Process Costing | Chapter 20 – Test Bank with Answers 24th

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Fundamental Accounting Principles, 24e (Wild)

Chapter 20 Process Costing

1) The managers of process operations focus on the series of repetitive processes, or steps, resulting in a noncustomized product or service.

2) Manufacturers that utilize process operations produce large quantities of identical products.

3) In a process costing system costs are only measured upon completion of each job.

4) The cost object in a process costing system is the specific job.

5) Equivalent units of production is the number of units that could have been started and completed given the costs incurred during the period.

6) In a process costing system, companies typically end each period with only Finished Goods Inventory.

7) Equivalent units of production are always the same as the total number of physical units finished during the period.

8) Equivalent units of production for direct materials and direct labor are always the same.

9) Equivalent units of production is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.

10) Conversion cost per equivalent unit is the combined costs of direct materials and factory overhead.

11) Conversion cost per equivalent unit is the combined costs of direct labor and factory overhead.

12) The process cost summary is an important managerial accounting report prepared for each process or production department.

13) A process cost summary is an accounting report that describes the costs charged to each department, the equivalent units of production by each department, and determining the costs assigned to each department's output.

14) A process cost summary usually does not include the number of equivalent units of production for the period.

15) A process cost summary shows the cost of a particular job manufactured in the reporting period.

16) The FIFO method of computing equivalent units focuses on production activity in the current period only.

17) If a department that uses process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, the equivalent units of direct labor in beginning Work in Process are 20,000.

18) The FIFO method of computing equivalent units includes the beginning inventory costs in computing the cost per equivalent unit for the current period.

19) The FIFO method of computing equivalent units excludes the beginning inventory costs in computing the cost per equivalent unit for the current period.

20) Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

21) Process costing systems use separate Work in Process Inventory accounts for each process.

22) The term "process costing system" refers to the number of trained individuals and computers required to process the collected cost information.

23) Process costing typically uses only one Work in Process Inventory account, while job order costing typically uses a separate Work in Process Inventory account for each department.

24) A production department is an organizational unit that has the responsibility for the complete processing of one particular product.

25) In a process costing system, with the exception of the first department, each department receives output from the prior department as a partially processed product.

26) In process costing the cost object is the process and in job order costing the cost object is a job.

27) Process costing is applied to operations with customized products.

28) Process costing is applied to operations with repetitive production and noncustomized products.

29) In a process operation, all labor that is used exclusively by a single production department is considered direct labor.

30) Process costing systems consider overhead costs to include those costs that cannot be tied to individual processes.

31) Companies that use a series of repetitive manufacturing processes to produce standardized products likely use a process costing system.

32) Process costing systems are used only by companies that manufacture physical products; companies that provide services do not use process costing.

33) Process costing systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps.

34) The use of process costing is of little benefit to a service provider.

35) In process costing, the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

36) Conversion cost per equivalent unit is the combined cost of direct labor and factory overhead per equivalent unit.

37) Conversion cost per equivalent unit is the combined cost of direct materials, direct labor, and factory overhead per equivalent unit.

38) When direct labor and overhead enter the production process at different rates, it is appropriate to use a conversion cost per equivalent unit.

39) When direct labor and overhead enter the production process at the same rates, it is appropriate to use a conversion cost per equivalent unit.

40) In process costing, indirect materials are clearly linked with a specific production process or department.

41) Hybrid systems contain features of both process and job order operations.

42) Hybrid costing systems can only be applied to manufacturing.

43) In a process costing system, the purchase of raw materials is credited to Raw Materials Inventory.

44) In a process costing system, the purchase of raw materials is debited to Raw Materials Inventory.

45) In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

46) In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Work in Process Inventory account for that department and a credit to the Raw Materials Inventory account.

47) A materials consumption report is used instead of materials requisitions in companies where materials move continuously through the manufacturing process.

48) If Department C uses $10,000 of direct materials and Department D uses $15,000 of direct materials, the following journal entry would be recorded by the process costing system:

49) Process costing systems use a single Work in Process Inventory account regardless of the number of production departments that exist.

50) If Department R uses $60,000 of direct materials and Department S uses $15,000 of direct materials, the following journal entry would be recorded by the process costing system:

51) If Grayson Manufacturing incurred $17,400 for direct labor in the assembly department and $10,300 for direct labor in the painting department, the journal entry to record the labor used is:

52) If the indirect labor cost in August for clerical and maintenance that help production in all departments was $123,000, the following journal entry would be recorded in a process costing system:

53) In process costing, direct labor includes only the labor that is applied directly to individual units of product.

54) In some circumstances, a process costing system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

55) In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

56) The following journal entry would be made to record the use of $6,100 of direct labor in a production department during the reporting period:

57) If Department L uses $53,000 of direct labor and Department M uses $21,000 of direct labor, the following journal entry would be recorded using a process costing system:

58) In a process costing system, factory overhead costs are allocated to production departments by using a predetermined overhead allocation rate.

59) If indirect materials costing $37,500 that were not clearly linked with any specific production process or department were used during a reporting period, the following journal entry would be recorded in the process costing system:

60) In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

61) In process costing, all indirect materials are charged directly to Work in Process Inventory.

62) A process costing system records all factory overhead costs incurred directly in the Work in Process Inventory accounts.

63) If the predetermined overhead allocation rate is 250% of direct labor cost and the Finishing Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:

64) If the predetermined overhead allocation rate is 75% of direct labor cost, and the Assembly Department's direct labor cost for the reporting period is $20,000, the following entry would be made to record the allocation of overhead to the products processed in this department:

65) If the predetermined overhead allocation rate is 245% of direct labor cost, and the Baking Department's direct labor cost for the reporting period is $10,000, the following entry would be made to record the allocation of overhead to the products processed in this department:

66) The number of equivalent units of production assigned to ending Work in Process inventory should be equal to or less than the number of physical units in ending Work in Process inventory.

67) In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 800 equivalent finished units with respect to direct labor.

68) If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor must also be 100.

69) Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

70) If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

71) If a department that applies process costing starts the reporting period with 40,000 physical units that were 80% complete with respect to direct materials and 50% complete with respect to direct labor, it must add 8,000 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

72) One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the direct materials and conversion costs per equivalent unit.

73) A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

74) The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending Work in Process inventory.

75) Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

76) The cost of units transferred from Work in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.

77) The Finishing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry:

78) Which of the following products is least likely to be produced in a process operation?

A) Smartphones

B) Slacks for casual wear

C) Baseball caps

D) Calculators

E) Custom cabinets

79) Which of the following products is most likely to be produced in a process operation?

A) Airplanes

B) Cereal

C) Bridges

D) Designer bridal gowns

E) Custom cabinets

80) Which of the following characteristics does not usually apply to process operations?

A) Each unit of product is separately identifiable.

B) Partially completed products are transferred between processes.

C) Each process is a separate department.

D) A separate Work in Process Inventory is used for each process.

E) Costs are computed using equivalent units.

81) Yamada Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Yamada had $125,000 of direct labor cost, and in the Finishing Department, Yamada had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:

A) Debit Factory Overhead—Assembly $112,500; debit Factory Overhead—Finishing $31,500; credit Work in Process Inventory $144,000.

B) Debit Factory Overhead $144,000; credit Work in Process Inventory—Assembly $112,500; credit Work in Process—Finishing $31,500.

C) Debit Factory Overhead $144,000; credit Factory Wages Payable $144,000.

D) Debit Work in Process Inventory—Assembly $112,500; debit Work in Process Inventory—Finishing $31,500; credit Factory Overhead $144,000.

E) Debit Factory Wages Payable $144,000; credit Cash $144,000.

82) Clarksen Company uses a process costing system. The company requisitioned $93,000 of materials for Department A and $67,000 of materials for Department D. The entry to record the use of the direct materials by these two departments is:

A) Debit Raw Materials Inventory $160,000; credit Accounts Payable $160,000.

B) Debit Work in Process Inventory—Dept. A $93,000; debit Work in Process Inventory—Dept. D $67,000; credit Raw Materials Inventory $160,000.

C) Debit Factory overhead $160,000; credit Raw Materials Inventory $160,000.

D) Debit Raw Materials Inventory—Dept. A $93,000; debit Raw Materials Inventory—Dept. D $67,000; credit Work in Process Inventory $160,000.

E) Debit Work in Process Inventory—Dept. A $93,000; debit Work in Process Inventory—Dept. D $67,000; credit Accounts Payable $160,000.

83) Which of the following characteristics does not apply to job order cost accounting?

A) Aims to compute the cost per unit of product.

B) Identifiable units of production.

C) Equivalent units of production.

D) Use of job cost sheets.

E) Use of a single Work in Process Inventory account.

84) A key idea in process costing that refers to the number of units that could have been started and completed given the costs incurred during the period is known as:

A) Manufacturing overhead.

B) Units in process.

C) A job cost sheet.

D) Equivalent units of production.

E) Process cost summary.

85) Equivalent units of production are equal to:

A) The number of units that could have been started and completed given the costs incurred during the period.

B) The number of finished units actually produced during a period.

C) The number of units started into the process during a period.

D) The number of units still in process at the end of a period.

E) Physical units that were started and completed during a period.

86) Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?

A) In most manufacturing environments, it is not possible to conduct a physical count of units.

B) Companies often use a combination of a process costing and job order costing systems.

C) In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process.

D) All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period.

E) In most cases, there is no difference between physical units and equivalent units of production.

87) The combined costs of direct labor and factory overhead per equivalent unit used by many businesses with process operations is called:

A) Physical cost per equivalent unit

B) Overhead cost per equivalent unit

C) Combined cost per equivalent unit

D) Conversion cost per equivalent unit

E) Finished cost per equivalent unit

88) Using conversion cost per equivalent unit is appropriate for many businesses that use process costing because:

A) Direct materials and direct labor are usually entered into the production process at the same rate.

B) All manufacturing costs are entered into the production process in the same period.

C) Equivalent cost per unit is not sufficient measurement of production activity.

D) The weighted average method of calculating equivalent units requires it.

E) Direct labor and factory overhead enter the production process at the same rate.

89) Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

A) Determine over or underapplied overhead.

B) Determine the physical flow of units.

C) Compute the equivalent units of production.

D) Compute the cost per equivalent unit of production.

E) Assign and reconcile costs.

90) Which of the following statements is most accurate?

A) In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials.

B) The FIFO method includes the cost of the beginning Work in Process inventory account in calculating cost per equivalent units.

C) The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory.

D) The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period.

E) It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods.

91) A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

A) 10,000 units.

B) 10,300 units.

C) 15,000 units.

D) 15,300 units.

E) 10,700 units.

92) A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

A) 6,500 units.

B) 9,000 units.

C) 13,000 units.

D) 5,500 units.

E) 10,500 units.

93) The Fabricating Department started the current month with a beginning Work in Process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:

A) $13,000.

B) $56,000.

C) $59,000.

D) $110,000.

E) $165,000.

94) A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 30,000 units, 75% complete with respect to direct labor and overhead. The department completed and transferred out 127,500 units this period. The ending inventory consists of 20,000 units that are 25% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

A) $0.14.

B) $0.16.

C) $0.18.

D) $0.30.

E) $0.37.

95) A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

A) 88,000.

B) 74,000.

C) 76,000.

D) 92,000.

E) 96,000.

96) A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor. A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

A) 46,000.

B) 100,000.

C) 76,000.

D) 90,000.

E) 116,000.

97) The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production with respect to conversion for August using the weighted-average inventory method.

A) 758,000

B) 800,000

C) 620,000

D) 746,000

E) 884,000

98) At the beginning of the recent period, there were 900 units of product in a department, 35% completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:

A) 5,000 units.

B) 5,900 units.

C) 6,100 units.

D) 5,500 units.

E) 6,700 units.

99) A company uses the weighted average method for inventory costing. During a period, Department B finished and transferred 50,000 units to Department C. Also in Department B during the period, 10,000 units were started but brought only to a stage of being 60% completed. The number of equivalent units produced by Department B during the period was:

A) 44,000 units.

B) 50,000 units.

C) 54,000 units.

D) 56,000 units.

E) 60,000 units.

100) Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

A) 3,200 units.

B) 3,000 units.

C) 3,400 units.

D) 3,160 units.

E) 3,500 units.

101) Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. Calculate the equivalent units of production for the year:

A) 3,200 units.

B) 3,320 units.

C) 3,240 units.

D) 3,520 units.

E) 3,800 units.

102) A company uses a process costing system. Its Weaving Department completed and transferred out 120,000 units during the current period. The ending inventory in the Weaving Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to conversion costs).

Determine the equivalent units of production for the Weaving Department for direct materials and conversion costs assuming the weighted average method.

A) 120,000 materials; 120,000 conversion.

B) 120,000 materials; 160,000 conversion.

C) 128,000 materials; 120,000 conversion.

D) 128,000 materials; 144,000 conversion.

E) 128,000 materials; 184,000 conversion.

103) A company uses a process costing system. Its Welding Department completed and transferred out 100,000 units during the current period. The ending inventory in the Welding Department consists of 30,000 units (75% complete with respect to direct materials and 40% complete with respect to conversion costs).

Determine the equivalent units of production for the Welding Department for direct materials and conversion costs assuming the weighted average method.

A) 130,000 materials; 130,000 conversion.

B) 130,000 materials; 112,000 conversion.

C) 107,500 materials; 118,000 conversion.

D) 122,500 materials; 112,000 conversion.

E) 112,500 materials; 130,000 conversion.

104) A process cost summary is a managerial accounting report that describes all but which of the following:

A) The gross profit earned on the sale of products.

B) The equivalent units of production by the department.

C) How the costs were assigned to the output.

D) Physical transfers for a department.

E) The costs charged to a department.

105) At the beginning of the month, the Forming Department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

A) 68,400 materials; 66,800 conversion.

B) 58,400 materials; 56,800 conversion.

C) 59,000 materials; 61,000 conversion.

D) 65,400 materials; 66,800 conversion.

E) 65,400 materials; 65,800 conversion.

106) At the beginning of the month, the Painting Department of Skye Manufacturing had 20,000 units in inventory, 70% complete as to materials, and 20% complete as to conversion. During the month the department started 115,000 units and transferred 120,000 units to the next manufacturing department. At the end of the month, the department had 15,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Painting Department.

A) 126,000 materials; 121,500 conversion.

B) 112,000 materials; 117,500 conversion.

C) 126,000 materials; 117,500 conversion.

D) 121,500 materials; 126,000 conversion.

E) 112,000 materials; 121,500 conversion.

107) At the beginning of the month, the Painting Department of Skye Manufacturing had 20,000 units in inventory, 70% complete as to materials, and 20% complete as to conversion. The cost of the beginning inventory, $28,650, consisted of $22,400 of material costs and $6,250 of conversion costs. During the month the department started 115,000 units and transferred 120,000 units to the next manufacturing department. Costs added in the current month consisted of $229,600 of materials costs and $540,500 of conversion costs. At the end of the month, the department had 15,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

A) $2.00; $4.50.

B) $1.82; $4.45.

C) $2.05; $4.60.

D) $2.05; $4.45.

E) $2.25; $4.65.

108) Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the equivalent units of materials.

A) 165,000

B) 144,000

C) 140,000

D) 130,250

E) 110,000

109) Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the equivalent units of conversion.

A) 165,000

B) 130,250

C) 140,000

D) 144,000

E) 110,000

110) Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the cost per equivalent unit of materials.

A) $2.00

B) $2.05

C) $1.74

D) $2.36

E) $2.61

111) Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the cost per equivalent unit of conversion.

A) $4.60

B) $4.50

C) $4.16

D) $4.98

E) $5.45

112) Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of materials.

A) 250,000

B) 317,000

C) 294,000

D) 333,000

E) 342,000

113) Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of conversion.

A) 250,000

B) 317,000

C) 294,000

D) 333,000

E) 342,000

114) Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the cost per equivalent unit of materials.

A) $2.59

B) $2.33

C) $1.89

D) $2.20

E) $2.00

115) Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the cost per equivalent unit of conversion.

A) $2.76

B) $3.15

C) $3.68

D) $2.90

E) $3.00

116) Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.

Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).

Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).

If Pitt Enterprises uses the weighted average method of process costing, compute the equivalent units for direct materials and conversion respectively for May.

A) 225,000 materials; 195,000 conversion.

B) 275,000 materials; 215,000 conversion.

C) 150,000 materials; 150,000 conversion.

D) 195,000 materials; 225,000 conversion.

E) 195,000 materials; 195,000 conversion.

117) Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.

Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).

Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).

 If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and conversion respectively for May.

A) 225,000 materials; 195,000 conversion.

B) 275,000 materials; 215,000 conversion.

C) 150,000 materials; 150,000 conversion.

D) 195,000 materials; 225,000 conversion.

E) 195,000 materials; 195,000 conversion.

118) Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.

Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).

Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).

If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May.

A) $1.52; $1.81.

B) $1.50; $1.76.

C) $1.83; $1.72.

D) $1.71; $1.81.

E) $3.30; $3.30.

119) At the beginning of the month, the Forming Department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. How many units did the Forming Department start and complete in the current month?

A) 62,000

B) 60,000

C) 58,000

D) 68,000

E) 52,000

120) At the beginning of the month, the Forming Department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the FIFO method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

A) 68,400 materials; 66,800 conversion.

B) 58,400 materials; 56,800 conversion.

C) 59,000 materials; 61,000 conversion.

D) 65,400 materials; 66,800 conversion.

E) 65,400 materials; 65,800 conversion.

121) Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the equivalent units of materials.

A) 165,000

B) 144,000

C) 140,000

D) 130,250

E) 110,000

122) Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the equivalent units of conversion.

A) 165,000

B) 130,250

C) 140,000

D) 144,000

E) 110,000

123) Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the cost per equivalent unit of materials.

A) $2.00

B) $2.05

C) $1.74

D) $2.36

E) $2.61

124) Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:

Units:

Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.

Units started and completed: 110,000.

Units completed and transferred out: 135,000.

Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $43,000.

Costs in beginning Work in Process - Conversion: $48,850.

Costs incurred in February - Direct Materials: $287,000.

Costs incurred in February - Conversion: $599,150.

Calculate the cost per equivalent unit of conversion.

A) $5.45

B) $4.50

C) $4.16

D) $4.98

E) $4.60

125) Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of materials.

A) 250,000

B) 317,000

C) 294,000

D) 333,000

E) 342,000

126) Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of conversion.

A) 250,000

B) 317,000

C) 294,000

D) 333,000

E) 342,000

127) Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the cost per equivalent unit of materials.

A) $2.59

B) $2.33

C) $1.89

D) $2.20

E) $2.00

128) Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:

Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.

Units started and completed: 250,000.

Units completed and transferred out: 330,000.

Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:

Costs in beginning Work in Process - Direct Materials: $37,200.

Costs in beginning Work in Process - Conversion: $79,700.

Costs incurred in October - Direct Materials: $646,800.

Costs incurred in October - Conversion: $919,300.

Calculate the cost per equivalent unit of conversion.

A) $2.76

B) $3.15

C) $2.90

D) $3.68

E) $3.00

129) The following data are available for a company's manufacturing activities:

If materials are added when the production process begins and conversion costs are applied uniformly throughout the process, what are the equivalent units for direct materials and for conversion, respectively using the FIFO method of process costing?

A) 16,250 materials; 19,250 conversion.

B) 16,250 materials; 21,750 conversion.

C) 21,000 materials; 19,250 conversion.

D) 19,250 materials; 18,750 conversion.

E) 21,000 materials; 22,250 conversion.

130) A system of accounting in which costs are accumulated and then measured per unit at the end of a period by combining costs per equivalent unit from various departments is a:

A) General cost accounting system.

B) Process costing system.

C) Job order cost accounting system.

D) Manufacturing cost accounting system.

E) Work in Process accounting system.

131) A company that applies process costing is most frequently characterized by:

A) Low standardization and high production volume.

B) Custom orders and mass production.

C) Repetitive production and unique products.

D) Repetitive production and low production volume.

E) Similar products and high production volume.

132) An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:

A) Production department.

B) Service department.

C) Primary department.

D) Responsibility department.

E) Control department.

133) A hybrid costing system would be most appropriate when:

A) A manufacturer is able to standardize processes while at the same time attempting to meet individual customer needs.

B) Large quantities of identical products are being produced.

C) The volume of production is low and costs are high.

D) There is no standardization of units of production.

E) All the products produced are unique.

134) In a process costing system, direct material costs incurred are recorded:

A) Indirectly to a Work in Process Inventory account from Factory Overhead.

B) Indirectly to a Finished Goods Inventory account from Factory Overhead.

C) Directly to a Work in Process Inventory account.

D) Directly to a Finished Goods Inventory account.

E) Directly to a Cost of Goods Sold account.

135) The purchase of raw materials on account in a process costing system is recorded with a:

A) Debit to Purchases and credit to Cash.

B) Debit to Purchases and a credit to Accounts Payable.

C) Debit to Raw Materials Inventory and a credit to Accounts Payable.

D) Debit to Accounts Payable and a credit to Raw Materials Inventory.

E) Debit to Work in Process Inventory and a credit to Accounts Payable.

136) When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:

A) A debit to Work in Process Inventory.

B) A debit to Accounts Payable.

C) A credit to Cash.

D) A debit to Raw Materials Inventory.

E) A credit to Raw Materials Inventory.

137) Direct labor and indirect labor are recorded, respectively, to:

A) Factory Overhead and Work in Process Inventory.

B) Work in Process Inventory and Finished Goods Inventory.

C) Finished Goods Inventory and Work in Process Inventory.

D) Work in Process Inventory and Factory Overhead.

E) Cost of Goods Sold and Finished Goods Inventory.

138) Wilturner Company incurs $97,000 of labor related directly to the product in the Assembly Department, and $10,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:

A) $74,000 and $33,000.

B) $97,000 and $10,000.

C) $84,000 and $23,000.

D) $107,000 and $0.

E) $74,000 and $10,000.

139) Wilturner Company incurs $82,000 of labor related directly to the product in the Assembly Department, $31,000 of labor related to the Assembly Department as a whole, and $18,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor for the Assembly Department would include:

A) Debit Work in Process Inventory $82,000; debit Factory Overhead $49,000.

B) Debit Work in Process Inventory $82,000; debit Wages Expense $49,000.

C) Debit Work in Process Inventory $113,000; debit Wages Expense $18,000.

D) Debit Work in Process Inventory $131,000.

E) Debit Work in Process Inventory $113,000; debit Factory Overhead $18,000.

140) In a process operation, the direct labor of a production department includes:

A) All labor used exclusively by that department, even if the labor is not applied to the product itself.

B) All labor used exclusively by that department, but only if the labor is applied to the product itself.

C) All labor for that department, including labor for services that help more than one production department, such as clerical, repair, and computer technicians.

D) Only labor that helps more than one production department, such as clerical, repair, and computer technicians.

E) Only labor that relates to goods finished during the period.

141) All of the following are true about using a predetermined overhead rate to apply overhead except, 

A) Estimates are used to calculate the rate.

B) Using this rate provides managers with up-to-date estimates of the costs of their processes during the period.

C) A single allocation basis may fail to provide useful allocations for all production departments.

D) The rate is prepared at the beginning of the period.

E) The rate is used to apply overhead at the end of the accounting period.

142) In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to:

A) the Finished Goods Inventory account.

B) the Cost of Goods Sold account.

C) the Work in Process Inventory account.

D) the Manufacturing Overhead account.

E) the Raw Materials Inventory account.

143) To compute equivalent units of production, one must be able to reasonably estimate:

A) The percentage of completion.

B) Units completed.

C) Units started and completed.

D) Direct labor cost.

E) Materials cost.

144) The following is an account for a production department, showing its costs for one month:

Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $41,850, what was the cost of completing the units in the beginning Work in Process inventory?

A) $12,150.

B) $2,160.

C) $7,560.

D) $54,000.

E) $37,260.

145) Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075. The complete journal entry to be made by Wyman at the time of this sale is:

A) Debit Accounts Receivable $1,075; credit Sales $1,075; debit Cost of Goods Sold $800; credit Finished Goods Inventory $800.

B) Debit Accounts Receivable $1,075; credit Sales $275; credit Finished Goods Inventory $800.

C) Debit Cost of Goods Sold $1,075; credit Sales $1,075.

D) Debit Finished Goods Inventory $800; debit Sales $1,075; credit Accounts Receivable $1,075; credit Cost of Goods Sold $800.

E) Debit Accounts Receivable $1,075; debit Selling expense $800; credit Sales $1,075; credit Cost of Goods Sold $800.

146) Luker Corporation uses a process costing system. The company had $160,500 of beginning Finished Goods Inventory on October 1. It transferred in $837,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $158,200. The entry to account for the cost of goods sold in October is:

A) Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000.

B) Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300.

C) Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000.

D) Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200.

E) Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300.

147) Luker Corporation uses a process costing system. The company had $160,500 of beginning Finished Goods Inventory on October 1. It transferred in $837,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $158,200. The entry to account for the cost of goods manufactured during October is:

A) Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000.

B) Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300.

C) Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000.

D) Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200.

E) Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300.

148) Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

A) Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000.

B) Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000.

C) Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000.

D) Debit Work in Process Inventory $87,000; credit Raw Materials Inventory $87,000.

E) Debit Work in Process Inventory $87,000; credit Cost of Goods Sold $87,000.

149) Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is:

A) Debit Factory Wages Payable $160,000; credit Cash $160,000.

B) Debit Work in Process Inventory $160,000; credit Factory Wages Payable $160,000.

C) Debit Cost of Goods Sold $160,000; credit Factory Wages Payable $160,000.

D) Debit Work in Process Inventory $160,000; credit Raw Materials Inventory $160,000.

E) Debit Work in Process Inventory $160,000; credit Cash $160,000.

150) Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is:

A) Debit Factory Overhead $248,000; credit Cash $248,000.

B) Debit Work in Process Inventory $160,000; credit Factory Wages $160,000.

C) Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.

D) Debit Work in Process Inventory $160,000; credit Factory Overhead $160,000.

E) Debit Work in Process Inventory $160,000; credit Cash $160,000.

151) Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transferred from production to finished goods is:

A) Debit Finished Goods Inventory $432,000; credit Work in Process Inventory $432,000.

B) Debit Work in Process Inventory $444,000; credit Finished Goods Inventory $444,000.

C) Debit Work in Process Inventory $432,000; credit Finished Goods Inventory $432,000.

D) Debit Finished Goods Inventory $444,000; credit Work in Process Inventory $444,000.

E) Debit Work in Process Inventory $432,000; credit Cash $432,000.

152) Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is:

A) Debit Accounts Receivable $810,000; credit Cost of Goods Sold $810,000.

B) Debit Accounts Receivable $810,000; credit Sales $366,000; credit Finished Goods Inventory $444,000.

C) Debit Cost of Goods Sold $444,000; credit Sales $444,000.

D) Debit Finished Goods Inventory $444,000; debit Sales $810,000; credit Accounts Receivable $810,000; credit Cost of Goods Sold $444,000.

E) Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.

153) Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department:

The cost per equivalent unit of production for conversion is:

A) $9.26

B) $4.21

C) $5.85

D) $5.05

E) $4.97

154) Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department:

The cost per equivalent unit of production for direct materials is:

A) $9.26

B) $4.21

C) $4.97

D) $5.05

E) $5.85

155) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of physical units transferred to finished goods.

A) 110,000.

B) 135,000.

C) 105,000.

D) 165,000.

E) 144,000.

156) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the weighted-average method.

A) 165,000 materials; 165,000 conversion.

B) 135,000 materials; 119,000 conversion.

C) 140,000 materials; 130,250 conversion.

D) 165,000 materials; 144,000 conversion.

E) 144,000 materials; 144,000 conversion.

157) During November, the production department of a process operations system completed and transferred to finished goods 35,000 units that were in process at the beginning of November and 110,000 units that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of November, 40,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units with respect to materials for November using the weighted-average method.

A) 145,000.

B) 40,000.

C) 105,000.

D) 112,000.

E) 185,000.

158) During November, the production department of a process operations system completed and transferred to finished goods 35,000 units that were in process at the beginning of November and 110,000 that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of November, 40,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units with respect to conversion for November using the weighted-average method.

A) 145,000.

B) 157,000.

C) 55,500.

D) 83,500.

E) 185,000.

159) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. The production department incurred direct materials cost of $253,000 and its beginning inventory included materials cost of $93,500. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

A) $1.53.

B) $2.48.

C) $2.10.

D) $2.57.

E) $2.40.

160) During April, the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April. April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor. At the end of April, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor. The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

A) $4.03.

B) $3.05.

C) $2.38.

D) $3.16.

E) $2.57.

161) During December, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product. At the end of March, 15,000 additional units were in process in the production department and were 80% complete with respect to materials. The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

A) $3.70.

B) $2.38.

C) $2.82.

D) $3.12.

E) $4.79.

162) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. The production department incurred direct labor cost of $578,900 and its beginning inventory included labor cost of $54,700. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

A) $4.69.

B) $3.84.

C) $4.86.

D) $4.28.

E) $4.40.

163) During July, the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July. July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of July, 15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor. The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

A) $1.72.

B) $5.60.

C) $0.84.

D) $5.02.

E) $5.85.

164) During January, the production department of a process operations system completed and transferred to finished goods a total of 78,000 units. At the end of January, 9,000 additional units were in process in the production department and were 65% complete with respect to labor. The beginning inventory included labor cost of $37,100 and the production department incurred direct labor cost of $294,300 during January. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

A) $6.34.

B) $3.77.

C) $3.51.

D) $4.25.

E) $3.95.

165) Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.

 The total materials costs transferred out of the Canning Department equals:

A) $135,500.

B) $136,000.

C) $176,500.

D) $176,150.

E) $196,000.

166) Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.

The total conversion costs transferred out of the Canning Department equals:

A) $243,040.

B) $242,800.

C) $183,100.

D) $176,150.

E) $196,000.

167) Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.

If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

A) Work in Process—Labeling $135,500; Work in Process—Canning $135,500.

B) Work in Process—Labeling $176,500; Work in Process—Canning $176,500.

C) Finished Goods—Labeling $135,500; Finished Goods—Canning $135,500.

D) Work in Process—Labeling $176,500; Finished Goods—Canning $176,500.

E) Finished Goods $136,000; Work in Process $136,000.

168) Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.

If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?

A) Work in Process—Labeling $183,100; Work in Process—Canning $183,100.

B) Work in Process—Labeling $196,000; Work in Process—Canning $196,000.

C) Finished Goods—Labeling $183,100; Finished Goods—Canning $183,100.

D) Work in Process—Labeling $196,000; Finished Goods—Canning $196,000.

E) Finished Goods $242,800; Work in Process $242,800.

169) Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were completed and transferred out as finished goods during the month. The ending Work in Process inventory consists of 36,000 equivalent units of direct materials and 36,000 equivalent units of conversion costs. The amount that should be reported in ending Work in Process Inventory is:

A) $93,600.

B) $135,000.

C) $1,816,100.

D) $1,587,500.

E) $228,600.

170) Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were completed and transferred out as finished goods during the month, and 36,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

A) $650,000.

B) $135,000.

C) $1,816,100.

D) $1,587,500.

E) $228,600.

171) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the FIFO method.

A) 165,000 materials; 165,000 conversion.

B) 135,000 materials; 119,000 conversion.

C) 140,000 materials; 130,250 conversion.

D) 165,000 materials; 144,000 conversion.

E) 144,000 materials; 144,000 conversion.

172) A company uses the weighted average method for inventory costing. At the beginning of a period the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the number of equivalent units produced by the department.

A) 181,500.

B) 165,000.

C) 173,500.

D) 145,000.

E) 187,000.

173) A company uses the FIFO method for inventory costing. At the beginning of a period, the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. Compute the number of equivalent units produced by the department.

A) 181,500.

B) 165,000.

C) 173,500.

D) 145,000.

E) 187,000.

174) A company uses the weighted average method for inventory costing. At the start of a period the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. The production department had conversion costs in the beginning goods is process inventory of $99,000 and total conversion costs added during the period are $726,825. Compute the conversion cost per equivalent unit.

A) $4.40.

B) $4.76.

C) $4.19.

D) $4.55.

E) $4.61.

175) A company uses the FIFO method for inventory costing. At the start of the period the production department had 20,000 units in beginning Work in Process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 75% complete. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor.

A) $4.40.

B) $4.76.

C) $4.19.

D) $4.55.

E) $4.61.

176) A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 100% complete for materials and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and conversion $5.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period.

A) $146,575.

B) $176,000.

C) $87,725.

D) $93,775.

E) $132,000.

177) Match the following terms with the definitions.

________ (1) Equivalent units of production

________ (2) Job order costing system

________ (3) Hybrid costing system

________ (4) Process operations

________ (5) Process costing system

________ (6) Materials consumption report

________ (7) Process cost summary

A. Costing system that measures costs per unit upon completion of a job.

B. Document that summarizes the materials a department uses when inventory moves continuously through the manufacturing process during a reporting period; replaces materials requisition.

C. Report of total costs charged to a department, describes its equivalent units of production achieved, and allocates costs among units worked on in the period.

D. A manufacturing system that contains features of both process costing and job order costing systems.

E. Number of units that could have been started and completed given the costs incurred during the period.

F. System of measuring unit costs at the end of a period by combining costs per equivalent unit from each separate department.

G. Mass production of similar products in a continuous flow of sequential processes.

178) What is meant by equivalent units of production, and why are they important when a process costing system is used?

179) What are the four steps in accounting for production activity in a period?

180) Why is the Process Cost Summary important to management and how does the Process Cost Summary accomplish its purposes?

181) Briefly explain the conditions under which job order cost accounting systems and process costing systems are commonly applied.

182) Job order costing and process costing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

183) What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

184) Describe the flow of materials in a process costing system, including accounts used.

185) Describe the flow of labor in a process costing system, including accounts used.

186) Describe the flow of overhead costs in a process costing system, including accounts used.

187) A company's January 1 Work in Process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.

188) Sutton Company uses a process costing system. In May, 80,000 units were finished and transferred to finished goods. Ending Work in Process included 20,000 unfinished units 30% complete. Calculate the equivalent units of production for the year using the weighted average method.

189) The following data is available for Donaldson Corp. for the current year:

Beginning inventory of Work in Process 12,000 units, 60% completed

Ending inventory of Work in Process 18,000 units, 30% completed

Units completed and transferred to

finished goods during the year 144,000 units

Calculate the equivalent units of production for the year using the weighted average method.

190) A company uses a process costing system and the weighted average method for inventory costs. The following information is available regarding direct labor for the current year:

Work in Process, January 1 5,500 units, 80% complete

Work in Process, December 31 8,800 units, 40% complete

Units completed and transferred to

finished goods 46,900 units

Direct labor costs during the year $266,300

(a) Calculate the equivalent units of production for direct labor for the year.

(b) Calculate the cost per equivalent unit for direct labor (round to the nearest cent).

191) A company uses a process costing system and the weighted average method for inventory costs. The following information is available regarding conversion activities for the current year:

Work in Process, January 1 5,500 units, 80% complete

Work in Process, December 31 7,800 units, 50% complete

Units completed and transferred to finished goods 46,900 units

Calculate the equivalent units of production for conversion costs for the year.

192) A company uses a process costing system and the weighted average method for inventory costs. The following information is available regarding direct labor for the current year:

Ending Work in Process 5,300 units, 50% complete

Units completed and transferred to finished goods 28,700 units

Direct labor costs during the year $199,300

Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

193) Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the FIFO method of inventory costing.

Beginning Work in Process inventory:

Physical units…………………………………………... 5,000 units

% complete for materials………………………………. 70%

% complete for labor and overhead……………………. 25%

Materials cost from May……………………………….. $7,350

Labor and overhead cost from May……………………. $3,125

Product started and completed:

Physical units…………………………………………… 40,000 units

Ending Work in Process inventory:

Physical units………………………………………….... 4,000 units

% complete for materials………………………………. 40%

% complete for labor and overhead……………………. 10%

Manufacturing costs for June:

Materials………………………………………………… $96,975

Labor and overhead……………………………………... $79,470

Compute equivalent units for direct materials, direct labor and overhead for June.

194) Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the FIFO method of inventory costing.

Beginning Work in Process inventory:

Physical units…………………………………………... 5,000 units

% complete for materials………………………………. 70%

% complete for labor and overhead……………………. 25%

Materials cost from May……………………………….. $7,350

Labor and overhead cost from May……………………. $3,125

Product started and completed:

Physical units…………………………………………… 40,000 units

Ending Work in Process inventory:

Physical units………………………………………….... 4,000 units

% complete for materials………………………………. 40%

% complete for labor and overhead……………………. 10%

Manufacturing costs for June:

Materials………………………………………………… $96,975

Labor and overhead……………………………………... $79,470

Compute the equivalent cost per unit for direct materials, direct labor and overhead for June.

195) Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the FIFO method of inventory costing.

Beginning Work in Process inventory:

Physical units…………………………………………... 5,000 units

% complete for materials………………………………. 70%

% complete for labor and overhead……………………. 25%

Materials cost from May……………………………….. $7,350

Labor and overhead cost from May……………………. $3,125

Product started and completed:

Physical units…………………………………………… 40,000 units

Ending Work in Process inventory:

Physical units………………………………………….... 4,000 units

% complete for materials………………………………. 40%

% complete for labor and overhead……………………. 10%

Manufacturing costs for June:

Materials………………………………………………… $96,975

Labor and overhead……………………………………... $79,470

Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending Work in Process inventory.

196) Refer to the following information about the Finishing Department in the Davidson Factory for the month of June. Davidson Factory uses the weighted-average method of inventory costing.

Beginning Work in Process inventory:

Physical units…………………………………………... 5,000 units

% complete for materials………………………………. 70%

% complete for labor and overhead……………………. 25%

Materials cost from May……………………………….. $7,350

Labor and overhead cost from May……………………. $3,125

Product started and completed:

Physical units…………………………………………… 40,000 units

Ending Work in Process inventory:

Physical units………………………………………….... 4,000 units

% complete for materials………………………………. 40%

% complete for labor and overhead……………………. 10%

Manufacturing costs for June:

Materials………………………………………………… $96,975

Labor and overhead……………………………………... $79,470

Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending Work in Process inventory.

197) A company's January 1 Work in Process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were 30% complete. Calculate the equivalent units of production for the year using the FIFO method.

198) Prepare the required general journal entries to record the following transactions for the Ringer Company.

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

b. Used $12,000 of direct materials in the production department.

c. Used $5,000 of indirect materials.

199) Prepare the required general journal entry to record the following transactions for the O'Harra Company.

a. Used $78,000 of direct labor in the production department.

b. Used $17,000 of indirect labor.

200) Wang Company provides the following data for the current year:

Estimated Factory Overhead $7,800

Factory Overhead Incurred $11,400

Factory Overhead Applied ?

Estimated Direct Labor Cost $12,000

Direct Labor Cost Incurred $11,800

Required:

a. Calculate the predetermined overhead allocation rate based on direct labor.

b. Determine the amount of overhead applied to production.

c. Prepare the journal entry to apply factory overhead to Work in Process.

201) Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing.

The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the beginning units that were completed and transferred during August.

202) Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the weighted average method of inventory costing.

The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the units that were started and completed during August.

203) Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned all units that were completed and transferred during August.

204) Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing.

The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the ending Work in Process inventory for August.

205) Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing.

The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00.Prepare a cost reconciliation for the month of August.

206) Giga Company uses a weighted average process cost system. The department started and finished 129,000 units during the current period. The ending inventory consists of 60,000 units that are 75% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $262,500 and overhead costs of $126,000.

(a) Compute the equivalent cost per unit for direct labor.

(b) Compute the equivalent cost per unit for overhead.

207) Bagger, Inc. uses a process costing system. The following operating and cost data occurred during October:

October 1, Inventory: 30,000 units

100% complete for materials

($60,000) and 50% complete

for direct labor ($7,500) and

overhead ($15,000)

October 31, Inventory: 20,000 units

100% complete for materials

and 30% complete for

direct labor and overhead

Units started during Oct.: 40,000 units

October production costs: Direct materials…………………… $110,100

Direct labor………………………… 28,900

Overhead…………………………… 57,800

Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

208) Kominski Company completed and transferred 90,000 units during the current period. Based on the following information, determine the cost of the units completed during the current reporting period and journalize the transfer.

209) Grayson Company had 8,700 units in beginning inventory with accumulated costs for direct materials of $17,900, $16,500 direct labor, and $13,200 of overhead. During July, the company completed and transferred 50,000 units to finished goods. Costs incurred in the current period included $45,000 of direct materials, $58,500 of direct labor, and $46,800 of factory overhead. Ending inventory consisted of 12,000 units which were 90% complete with respect to materials and 50% complete with respect to labor and overhead. Compute the value assigned to ending inventory based on the weighted average method of inventory costing.

210) During the year, LT Corp. introduced 132,000 units into production and 144,000 units were completed and transferred to finished goods. At the end of the year, the company had 13,600 units in process that were 80% complete. Determine how many units the company had in Work in Process at the beginning of the year.

211) The following table of cost information is available for the Renaldo Company for the month of November:

Based on the table of cost information above, prepare the general journal entry required to record the:

a. Transfer of goods from the molding department to the finished goods inventory.

b. Cost of goods sold for November.

212) Prepare general journal entries to record the following production activities for Oaks Manufacturing.

a. Purchased $82,000 of raw materials on credit.

b. Used $63,500 of direct materials in production.

c. Used $12,800 of indirect materials.

213) Prepare journal entries to record the following production activities for Oaks Manufacturing.

a. Used $93,900 of direct labor in the production department.

b. Used $11,200 of indirect labor.

214) Prepare journal entries to record the following production activities for Oaks Manufacturing.

a. Incurred overhead costs of $79,000 (paid in cash).

b. Applied overhead at 110% of direct labor costs which are $93,900.

c. Transferred completed products with a cost of $258,200 to finished goods inventory.

d. Sold $602,000 of product on credit. Cost is $271,000.

215) Port Manufacturing Company uses a process costing system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing. The following are the operating and cost data information for October.

The October 1 beginning Work in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost.

In addition to the beginning inventory costs, the company issued the following costs into Work in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000.

During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the Work in Process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials.

Prepare the company's process cost summary for October using the weighted average method.

216) Process operations, also called process manufacturing or process production, is the ________ production of similar products in a ________ flow of sequential steps.

217) An ________is the number of units that could have been started and completed given the costs incurred during the period.

218) If a process has ________ or ________ inventory of partially completed production, equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.

219) The second step in accounting for production activity in a period, after determining the physical flow of units, is to compute ________.

220) The third step in accounting for production activity in a period, before assigning and reconciling costs, is to compute the ________.

221) The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, which ________ and ________ costs.

222) Materials and labor costs that are clearly associated with a specific process or department are known as ________. Those costs that are not clearly associated with a specific process or department are called ________.

223) A ________ contains features of both process and job order costing systems.

224) In a process costing system, direct materials used are debited to the ________ account, and indirect materials used are debited to the ________ account.

225) In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Work in Process, Department #1 to ________.

226) In a process costing accounting system, factory wages are debited to ________, when direct labor is used. When indirect labor is used, the ________ account is debited. In both cases the ________ is credited.

227) In process costing, a ________ is used to apply factory overhead.

228) A process cost summary involves computations and analysis at four sequential steps. These are (1) ________ (2) ________, (3) ________, and (4) ________.

229) On a process cost summary, the total costs to account for (the processing costs for the period plus the Work in Process at the end of the period) should equal ________ (________ plus ________).

230) When the final production department completes goods, the cost of the completed goods are transferred to ________.

231) When the completed goods are sold, the cost of the completed goods are transferred to ________.