Question 1

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

Accepted Answer

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 
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

Question 2

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

Accepted Answer

a. 5,000
b. 20,000 = 18,000 + 7,000 - 5,

Question 3

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.

Accepted Answer

a. 90,000 units = 25

Question 4

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

Accepted Answer

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.
One must add the number of units that were on hand at the beginning of the period to the units that were started during the current perioD. 
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.
One must add the number of units that were on hand at the beginning of the period to the units that were started during the current perioD.

Question 5

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

Accepted Answer

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) 
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)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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.

Accepted Answer

a. 4,000 = 7,000 - 3,000
b. 2,000 = 2,00

Question 8

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.

Accepted Answer

a. 4,000 = 7,000 - 3,000
b. 2,000 = 2,00

Question 9

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?

Accepted Answer

A)  $115.50 
B)  $141.43 
C)  $145.20 
D)  $165.00 
A)  $115.50 
B)  $141.43 
C)  $145.20 
D)  $165.00

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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. 
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.

Question 12

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

Accepted Answer

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. 
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.

Question 13

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?

Accepted Answer

A)  800 
B)  1,120 
C)  1,440 
D)  1,600 
A)  800 
B)  1,120 
C)  1,440 
D)  1,600

Question 14

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

Accepted Answer

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. 
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.

Question 15

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?

Accepted Answer

A)  0 
B)  500 
C)  3,500 
D)  4,500 
A)  0 
B)  500 
C)  3,500 
D)  4,500

Question 16

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

Accepted Answer

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 
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

Question 17

Computing equivalent units is especially important for:

Accepted Answer

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. 
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.

Question 18

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.

Accepted Answer

a. 74,000 units = 4,

Question 19

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?

Accepted Answer

A)  13,000 
B)  13,585 
C)  14,105 
D)  14,300 
A)  13,000 
B)  13,585 
C)  14,105 
D)  14,300

Question 20

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

Accepted Answer

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 
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

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

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

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

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

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

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

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

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

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?

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

Computing equivalent units is especially important for:

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

Introduction to Managerial Accounting

Job-Order Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Financial Statement Analysis

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Exam 3: Process Costing

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

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

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

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

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

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

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

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

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?

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

Computing equivalent units is especially important for:

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

Introduction to Managerial Accounting

Job-Order Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Financial Statement Analysis

Filters