
85. In the Shaping Department of Jenkins Company the unit materials cost is $2.50 and the
unit conversion cost is $1.50. The department transferred out 8,000 units and had 2,000
units in ending work in process 20% complete. If all materials are added at the beginning
of the process, the total cost to be assigned to the ending work in process is
a. $1,600.
b. $5,000.
c. $5,600.
d. $8,000.
86. Cinder Company had the following department information for the month:
Total materials costs $ 80,000
Equivalent units of materials 10,000
Total conversion costs $120,000
Equivalent units of conversion costs 20,000
How much is the total manufacturing cost per unit?
a. $14.00.
b. $6.66.
c. $6.00.
d. $8.00.
87. Materials costs of $500,000 and conversion costs of $535,500 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, 100,000 units were started into
production in September, and there were 8,000 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. $460,000.
b. $977,500.
c. $1,035,500.
d. $1,063,000.
88. Materials costs of $500,000 and conversion costs of $535,500 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, 100,000 units were started into
production in September, and there were 8,000 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 8,000 units in the
ending work in process?
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition
16 - 20
MC. 88 (cont)
a. $40,000.
b. $18,000.
c. $34,000.
d. $58,000.
89. Charley Company’s Assembly Department has materials cost at $3 per unit and
conversion cost at $6 per unit. There are 20,000 units in ending work in process, all of
which are 70% complete as to conversion costs and 100% complete as to materials. How
much are total costs to be assigned to inventory?
a. $84,000.
b. $144,000.
c. $126,000.
d. $180,000.
90. Byrd Company decided to analyze certain costs for June of the current year. Units started
into production equaled 14,000 and ending work in process equaled 2,000 units. 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 $35,000?
a. $2.19.
b. $8.75.
c. $2.80.
d. $1.40.
91. Long Company has recently tried to improve its analysis for its manufacturing process.
Units started into production equaled 6,000 and ending work in process equaled 400
units. Long 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 $24,000?
a. $4.00.
b. $4.21.
c. $15.00.
d. $3.75.
