Question 1

The journal entry to record the application of factory overhead to work in process would include a credit to:

Accepted Answer

A) Work-in-Process. 
B) Cost of Goods Sold. 
C) Factory Overhead. 
D) Materials Inventory. 
E) Finished Goods Inventory. 
A) Work-in-Process. 
B) Cost of Goods Sold. 
C) Factory Overhead. 
D) Materials Inventory. 
E) Finished Goods Inventory. C

Question 2

Backflush costing is a costing method that:

Accepted Answer

A) Charges current production costs directly to finished goods inventory. 
B) Charges past production costs directly to finished goods inventory. 
C) Charges current production costs using actual costs incurred. 
D) Charges current production cost directly to work-in-process inventory. 
A) Charges current production costs directly to finished goods inventory. 
B) Charges past production costs directly to finished goods inventory. 
C) Charges current production costs using actual costs incurred. 
D) Charges current production cost directly to work-in-process inventory. A

Question 3

A Production Cost Report summarizes all except:

Accepted Answer

A) The physical units of a department. 
B) The equivalent units of a department. 
C) The costs incurred during the period. 
D) The costs assigned to both units completed and ending work-in-process inventories. 
E) All of the above are correct. 
A) The physical units of a department. 
B) The equivalent units of a department. 
C) The costs incurred during the period. 
D) The costs assigned to both units completed and ending work-in-process inventories. 
E) All of the above are correct. E

Question 4

Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8".$\begin{array}{lr}
\text { Beginning work-in-process ( } 40 \% \text { completed) } & 400 \text { units } \
\text { Transferred-in } & 1,600 \text { units } \
\text { Normal spoilage } & 100 \text { units } \
\text { Abnormal spoilage } & 100 \text { units } \
\text { Good units transferred out } & 1,400 \text { units } \
\text { Ending work-in-process }(25 \% \text { completed) } & 400 \text { units }\\text { Conversion costs in beginning inventory } & \$ 180,500 \
\text { Current conversion costs } & \$ 728,218
\end{array}$Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question:
What are the total conversion costs of abnormal spoilage?

Accepted Answer

A)  $60,518. 
B)  $53,454. 
C)  $64,908. 
D)  $58,314. 
A)  $60,518. 
B)  $53,454. 
C)  $64,908. 
D)  $58,314.

Question 5

Backflush costing:

Accepted Answer

A) Is a simplified approach to determining product cost that is used when there is little or no work-in-process inventory. 
B) Involves the use of standard costing. 
C) Allows product costs to be quickly and conveniently calculated 
D) Is an approach to determining product cost that is used when JIT is used. 
E) ALL of the above. 
A) Is a simplified approach to determining product cost that is used when there is little or no work-in-process inventory. 
B) Involves the use of standard costing. 
C) Allows product costs to be quickly and conveniently calculated 
D) Is an approach to determining product cost that is used when JIT is used. 
E) ALL of the above.

Question 6

Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Accepted Answer

A) FIFO method. 
B) LIFO method. 
C) Specific unit method. 
D) Weighted-average method. 
E) Moving-average method. 
A) FIFO method. 
B) LIFO method. 
C) Specific unit method. 
D) Weighted-average method. 
E) Moving-average method.

Question 7

Abnormal spoilage is considered what kind of cost?

Accepted Answer

A) Period cost. 
B) Product cost. 
C) Opportunity cost. 
D) Sunk cost. 
A) Period cost. 
B) Product cost. 
C) Opportunity cost. 
D) Sunk cost.

Question 8

East Bay Fisheries Inc. processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2019 are provided below: Total equivalent units for conversion under the weighted-average method are calculated to be:

Accepted Answer

A) 6,830 equivalent units. 
B) 8,180 equivalent units. 
C) 6,980 equivalent units. 
D) 7,140 equivalent units. 
E) 7,620 equivalent units. 
A) 6,830 equivalent units. 
B) 8,180 equivalent units. 
C) 6,980 equivalent units. 
D) 7,140 equivalent units. 
E) 7,620 equivalent units.

Question 9

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

Accepted Answer

A) Beginning work-in-process inventory. 
B) Ending work-in-process inventory. 
C) Cost of goods manufactured and ending work-in-process inventory in the ratio of units worked on during the period to units remaining in work-in-process inventory. 
D) Cost of goods manufactured (transferred out). 
E) A separate loss account in order to highlight production inefficiencies. 
A) Beginning work-in-process inventory. 
B) Ending work-in-process inventory. 
C) Cost of goods manufactured and ending work-in-process inventory in the ratio of units worked on during the period to units remaining in work-in-process inventory. 
D) Cost of goods manufactured (transferred out). 
E) A separate loss account in order to highlight production inefficiencies.

Question 10

Pierce Co. manufactures a single product that goes through two processes — mixing and cooking. The following data pertains to the Mixing Department for September. Material R is added at the beginning of work in the Mixing Department. Material S is also added in the Mixing Department, but not until units of product are thirty percent completed with regard to conversion. Conversion costs are incurred uniformly during the process. 
Required:
(1) Calculate the equivalent units for Material R using the weighted-average method.
(2) Calculate the equivalent units for Material S using the weighted-average method.
(3) Calculate the equivalent units for conversion using the weighted-average method.
(4) Calculate the unit costs using the weighted-average method.
(5) Calculate the cost of units completed and transferred out using the weighted-average method.
(6) Calculate the cost of ending work in process using the weighted-average method.

Accepted Answer

1.124,000
2.124,000
3.109,600

Question 11

Stoltenberg Co. had the following information for the month of June:$\begin{array}{lr}
\text { Work in process beginning inventory, June } 1 & 2,000 \text { units } \
\text { Units transferred in } & 16,000 \text { units } \
\text { Work in process ending inventory, June } 30 & 4,000 \text { units }
\end{array}$Beginning work-in-process inventory is 30 percent complete as to conversion. Ending work-in-process inventory is 50 percent complete as to conversion. Materials are added at the end of the process.
How many units were completed in June?

Accepted Answer

A)  12,000. 
B)  10,000. 
C)  14,000. 
D)  16,000. 
E)  18,000. 
A)  12,000. 
B)  10,000. 
C)  14,000. 
D)  16,000. 
E)  18,000.

Question 12

Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the final department of Giddings's blockbuster drug called Solcax.$\begin{array}{lr}
\text { Beginning work-in-process }(40 \% \text { completed) } & 800 \text { units } \
\text { Transferred-in } & 4,000 \text { units } \
\text { Normal spoilage } & 400 \text { units } \
\text { Abnormal spoilage } & 200 \text { units } \
\text { Good units transferred out } & 3,600 \text { units } \
\text { Ending work-in-process }(1 / 3 \text { completed) } & 600 \text { units }\\text { Conversion costs in beginning inventory } & \$ 2,560 \
\text { Current conversion costs } & \$ 6,900
\end{array}$Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question:
 What are the total conversion costs transferred to finished goods?

Accepted Answer

A)  $6,750. 
B)  $7,740. 
C)  $8,600. 
D)  $9,460. 
A)  $6,750. 
B)  $7,740. 
C)  $8,600. 
D)  $9,460.

Question 13

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) None of the above. 
A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) None of the above.

Question 14

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Accepted Answer

A) Work-in-Process Inventory. 
B) Accrued Payroll. 
C) Factory Overhead. 
D) Materials Inventory. 
E) Finished Goods Inventory. 
A) Work-in-Process Inventory. 
B) Accrued Payroll. 
C) Factory Overhead. 
D) Materials Inventory. 
E) Finished Goods Inventory.

Question 15

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method. The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Accepted Answer

A) $96,000. 
B) $476,400. 
C) $571,200. 
D) $484,000. 
E) $468,200. 
A) $96,000. 
B) $476,400. 
C) $571,200. 
D) $484,000. 
E) $468,200.

Question 16

NYI Corporation manufactures decorative window glass in two sequential departments.These data pertain to the month of August: $$\begin{array} { | l | c | c | } 
\hline & \text { Department 1 } & \text { Department 2 } \
\hline \begin{array} { l } 
\text { Direct Materials used for } \
\text { production }
\end{array} & \$ 55,000 & \$ 32,000 \
\hline \text { Direct Labor } & 160,000 & 320,000 \
\hline \text { Applied factory overhead } & 340,000 & 250,000 \
\hline \begin{array} { l } 
\text { Cost of goods completed and } \
\text { transferred }
\end{array} & 850,000 & 740,000 \
\hline
\end{array}$$ Required: Prepare journal entries to record these events:
1.Incurrence of direct materials and direct labor.Application of factory overhead in department 1.
2.Transfer of products from department 1 to department 2.
3.Incurrence of direct materials and direct labor.Application of factory overhead in department 2.
4.Transfer of complete products from department 2 to finished goods inventory.

Accepted Answer

The answer of NYI Corporation manufactures decorative window glass in...

Question 17

Each of the following cases is independent.Use the FIFO method.   Required: Fill in the blanks.

Accepted Answer

Case A
Current costs = $44,000 + $6,000

Question 18

You are engaged in the audit of the December 31, 2013, financial statements of Epworth Products
Corporation.You are attempting to verify the costing of the work-in-process and finished goods ending inventories that were recorded on Epworth's books as follows:   Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60 percent of direct labor costs.Epworth uses the FIFO costing method.A review of Epworth's 2013 inventory cost records disclosed the following information:   Required: Prepare a production cost report to verify the inventory balances.What is the amount of potential understatement or overstatement of the ending work-in-process account?

Accepted Answer

@#IMG-DLM& Conversion costs:
$504,000 =

Question 19

East Bay Fisheries Inc. processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2019 are provided below:
 
Total equivalent units for materials under the weighted-average method are calculated to be:

Accepted Answer

A) 6,830 equivalent units. 
B) 8,180 equivalent units. 
C) 6,980 equivalent units. 
D) 7,140 equivalent units. 
E) 7,620 equivalent units. 
A) 6,830 equivalent units. 
B) 8,180 equivalent units. 
C) 6,980 equivalent units. 
D) 7,140 equivalent units. 
E) 7,620 equivalent units.

Question 20

The U.S.Department of Agriculture urges the use of process costing together with:

Accepted Answer

A) Normal costing. 
B) Volume-based costing. 
C) Activity-based costing. 
D) Standard costing. 
A) Normal costing. 
B) Volume-based costing. 
C) Activity-based costing. 
D) Standard costing.

The journal entry to record the application of factory overhead to work in process would include a credit to:

Backflush costing is a costing method that:

A Production Cost Report summarizes all except:

Backflush costing:

Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Abnormal spoilage is considered what kind of cost?

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method.The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Each of the following cases is independent.Use the FIFO method. Required: Fill in the blanks.

The U.S.Department of Agriculture urges the use of process costing together with:

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 6: Process Costing

The journal entry to record the application of factory overhead to work in process would include a credit to:

Backflush costing is a costing method that:

A Production Cost Report summarizes all except:

Backflush costing:

Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Abnormal spoilage is considered what kind of cost?

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method.The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Each of the following cases is independent.Use the FIFO method. Required: Fill in the blanks.

The U.S.Department of Agriculture urges the use of process costing together with:

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters