Exam Prep Chapter 3 Process Costing

Managerial Accounting, 4e (Whitecotton)

Chapter 3 Process Costing

1) Process costing is used to calculate the cost of homogenous goods or services.

2) A major difference between job order costing and process costing is the treatment of nonmanufacturing costs.

3) A separate Work in Process Inventory account is used in process costing for each major production process.

4) Process costing often combines direct materials and direct labor into a single category called conversion costs.

5) The process costing production report is used to determine how much manufacturing cost to transfer out of Finished Goods Inventory and into Cost of Goods Sold.

6) The process costing production report can be prepared using either the weighted-average method or the last-in, first-out (LIFO) method.

7) The key difference between a process costing production report prepared using one of the two acceptable methods is how they deal with any units and costs that are in ending Work in Process Inventory.

8) Equivalent units for materials may differ from the equivalent units for conversion costs.

9) An equivalent unit is a measure used to convert costs incurred in the previous period to costs incurred in the current period.

10) Under the weighted-average method, the only partially completed units that need to be addressed are the units in beginning inventory.

11) Cost per equivalent unit is calculated separately for direct materials and for conversion costs.

12) The total cost of Work in Process incurred in one department during the period must be allocated between costs transferred to the next department and costs transferred to Finished Goods.

13) The production report contains information about the number of physical units and equivalent units, but not their costs.

14) Under the FIFO method, the units completed during the period must be allocated between beginning units in process and units started and completed.

15) Under process costing when the product is through the last production process, the journal entry for total manufacturing cost includes a debit to Work in Process Inventory and a credit to Finished Goods Inventory.

16) Which of the following is not a characteristic of process costing?

A) Products are homogenous.

B) Costs are traced to production processes rather than products.

C) Service firms cannot use process costing.

D) Processes are standardized.

17) Which of the following is a characteristic of process costing?

A) Products are unique.

B) Costs are traced to products rather than to production processes.

C) It is employed by companies that use standardized processes.

D) It can only be used for manufacturing firms and not used for service firms.

18) Which of the following companies would most likely use process costing?

A) A soft drink company

B) A law firm

C) A custom garden equipment manufacturer

D) A home remodeling company

19) Consider a winery that employs eight people who work 40 hours per week (full time), four people who work 20 hours per week, and one person who works 10 hours per week. How many full-time equivalent employees does the winery employ?

A) 8

B) 10

C) 10.25

D) 10.5

20) Which of the following statements is not correct with respect to Fetzer Vineyards' sustainability efforts?

A) Barney Fetzer began producing wine in 1968, and he incorporated triple bottom line sustainability accounting in 2014.

B) Fetzer accounts for its profit (one component of the triple bottom line) based on growth and dollars.

C) Fetzer accounts for its planet impact (one component of the triple bottom line) by protecting its environment.

D) Fetzer accounts for its people impact (one component of the triple bottom line) by contributing to society.

21) Conversion costs consist of:

A) all costs of production.

B) raw materials and direct labor.

C) direct labor and manufacturing overhead.

D) raw materials and manufacturing overhead.

22) Under process costing, which manufacturing costs are assigned to the product as it moves from one manufacturing process to the next?

A) Direct materials, direct labor, and conversion costs

B) Direct materials, indirect materials, and manufacturing overhead

C) Direct materials, direct labor, and manufacturing overhead

D) Direct materials, direct labor, and indirect labor

23) Which of the following statements is true?

A) A process costing system will have a single Work in Process Inventory account.

B) A process costing system will have a separate Work in Process Inventory account for each of the major processes.

C) A job costing system will have a separate Work in Process Inventory account for each of the major processes.

D) A process costing system will have a separate Raw Materials Inventory account for each of the major processes.

24) Which of the following accounts will be treated differently by a process costing system as compared to a job order costing system?

A) Raw Materials Inventory

B) Work in Process Inventory

C) Finished Goods Inventory

D) Cost of Goods Sold

25) Which of the following statements is incorrect regarding the production costing report?

A) A separate production report is prepared for each major production process on an annual basis.

B) The production report provides information about the number of units and manufacturing costs that flow through a production process during an accounting period.

C) The production report is used to determine how much manufacturing cost to transfer out of Work in Process Inventory and into the next processing department or finished goods if it is the last production process.

D) The production report is used to value any units that are in process at the end of the accounting period.

26) Which of the following statements is correct with respect to the differences between using the weighted-average method or the FIFO method of preparing a process production report?

A) Use of FIFO is acceptable for GAAP, while use of weighted-average method is not.

B) FIFO is simpler to use than the weighted-average method.

C) Use of FIFO or weighted-average results in large differences for companies that maintain minimal work-in-process inventory.

D) The weighted-average method is often simpler, less costly to prepare, and provides useful information for decision-making.

27) Which of the following is not a category used to reconcile the number of physical units using the weighted average method of process costing?

A) Units started

B) Ending units in inventory

C) Cost of goods sold

D) Units completed

28) To reconcile the number of physical units using the weighted average method of process costing, one must determine whether the units were:

A) completed or still in process at the end of the period.

B) sold or still in inventory at the end of the period.

C) in the next production process or sold at the end of the period.

D) using direct materials or conversion costs at the end of the period.

29) To reconcile the number of physical units using the weighted average method of process costing, one must determine whether the units were:

A) in process at the beginning of the period or were completed at the beginning of the period.

B) in process at the beginning of the current period or in process at the beginning of the previous period.

C) in process at the beginning of the period or were sold at the beginning of the period.

D) in process at the beginning of the period or were started during the period.

30) Which of the following relationships is correct?

A) Beginning units in inventory + units started = units completed + ending units in inventory

B) Units started = beginning units in inventory + units completed + ending units in inventory

C) Units started − beginning units in inventory = units completed + ending units in inventory

D) Ending units in inventory + beginning units in inventory = units started − units completed

31) How could a firm using the weighted average method of process costing calculate how many units were worked on during a period?

A) Add beginning units in inventory and units completed

B) Add beginning units in inventory and ending units in inventory

C) Add units completed and ending units in inventory

D) Add units started and units completed

32) Every unit that passes through the production process must have been counted in which category of physical units at some point?

A) Beginning units in inventory

B) Units started

C) Ending units in inventory

D) Units completed

33) Brody Corp. uses a process costing system. Beginning inventory for January consisted of 1,300 units that were 40% completed. 13,000 units were started during January. On January 31, the inventory consisted of 650 units that were 70% completed. How many units were completed during the period?

A) 12,350

B) 13,650

C) 14,300

D) 14,950

34) Braden Corp. uses a process costing system. Beginning inventory for January consisted of 1,300 units that were 60% completed. 13,000 units were started into the process during January. During January, 12,000 units were completed. How many units were in ending inventory on January 31?

A) 1,950

B) 1,300

C) 650

D) 2,300

35) Bildy Corp. uses a process costing system. During January, 14,000 units were started, and 18,000 units were completed. On January 31, the inventory consisted of 500 units that were 70% completed. How many units were in beginning inventory on January 1?

A) 0

B) 500

C) 3,500

D) 4,500

36) Bosco Corp. uses a process costing system. Beginning inventory for January consisted of 1,500 units that were 50% completed. During January, 10,000 units were completed. On January 31, the inventory consisted of 750 units that were 75% completed. How many units were started during January?

A) 8,500

B) 9,250

C) 10,000

D) 10,750

37) How could a firm using the weighted average method of process costing calculate how many units were started during a period?

A) Add units completed and beginning units in inventory, then subtract ending units in inventory.

B) Subtract beginning units in inventory from units completed, then add ending units in inventory.

C) Add beginning units in inventory, units completed, and ending units in inventory.

D) Subtract ending units in inventory from units completed, then add beginning units in inventory.

38) A firm using process costing needs to reconcile the number of physical units in order to:

A) account for units that have different percentages of completion.

B) determine the number of units that were started during the period.

C) reconcile beginning Work in Process Inventory with ending Work in Process Inventory.

D) separate physical units from the equivalent units.

39) An equivalent unit is calculated by:

A) dividing the number of physical units by the percentage of completion.

B) multiplying the number of physical units by the percentage of completion.

C) dividing the number of physical units into direct materials and conversion costs.

D) subtracting the number of physical units in ending Work in Process Inventory from the total number of physical units.

40) Equivalent units are tracked separately for which two categories of costs?

A) Direct labor and manufacturing overhead.

B) Direct materials and conversion cost.

C) Direct materials and indirect materials.

D) Finished goods and cost of goods sold.

41) Physical units multiplied by the percentage of completion yields:

A) units completed and transferred out.

B) beginning units in process.

C) equivalent units.

D) ending units in process.

42) For units that are completed and transferred out in a firm that uses the weighted average method of process costing:

A) the number of units that came from beginning inventory is the same as the number of units that were started during the period.

B) the number of equivalent units for direct materials is the same as the number of equivalent units for conversion cost.

C) the number of equivalent units is less than the number of physical units.

D) the number of equivalent units is more than the number of physical units.

43) For a firm that uses the weighted average method of process costing, which of the following must be true?

A) Physical units must be greater than or equal to equivalent units.

B) Equivalent units must be greater than or equal to physical units.

C) Physical units must be equal to equivalent units.

D) Physical units can be greater than or less than equivalent units.

44) Brody Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,300 units that were 40% completed. 13,000 units were started into the process during January. On January 31, the inventory consisted of 650 units that were 70% completed. What would be the equivalent units for conversion cost using the weighted average method?

A) 13,000

B) 13,585

C) 14,105

D) 14,300

45) Brody Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,300 units that were 40% completed. 13,000 units were started into the process during January. On January 31, the inventory consisted of 650 units that were 70% completed. What would be the equivalent units for direct materials cost using the weighted average method?

A) 13,000

B) 13,585

C) 14,105

D) 14,300

46) Frost, Inc. is a service firm that uses process costing. The firm worked on a total of 1,600 cases this month, 800 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period, and had $4,800 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total number of equivalent units?

A) 800

B) 1,120

C) 1,440

D) 1,600

47) For a firm using the weighted average method of process costing, it would not be necessary to translate physical units into equivalent units if:

A) the FIFO method were used instead.

B) direct materials were all added at the beginning of the process.

C) direct labor and manufacturing overhead were combined into a single category called conversion costs.

D) all units worked on during the period were completed during the period.

48) For a firm that uses process costing, calculating equivalent units makes it possible to fulfill which of the following requirements of GAAP?

A) Assigning an appropriate value to assets

B) Assigning an appropriate value to liabilities

C) Expensing period costs as they are incurred

D) Recognizing revenue when it is realized or realizable

49) Crador Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,300 units. 13,000 units were started into the process during January. On January 31, the inventory consisted of 650 units. Equivalent units for conversion costs were 14,235. What percentage complete was the ending inventory with respect to conversion costs on January 31 using the weighted-average method?

A) 70%

B) 80%

C) 90%

D) 100%

50) Gatlin Manufacturing adds direct materials at the beginning of the production process, while conversion costs are incurred uniformly throughout the process. At the end of the period, equivalent units for direct materials were 250 more than equivalent units for conversion costs. 1,000 units were started during the period, and 1,000 units were also completed. Ending Work in Process Inventory was 50% complete. How many physical units were in ending Work in Process Inventory?

A) 250

B) 500

C) 750

D) 1,000

51) Computing equivalent units is especially important for:

A) goods that take a long time to produce, such as airplanes.

B) goods that are started and completed during the same period.

C) goods that take a relatively short time to produce, such as plastic bottles.

D) goods with sustainability implications in their production processes.

52) Under the weighted average method of process costing, which of the following formulas is used to calculate the cost per equivalent unit?

A) (Ending Inventory + Current Costs)/Physical Units

B) (Beginning Inventory + Current Costs)/Physical Units

C) (Ending Inventory + Current Costs)/Equivalent Units

D) (Beginning Inventory + Current Costs)/Equivalent Units

53) Under the weighted average method of process costing, the cost per equivalent unit is calculated for which of the following categories?

A) Units sold and units in ending Finished Goods Inventory

B) Direct materials and conversion costs

C) Manufacturing costs and nonmanufacturing costs

D) Completed units and ending units in process

54) Cost per equivalent unit is kept separate for direct materials and conversion costs because:

A) the physical units are different for the two categories.

B) the total manufacturing costs are different for the two categories.

C) the equivalent units are different for the two categories.

D) the ending inventories are different for the two categories.

55) Which of the following is not used in the calculation of cost per equivalent unit?

A) Current manufacturing costs

B) Current nonmanufacturing costs

C) Equivalent units

D) Beginning inventory costs

56) To calculate cost per equivalent unit in process costing, divide total manufacturing costs by the total number of equivalent units. Under the weighted average method, what costs are reflected in total manufacturing costs?

A) Only current period costs

B) Only prior period costs

C) Both current and prior period costs

D) Both current and future period costs

57) For a process costing firm, one could calculate the cost of beginning inventory in which of the following ways?

A) (Cost per equivalent unit × equivalent units) − current costs

B) Current costs − (equivalent units × cost per equivalent unit)

C) (Current costs × cost per equivalent unit) − equivalent units

D) Equivalent units × (current costs − cost per equivalent unit)

58) Frost, Inc. is a service firm that uses process costing. The firm worked on a total of 1,600 cases this month, 800 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period, and had $4,800 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the cost per equivalent unit?

A) $115.50

B) $141.43

C) $145.20

D) $165.00

59) Kenney Co. uses process costing to account for the production of canned energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs. Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs. April costs were $57,600 for materials and $64,000 for conversion costs. Ending inventory still in process was 6,400 units (100% complete for materials, 50% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be:

A) $4.00

B) $4.40

C) $1.10

D) $8.70

60) Kenney Co. uses process costing to account for the production of canned energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs. Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs. April costs were $57,600 for materials and $64,000 for conversion costs. Ending inventory still in process was 6,400 units (100% complete for materials, 50% for conversion). The cost per equivalent unit for materials using the weighted average method would be closest to:

A) $0.9167

B) $3.0000

C) $3.5833

D) $7.2500

61) Kenney Co. uses process costing to account for the production of canned energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs. Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs. April costs were $57,600 for materials and $64,000 for conversion costs. Ending inventory still in process was 6,400 units (100% complete for materials, 50% for conversion). The total cost per unit using the weighted average method would be closest to:

A) $7.9833

B) $6.9091

C) $7.0000

D) $7.2500

62) Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. During April 8,000 units were completed. Ending work in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be:

A) $8.00

B) $8.80

C) $2.20

D) $17.40

63) Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. During April 8,000 units were completed. Ending work in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The equivalent cost per unit for materials using the weighted average method would be closest to:

A) $1.8333

B) $6.0000

C) $7.1667

D) $14.5000

64) Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. During April 8,000 units were completed. Ending work in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The total cost per unit using the weighted average method would be:

A) $15.9667

B) $13.8382

C) $14.0000

D) $14.5000

65) Macadam Corp. uses the weighted average method of process costing. Its cost per equivalent unit for direct materials was $5.00 this period, and it had 25,000 equivalent units for direct materials. Beginning inventory costs were 25% of current costs. How much were current costs?

A) $25,000

B) $75,000

C) $100,000

D) $125,000

66) To reconcile the total cost of Work in Process Inventory, account for:

A) both beginning Work in Process Inventory and any costs that were added during the current period.

B) only beginning Work in Process Inventory.

C) only costs that were added during the period.

D) beginning Work in Process Inventory, any costs that were added during the current period, and completed costs.

67) To determine how much cost should be assigned to ending Work in Process Inventory:

A) multiply costs per equivalent unit by the number of equivalent units associated with units completed.

B) multiply costs per equivalent unit by the number of equivalent units associated with ending Work in Process Inventory.

C) subtract cost of beginning inventory from current period costs.

D) add cost of beginning inventory and current period costs.

68) To determine how much cost should be transferred out of Work in Process Inventory:

A) multiply costs per equivalent unit by the number of equivalent units associated with units completed.

B) multiply costs per equivalent unit by the number of equivalent units associated with ending inventory.

C) subtract cost of beginning inventory from current period costs.

D) add cost of beginning inventory and current period costs.

69) Stangol Co. uses process costing to account for the production of highlighter pens. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Cost per equivalent unit has been calculated to be $8.80 for conversion costs and $7.1667 for materials. 12,000 units were worked on during the period. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to:

A) $31,933.20

B) $46,266.80

C) $63,866.40

D) $130,000.00

70) Stangol Co. uses process costing to account for the production of highlighter pens. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Cost per equivalent unit has been calculated to be $8.80 for conversion costs and $7.1667 for materials. 12,000 units were worked on during the period. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The value of units completed and transferred out using the weighted average method would be closest to:

A) $127,733.60

B) $130,000.00

C) $152,000.00

D) $159,666.00

71) How is the ending balance in Work in Process Inventory calculated for a firm that uses the weighted average method of process costing?

A) Multiply the costs per equivalent unit by the number of equivalent units associated with ending Work in Process Inventory.

B) Subtract the cost of goods finished and the cost of goods sold from total manufacturing costs.

C) Add the costs of the jobs still in process at the end of the period.

D) Divide total manufacturing costs by total equivalent units.

72) Togo Co. uses process costing to account for the production of picture frames. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to:

A) $31,933.60

B) $46,266.80

C) $63,866.80

D) $130,000.00

73) Hager Co. uses process costing to account for the production of bottled energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The value of units completed and transferred out using the weighted average method would be closest to:

A) $63,866.40

B) $65,000.00

C) $76,000.00

D) $79,833.00

74) James Co. uses process costing to account for the production of bottled energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 10,000 units for materials and 9,000 units for conversion costs. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $41,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 75% for conversion). The value of units completed and transferred out using the weighted average method would be closest to:

A) $37,200.00

B) $55,800.00

C) $76,000.00

D) $79,833.00

75) James Co. uses process costing to account for the production of bottled energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 10,000 units for materials and 9,000 units for conversion costs. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $41,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 75% for conversion). The value of units in ending inventory using the weighted average method would be closest to:

A) $37,200.00

B) $55,800.00

C) $27,900.00

D) $32,200.00

76) TryFit Co. uses process costing to account for the production of energy food bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. During April 8,000 units were completed. Ending work in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to:

A) $15,966.60

B) $23,133.20

C) $31,933.20

D) $65,000.00

77) TryFit Co. uses process costing to account for the production of energy food bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. During April 8,000 units were completed. Ending work in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The value of units completed and transferred out using the weighted average method would be closest to:

A) $63,866.40

B) $65,000.00

C) $76,000.00

D) $79,833.00

78) Rathburn, Inc. is a service firm that uses process costing. The firm worked on a total of 1,000 cases this month, 800 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period, and had $4,800 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total cost of cases still in process at the end of the period?

A) $16,800

B) $17,520

C) $168,000

D) $175,200

79) Rathburn, Inc. is a service firm that uses process costing. The firm worked on a total of 1,000 cases this month, 800 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period, and had $4,800 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total cost of cases completed during the period?

A) $16,800

B) $17,520

C) $168,000

D) $175,200

80) Which of the following is not a step in preparing a production report?

A) Reconcile the number of physical units worked on during the period

B) Translate the physical units into equivalent units

C) Trace the cost of direct materials and direct labor to each unit

D) Calculate the cost per equivalent unit

81) The manufacturing cost that is transferred from one production process to another (for example, from production to packaging) is called the:

A) beginning Work in Process Inventory cost.

B) ending Work in Process Inventory cost.

C) transferred-in cost.

D) accumulated cost of goods.

82) Under the FIFO method, physical units must be broken down into:

A) units completed and ending units in process.

B) units started and completed and ending units in process.

C) beginning units in process and units started and completed.

D) beginning units in process, units started and completed, and ending units in process.

83) Under FIFO, to calculate the number of equivalent units, ask yourself: What did we do during the ________ period to get beginning inventory from x% to y% complete and what did we do during the ________ period to get ending inventory to z% complete?

A) current, current

B) current, prior

C) prior, current

D) prior, prior

84) Middle Co. uses process costing to account for the production of chocolate candy bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Cost per equivalent unit has been calculated to be $4.00 for conversion costs and $3.00 for materials. 3,000 units were in beginning inventory (100% complete for materials, 80% for conversion). 12,000 units were started and completed during the period. Ending inventory still in process was 6,000 units (100% complete for materials, 40% for conversion). The value of ending inventory using the FIFO method would be:

A) $27,600.00

B) $34,699.80

C) $47,899.80

D) $97,500.00

85) Nettle Co. uses process costing to account for the production of rubber balls. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The cost per unit for conversion costs using the FIFO method would be:

A) $8.00

B) $8.80

C) $2.20

D) $17.40

86) Nettle Co. uses process costing to account for the production of rubber balls. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The cost per unit for materials using the FIFO method would be closest to:

A) $1.8334

B) $6.0000

C) $7.1666

D) $14.5000

87) Nettle Co. uses process costing to account for the production of rubber balls. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The total cost per unit using the FIFO method would be closest to:

A) $15.9666

B) $13.8182

C) $14.0000

D) $14.5000

88) South Corp. uses a FIFO process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,000 units that were 40% completed. 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units that were 70% completed. How many units were started and completed during the period?

A) 9,500

B) 10,500

C) 11,000

D) 11,500

89) Tripper Corp. uses a FIFO process costing system. Beginning inventory for January consisted of 1,000 units that were 60% completed. 10,000 units were started into the process during January. During January, 9,500 units were started and completed. How many units were in ending inventory on January 31?

A) 1,500

B) 1,000

C) 500

D) 100

90) Harlow Corp. uses a FIFO process costing system. Beginning inventory for January consisted of 1,000 units that were 60% completed. During January, 9,500 units were started and completed. On January 31, the inventory consisted of 500 units that were 70% completed. How many units were started during January?

A) 9,850

B) 10,000

C) 10,250

D) 11,000

91) Sanger Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,000 units that were 40% completed. 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units that were 70% completed. What would be the equivalent units for conversion cost using the FIFO method?

A) 10,000

B) 10,450

C) 10,850

D) 11,000

92) Sanger Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,000 units that were 40% completed. 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units that were 70% completed. What would be the equivalent units for direct materials cost using the FIFO method?

A) 10,000

B) 10,450

C) 10,850

D) 11,000

93) Caston Corp. uses a FIFO process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,000 units that were 40% completed with respect to conversion costs. 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units. Equivalent units for conversion costs were 10,450. What percentage complete was the ending inventory on January 31 with respect to conversion costs?

A) 70%

B) 80%

C) 90%

D) 100%

94) Heathcoat Co. uses process costing to account for the production of canned vegetables. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. On April 1, there were 2,000 units in beginning inventory (80% complete). During April 10,000 units were completed. Ending in process inventory was 4,000 units (100% complete for materials, 40% for conversion). The cost per equivalent unit for conversion costs using the FIFO method would be:

A) $4.00

B) $4.40

C) $1.10

D) $8.70

95) Heathcoat Co. uses process costing to account for the production of canned vegetables. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. On April 1, there were 2,000 units in beginning inventory (80% complete). During April 10,000 units were completed. Ending in process inventory was 4,000 units (100% complete for materials, 40% for conversion). The cost per equivalent unit for materials using the FIFO method would be closest to:

A) $0.9167

B) $3.0000

C) $3.5833

D) $7.2500

96) Heathcoat Co. uses process costing to account for the production of canned vegetables. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. On April 1, there were 2,000 units in beginning inventory (80% complete). During April 10,000 units were completed. Ending in process inventory was 4,000 units (100% complete for materials, 40% for conversion). The total cost per unit using the FIFO method would be closest to:

A) $7.9833

B) $6.9091

C) $7.0000

D) $7.2500

97) The journal entry to record the issuance of direct materials into production includes:

A) a debit to Raw Materials Inventory.

B) a debit to Finished Goods Inventory.

C) a debit to Work in Process Inventory.

D) a debit to Cash.

98) The journal entry to record the purchase of direct materials includes:

A) a debit to Raw Materials Inventory.

B) a debit to Finished Goods Inventory.

C) a debit to Work in Process Inventory.

D) a debit to Cash.

99) The journal entry to record the actual (not applied) overhead costs incurred includes:

A) a debit to Manufacturing Overhead.

B) a debit to Work in Process Inventory.

C) a debit to Finished Goods Inventory.

D) a debit to Cost of Goods Sold.

100) The journal entry to record the application of overhead costs to production includes:

A) a debit to Manufacturing Overhead.

B) a debit to Work in Process Inventory.

C) a debit to Finished Goods Inventory.

D) a debit to Cost of Goods Sold.

101) The journal entry to record the completion of goods includes:

A) a debit to Conversion Costs.

B) a debit to Work in Process Inventory.

C) a debit to Finished Goods Inventory.

D) a debit to Cost of Goods Sold.

102) The journal entry to record the issuance of direct material into production includes:

A) a credit to Raw Materials Inventory.

B) a credit to Finished Goods Inventory.

C) a credit to Work in Process Inventory.

D) a credit to Cash.

103) The journal entry to record the purchase of direct materials for cash includes:

A) a credit to Raw Materials Inventory.

B) a credit to Finished Goods Inventory.

C) a credit to Work in Process Inventory.

D) a credit to Cash.

104) The journal entry to record the sale of goods includes:

A) a credit to Conversion Costs.

B) a credit to Work in Process Inventory.

C) a credit to Finished Goods Inventory.

D) a credit to Cost of Goods Sold.

105) The journal entry to record the application of overhead costs to production includes:

A) a credit to Manufacturing Overhead.

B) a credit to Work in Process Inventory.

C) a credit to Finished Goods Inventory.

D) a credit to Cost of Goods Sold.

106) The journal entry to record the completion of goods includes:

A) a credit to Conversion Costs.

B) a credit to Work in Process Inventory.

C) a credit to Finished Goods Inventory.

D) a credit to Cost of Goods Sold.

107) The production report includes information about the number of physical units, plus ________ equivalent units.

A) the number, but not the cost of

B) the cost, but not the number of

C) both the number and cost of

D) neither the number nor cost of

108) At its highest level, the production report provides what?

A) A summary of what occurred in the production process during the accounting period

B) Information about the direct and indirect materials that were part of the production process

C) A reconciliation of the budget to GAAP reporting

D) Information about the physical units contained in the production process of a manufacturing firm

109) Complete the following chart by reconciling the number of physical units for each department using the weighted-average method.

110) Complete the following chart by reconciling the number of physical units. The months listed are sequential, and for the same department.

111) Hamilton, Inc. manufactures units in two processes: Production and Finishing. All direct materials are added at the beginning of the Production process, while conversion costs are incurred evenly throughout the period for both Production and Finishing. Hamilton employs three inspectors: Kelsey, Chad, and Lexi. Kelsey inspects direct materials before they are added to Production (two pieces of direct materials per unit). Chad inspects units when the Production process is finished, after which they are immediately transferred to Finishing. Lexi inspects units at the end of the Finishing process. During the current period, none of the materials or units failed inspection. At the beginning of the period, 5,000 units had only "Inspected by Kelsey" tags on them (these units were 70% complete), and 2,000 units had "Inspected by Kelsey" and "Inspected by Chad" tags on them (these units were 60% complete). At the end of the period, 7,000 units had only "Inspected by Kelsey" tags on them (these units were 50% complete). 1,000 units had only "Inspected by Kelsey" and "Inspected by Chad" tags on them (these units were 90% complete), and 19,000 units had tags from all three inspectors on them (these units were 100% complete).

Required:

Determine the number of physical units:

a. in beginning Work in Process in Production during the period.

b. started in Production during the period.

c. transferred from Production to Finishing during the period.

d. in ending Work in Process in Production during the period.

e. in beginning Work in Process in Finishing during the period.

f. in ending Work in Process in Finishing during the period.

g. completed in Finishing during the period.

112) Kramer Corp. began the period with 5,200 units in process that were 100% complete for materials and 60% complete for conversion, and ended the period with 26,000 units completed and 6,500 units still in process. Work in process was 100% complete for materials and 70% complete for conversion costs.         

Required:

Using the weighted average method, compute the equivalent units of production for materials and conversion for the period.

113) Trout, Inc. prepared the following production report:  

Additional information: Trout adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 40% complete. At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

114) Trout, Inc. prepared the following production report:    

Additional information: Trout adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 40% complete. At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

115) Trout, Inc. prepared the following production report:       

Additional information: Trout adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 40% complete. At the end of the period, Work in Process Inventory was 70% complete.

Required:

Fill in the missing amounts.

116) Rowen, Inc. adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 50% complete. At the end of the period, Work in Process Inventory was 60% complete. Rowen, Inc. started the following production report:   

Required:

Complete the production report by filling in the missing amounts.

117) Each of the following statements describes preparing a production report using either the FIFO Method or the Weighted Average Method. List the letters that correspond to the statements that accurately describe the FIFO Method.

a. Separates units in beginning inventory from those that were started during the current period.

b. Combines the cost of beginning inventory with the costs that were incurred during the period.

c. Averages the cost of units in beginning inventory with the costs of units that were started during the period.

d. Assumes the units in beginning inventory were completed before any new units were started.

e. Combines the units in beginning inventory with the units that were started during the period.

f. Is the simpler method and more frequently used in practice.

g. May be a less accurate method, particularly for companies that hold significant inventory.

h. More closely matches the actual flow of costs in many industries.

118) Swan Corp. began work on 4,200 units this period. Work in Process Inventory was 700 at the beginning of the period (60% complete) and 1,400 at the end of the period (50% complete). Swan uses the weighted average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout the period.       

Required:

Using the weighted average method:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

119) Hamilton, Inc. manufactures units in two processes: Production and Finishing. All direct materials are added at the beginning of the Production process, while conversion costs are incurred evenly throughout the period for both Production and Finishing. Hamilton employs three inspectors: Kasey, Chad, and Lexi. Kasey inspects direct materials before they are added to Production (two pieces of direct materials per unit). Chad inspects units when the Production process is finished, after which they are immediately transferred to Finishing. Lexi inspects units at the end of the Finishing process. This period, none of the materials or units failed inspection. At the beginning of the period, 5,000 units had only "Inspected by Kasey" tags on them (these units were 70% complete), and 2,000 units had "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 60% complete). At the end of the period, 7,000 units had only "Inspected by Kasey" tags on them (these units were 50% complete). 1,000 units had only "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 90% complete), and 19,000 units had tags from all three inspectors on them (these units were 100% complete).

Required:

Determine the number of physical units using the weighted average method:

a. in beginning Work in Process in Production during the period.

b. started in Production during the period.

c. transferred from Production to Finishing during the period.

d. in ending Work in Process in Production during the period.

e. in beginning Work in Process in Finishing during the period.

f. in ending Work in Process in Finishing during the period.

g. completed in Finishing during the period.

Determine the number of equivalent units

h. for direct materials for Production

i. for conversion for Production

j. for direct materials for Finishing

k. for conversion for Finishing

120) Kramer Corp. began the current period with 4,000 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7,500 in direct materials and $4,700 in conversion costs were incurred in manufacturing those units in the previous period. Kramer ended the current period with 20,000 units completed and 5,000 units still in process. Work in process was 100% complete as to materials and 70% complete as to conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in direct labor costs, and $40,000 in manufacturing overhead costs during the period.

Required:

Using the weighted average method, compute the following:

a. Equivalent units of production for materials

b. Equivalent units of production for conversion

c. Cost per equivalent unit for materials

d. Cost per equivalent unit for conversion

e. Cost assigned to ending Work in Process Inventory

f. Cost assigned to goods completed and transferred out

121) Kramer Corp. began the current period with 4,000 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7,500 in direct materials and $4,700 in conversion costs were incurred in manufacturing those units in the previous period. Kramer ended the current period with 20,000 units completed and 5,000 units still in process. Work in process was 100% complete as to materials and 70% complete as to conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in direct labor costs, and $40,000 in manufacturing overhead costs during the period.

Required:

Using the weighted average method, compute the following:

a. Equivalent units of production for materials.

b. Equivalent units of production for conversion.

c. Cost per equivalent unit for materials.

d. Cost per equivalent unit for conversion.

122) For Salcido, Inc., the value of beginning Work in Process Inventory was $100,000, 25% of which was direct materials cost. During the period, Salcido completed work on 42,500 units, only completed 80% of the work on another 10,000 units, and incurred $80,000 in direct materials cost and $177,500 in conversion costs. Salcido adds direct materials at the beginning of their production process, and incurs conversion costs evenly throughout the process.

Required:

Calculate the following using the weighted average method for process costing.

a. Equivalent units for direct materials

b. Equivalent units for conversion costs

c. Cost per equivalent unit for direct materials

d. Cost per equivalent unit for conversion costs

e. Cost assigned to ending Work in Process Inventory

f. Cost assigned to goods completed and transferred out

123) Swan Corp. began work on 3,000 units this period. Work in Process Inventory was 500 at the beginning of the period (60% complete) and 1,000 at the end of the period (50% complete). Beginning inventory costs were $3,000 for conversion costs and $7,000 for direct materials. During the period, Swan incurred $75,000 for conversion costs and $52,500 for direct materials. Swan uses the weighted average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout the period.

Required:

Using the weighted average method:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

d. Calculate the cost per equivalent unit for direct materials.

e. Determine the cost per equivalent unit for conversion costs.

124) Swan Corp. began work on 3,000 units this period. Work in Process Inventory was 500 at the beginning of the period (60% complete) and 1,000 at the end of the period (50% complete). Beginning inventory costs were $3,000 for conversion costs and $7,000 for direct materials. During the period, Swan incurred $75,000 for conversion costs and $52,500 for direct materials. Swan uses the weighted average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout the period.

Required:

Using the weighted average method, compute:

a. How many units were completed during the period?

b. Determine the number of equivalent units for direct materials.

c. Determine the number of equivalent units for conversion costs.

d. Calculate the cost per equivalent unit for direct materials.

e. Determine the cost per equivalent unit for conversion costs.

f. Determine the cost assigned to ending Work in Process Inventory.

g. Determine the cost assigned to goods completed and transferred out.

125) Sierra Co. has provided the following information:

Using the weighted average method of process costing, complete each of the following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal places.

d. What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a whole dollar amount.

126) Vista Co. has provided the following information:  

Using the weighted average method of process costing, complete each of the following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal places.

d. What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a whole dollar amount.

127) Ridgeway Co. has provided the following information:

Using the weighted average method of process costing, complete each of the following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit. Round your answers to four decimal places.

d. What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a whole dollar amount.

128) Hamilton, Inc. manufactures units in two processes: Production and Finishing. All direct materials are added at the beginning of the Production process, while conversion costs are incurred evenly throughout the period for both Production and Finishing. Hamilton employs three inspectors: Kasey, Chad, and Lexi. Kasey inspects direct materials before they are added to Production (two pieces of direct materials per unit). Chad inspects units when the Production process is finished, after which they are immediately transferred to Finishing. Lexi inspects units at the end of the Finishing process. This period, none of the materials or units failed inspection. At the beginning of the period, 5,000 units had only "Inspected by Kasey" tags on them (these units were 70% complete), and 2,000 units had "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 60% complete). At the end of the period, 7,000 units had only "Inspected by Kasey" tags on them (these units were 50% complete). 1,000 units had only "Inspected by Kasey" and "Inspected by Chad" tags on them (these units were 90% complete), and 19,000 units had tags from all three inspectors on them (these units were 100% complete). In the Finishing Department, Hamilton incurred $38,000 in direct materials costs and $76,000 in conversion costs in the current period. Beginning Work in Process Inventory for the Finishing Department carried a value of $4,000 in direct materials and $3,600 in conversion costs.

Required:

Using the weighted average method, determine the number of physical units:

a. in beginning Work in Process in Production during the period.

b. started in Production during the period.

c. transferred from Production to Finishing during the period.

d. in ending Work in Process in Production during the period.

e. in beginning Work in Process in Finishing during the period.

f. in ending Work in Process in Finishing during the period.

g. completed in Finishing during the period.

Using the weighted average method, determine the number of equivalent units:

h. for direct materials for Production

i. for conversion for Production

j. for direct materials for Finishing

k. for conversion for Finishing

Using the weighted average method, determine the cost per equivalent unit:

l. for direct materials for Finishing

m. for conversion for Finishing

129) Griffin, Inc. manufactures units in two processes: Machining and Assembly. All direct materials are added at the beginning of the Machining process, while conversion costs are incurred evenly throughout the period for both Machining and Assembly. Goods completed in Machining are transferred to Assembly where they are completed and transferred to Finished Goods Inventory. Griffin's controller accumulated the following information about the units and costs incurred in the two processes for the current period:

Units:

Costs:

Required:

Using the weighted average method, determine the number of physical units:

a. transferred into Assembly during the period.

b. transferred from Machining to Assembly during the period.

c. started in Machining during the period.

Using the weighted average method, determine the number of equivalent units:

d. for direct materials for Machining.

e. for conversion for Machining.

f. for direct materials for Assembly.

g. for conversion for Assembly.

Using the weighted average method, determine the cost per equivalent unit (round to 5 decimals):

h. for direct materials for Assembly.

i. for conversion for Assembly.

Using the weighted average method, determine the total cost of (round to whole dollars, i.e., 0 decimals):

j. materials in the goods transferred to Finished Goods Inventory.

k. conversion costs in the goods transferred to Finished Goods Inventory.

l. the goods transferred to Finished Goods Inventory.

m. materials in ending Work in Process Assembly.

n. conversion costs in ending Work in Process Assembly.

o. ending Work in Process Assembly.

130) Sierra Co. has provided the following information:   

Using the FIFO method of process costing, complete each of the following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate equivalent units.

c. Calculate cost per equivalent unit.

d. What is the dollar amount transferred to Finished Goods?

e. Calculate the cost of the ending Work in Process.

131) Prepare the journal entries to record each of the following transactions for Jason Co.

a. Purchased $40,000 of raw materials on credit.

b. Issued $37,600 of raw materials into production.

c. Paid $28,000 cash in production labor costs.

d. Incurred $30,000 of actual overhead costs, paid in cash.

e. Applied $27,000 of overhead cost.

f. Completed 6,600 units with a cost of $13.50 per unit.

g. Sold on account 6,000 units at $18.00 per unit. The cost of the units sold was $(fill in) ________.

h. Disposed of any over- or under-applied overhead cost.

132) Prepare the journal entries to record the following transactions for Viking Co., a company that produces Viking helmets for sale to tourists.

a. Purchased $80,000 of steel (8,000 tons) in cash.

b. Issued $75,000 of steel (7,500 tons) into production.

c. Paid $15,000 cash in production labor costs.

d. Applied overhead at the predetermined rate of $5 per ton of steel.

e. Incurred $40,000 of actual overhead costs, paid in cash. (Assume any difference between actual and applied overhead costs is adjusted directly to cost of goods sold.)

f. Completed 25,000 helmets. (Approximately $27,500 of inventory remains in process, so the cost of each helmet is approximately $________.)

g. Sold 22,000 helmets at $24.00 per unit. (All proceeds were collected in cash.)

h. Disposed of any over- or under-applied overhead cost.

133) Prepare the journal entries to record the following transactions for Kilts & More, a company that produces hand-sewn kilts to Americans celebrating at Irish Festivals around the country.

a. Purchased $140,000 of material (3,500 yards) in cash.

b. Issued $120,000 of material (3,000 yards) into production.

c. Paid $45,000 cash in production labor costs.

d. Applied overhead at the predetermined rate of $12 per yard.

e. Incurred $42,000 of actual overhead costs, paid in cash. (Assume any difference between actual and applied overhead costs is adjusted directly to cost of goods sold.)

f. Completed 5,000 kilts. (Approximately $51,000 of inventory remains in process, so the cost of each kilt is approximately $______.)

g. Sold 4,500 kilts at $80.00 per unit. (All proceeds were collected in cash.)

h. Disposed of any over- or under-applied overhead cost.