Question 1

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

Accepted Answer

A) the number of units that came from beginning inventory is the same as the number of units that were started during the period. 
B) the number of equivalent units for direct materials is the same as the number of equivalent units for conversion cost. 
C) the number of equivalent units is less than the number of physical units. 
D) the number of equivalent units is more than the number of physical units. 
A) the number of units that came from beginning inventory is the same as the number of units that were started during the period. 
B) the number of equivalent units for direct materials is the same as the number of equivalent units for conversion cost. 
C) the number of equivalent units is less than the number of physical units. 
D) the number of equivalent units is more than the number of physical units.

Question 2

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 3

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

Accepted Answer

A) $16,800 
B) $17,520 
C) $168,000 
D) $175,200 
A) $16,800 
B) $17,520 
C) $168,000 
D) $175,200

Question 4

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

Accepted Answer

A) a debit to Raw Materials Inventory. 
B) a debit to Finished Goods Inventory. 
C) a debit to Work in Process Inventory. 
D) a debit to Cash. 
A) a debit to Raw Materials Inventory. 
B) a debit to Finished Goods Inventory. 
C) a debit to Work in Process Inventory. 
D) a debit to Cash.

Question 5

Physical units multiplied by the percentage of completion yields:

Accepted Answer

A) units completed and transferred out. 
B) beginning units in process. 
C) equivalent units. 
D) ending units in process. 
A) units completed and transferred out. 
B) beginning units in process. 
C) equivalent units. 
D) ending units in process.

Question 6

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

Accepted Answer

A) $37,200.00 
B) $55,800.00 
C) $27,900.00 
D) $32,200.00 
A) $37,200.00 
B) $55,800.00 
C) $27,900.00 
D) $32,200.00

Question 7

Swan Corp.began work on 3,000 units this period.Work in Process Inventory was 500 at the beginning of the period (60% complete)and 1,000 at the end of the period (50% complete).Beginning inventory costs were $3,000 for conversion costs and $7,000 for direct materials.During the period,Swan incurred $75,000 for conversion costs and $52,500 for direct materials.Swan uses the weighted average method of process costing.Direct materials are added at the beginning of the process,and conversion costs are incurred evenly throughout the period.
Required:
Using the weighted average method:
a.How many units were completed during the period?
b.Determine the number of equivalent units for direct materials.
c.Determine the number of equivalent units for conversion costs.
d.Calculate the cost per equivalent unit for direct materials.
e.Determine the cost per equivalent unit for conversion costs.

Accepted Answer

a.2,500 = 500 + 3,000 − 1,000
b.3,500 =

Question 8

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

Accepted Answer

A) $0.9167 
B) $3.0000 
C) $3.5833 
D) $7.2500 
A) $0.9167 
B) $3.0000 
C) $3.5833 
D) $7.2500

Question 9

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

Accepted Answer

A) the number,but not the cost of 
B) the cost,but not the number of 
C) both the number and cost of 
D) neither the number nor cost of 
A) the number,but not the cost of 
B) the cost,but not the number of 
C) both the number and cost of 
D) neither the number nor cost of

Question 10

The journal entry to record the completion of goods includes:

Accepted Answer

A) a debit to Conversion Costs. 
B) a debit to Work in Process Inventory. 
C) a debit to Finished Goods Inventory. 
D) a debit to Cost of Goods Sold. 
A) a debit to Conversion Costs. 
B) a debit to Work in Process Inventory. 
C) a debit to Finished Goods Inventory. 
D) a debit to Cost of Goods Sold.

Question 11

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

Question 12

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

Accepted Answer

A) $7.9833 
B) $6.9091 
C) $7.0000 
D) $7.2500 
A) $7.9833 
B) $6.9091 
C) $7.0000 
D) $7.2500

Question 13

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

Accepted Answer

A) Use of FIFO is acceptable for GAAP,while use of weighted-average method is not. 
B) FIFO is simpler to use than the weighted-average method. 
C) Use of FIFO or weighted-average results in large differences for companies that maintain minimal work-in-process inventory. 
D) The weighted-average method is often simpler,less costly to prepare,and provides useful information for decision-making. 
A) Use of FIFO is acceptable for GAAP,while use of weighted-average method is not. 
B) FIFO is simpler to use than the weighted-average method. 
C) Use of FIFO or weighted-average results in large differences for companies that maintain minimal work-in-process inventory. 
D) The weighted-average method is often simpler,less costly to prepare,and provides useful information for decision-making.

Question 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) $27,600.00 
B) $34,699.80 
C) $47,899.80 
D) $97,500.00 
A) $27,600.00 
B) $34,699.80 
C) $47,899.80 
D) $97,500.00

Question 17

The journal entry to record the purchase of direct materials for cash 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 18

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

Accepted Answer

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

Question 19

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

Accepted Answer

A) $15.9667 
B) $13.8382 
C) $14.0000 
D) $14.5000 
A) $15.9667 
B) $13.8382 
C) $14.0000 
D) $14.5000

Question 20

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

Accepted Answer

A) Current manufacturing costs 
B) Current nonmanufacturing costs 
C) Equivalent units 
D) Beginning inventory costs 
A) Current manufacturing costs 
B) Current nonmanufacturing costs 
C) Equivalent units 
D) Beginning inventory costs

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

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

Physical units multiplied by the percentage of completion yields:

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

The journal entry to record the completion of goods includes:

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

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

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

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

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

Introduction to Managerial Accounting

Job Order Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variance Analysis

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 3: Process Costing

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

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

Physical units multiplied by the percentage of completion yields:

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

The journal entry to record the completion of goods includes:

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

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

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

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

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

Introduction to Managerial Accounting

Job Order Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variance Analysis

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters