Question 1

From the industries listed below, which one is most likely to use process costing in accounting for production costs?

Accepted Answer

A) Printing shop. 
B) Accounting firm. 
C) Electrical contractor. 
D) Steel mill. 
E) Automobile repair shop. 
A) Printing shop. 
B) Accounting firm. 
C) Electrical contractor. 
D) Steel mill. 
E) Automobile repair shop.

Question 2

Many industries, for example mining and other extractive industries, use process costing to provide information regarding sustainability.
Required:
Provide an example of how a company could use process costing to assist in making decisions regarding sustainability.

Accepted Answer

(Suggested response. Answer presentation

Question 3

Conversion costs in a process cost system include:

Accepted Answer

A) Direct materials and direct labor. 
B) Direct labor and manufacturing overhead. 
C) Direct materials and manufacturing overhead. 
D) Manufacturing overhead and selling, general & administrative expenses. 
A) Direct materials and direct labor. 
B) Direct labor and manufacturing overhead. 
C) Direct materials and manufacturing overhead. 
D) Manufacturing overhead and selling, general & administrative expenses.

Question 4

Williams Corporation's Department A has the following information:   Required:
1.Use the FIFO method to calculate:
(a) Equivalent units.
(b) Cost per unit, rounded to three decimal places.
(c) Cost completed and transferred out, rounded to the nearest whole dollar.
(d) Cost in the ending work-in-process inventory, rounded to the nearest whole dollar.
2.Use the weighted-average method to answer a through d in requirement 1.

Accepted Answer

1.a.28,400 for materials, 30,600 for con

Question 5

Process costing can be found in which of the following companies (industries)?

Accepted Answer

A) Coca-Cola. 
B) Royal Dutch Shell Group. 
C) Kimberly-Clark (paper products). 
D) Reichhold Chemical (chemicals). 
E) All of the above. 
A) Coca-Cola. 
B) Royal Dutch Shell Group. 
C) Kimberly-Clark (paper products). 
D) Reichhold Chemical (chemicals). 
E) All of the above.

Question 6

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.
The equivalent units for conversion under the weighted average method are calculated to be:

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 7

Talamoto Co. manufactures a single product that goes through two processes — mixing and cooking. The following data pertains to the Mixing Department for September. Material P is added at the beginning of work in the Mixing Department. Material Q is also added in the Mixing Department, but not until units of product are forty percent completed with regard to conversion. Conversion costs are incurred uniformly during the process.
The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Accepted Answer

A)  $1,094,800. 
B)  $957,600. 
C)  $856,000. 
D)  $932,000. 
E)  $887,000. 
A)  $1,094,800. 
B)  $957,600. 
C)  $856,000. 
D)  $932,000. 
E)  $887,000.

Question 8

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 in ending inventory?

Accepted Answer

A)  $430. 
B)  $500. 
C)  $850. 
D)  $1,150. 
A)  $430. 
B)  $500. 
C)  $850. 
D)  $1,150.

Question 9

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.
The equivalent units for materials under the weighted-average method are calculated to be:

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 10

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 equivalent units for conversion costs?

Accepted Answer

A)  4,200 units. 
B)  4,800 units. 
C)  4,000 units. 
D)  4,400 units. 
A)  4,200 units. 
B)  4,800 units. 
C)  4,000 units. 
D)  4,400 units.

Question 11

The number of the same or similar units that could have been produced given the amount of work actually performed on both complete and partially complete units is referred to as:

Accepted Answer

A) Physical units. 
B) Completed units. 
C) Equivalent units. 
D) Produced units. 
E) Units to account for. 
A) Physical units. 
B) Completed units. 
C) Equivalent units. 
D) Produced units. 
E) Units to account for.

Question 12

Units accounted for includes units completed and transferred out plus:

Accepted Answer

A) Beginning inventory. 
B) Units to account for. 
C) Ending inventory. 
D) Units started. 
A) Beginning inventory. 
B) Units to account for. 
C) Ending inventory. 
D) Units started.

Question 13

The sum of units transferred out and ending inventory units, assuming no spoilage, determines the:

Accepted Answer

A) Units completed during the period. 
B) Units spoiled. 
C) Units transferred in during the period. 
D) Units accounted for. 
E) Units started during the period. 
A) Units completed during the period. 
B) Units spoiled. 
C) Units transferred in during the period. 
D) Units accounted for. 
E) Units started during the period.

Question 14

Which of the following companies (industries) would not use a process cost system?

Accepted Answer

A)  Georgia-Pacific Corporation (Lumber and Paper) 
B)  Accenture (Consulting) 
C)  Bayer Pharmaceutical (Drugs) 
D)  Reichhold Chemical (Chemicals) 
A)  Georgia-Pacific Corporation (Lumber and Paper) 
B)  Accenture (Consulting) 
C)  Bayer Pharmaceutical (Drugs) 
D)  Reichhold Chemical (Chemicals)

Question 15

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

Accepted Answer

A) Analyze the physical flow of production units. 
B) Determine total costs for each manufacturing cost element. 
C) Compute cost per equivalent unit for each manufacturing cost element. 
D) Calculate incomplete units for each manufacturing cost element. 
A) Analyze the physical flow of production units. 
B) Determine total costs for each manufacturing cost element. 
C) Compute cost per equivalent unit for each manufacturing cost element. 
D) Calculate incomplete units for each manufacturing cost element.

Question 16

Which of the statements below is not correct?

Accepted Answer

A) Normal spoilage is spoilage that occurs under efficient operating conditions. 
B) Normal spoilage is controllable in the short term and not considered a part of product cost. 
C) Abnormal spoilage is spoilage in excess of that expected under efficient operating conditions. 
D) Abnormal spoilage is charged as a loss to operations in the period detected. 
A) Normal spoilage is spoilage that occurs under efficient operating conditions. 
B) Normal spoilage is controllable in the short term and not considered a part of product cost. 
C) Abnormal spoilage is spoilage in excess of that expected under efficient operating conditions. 
D) Abnormal spoilage is charged as a loss to operations in the period detected.

Question 17

Process costing is not intended to help determine

Accepted Answer

A) Departmental cost flows. 
B) Product costs. 
C) Profitability of products. 
D) Profitability of product mix. 
A) Departmental cost flows. 
B) Product costs. 
C) Profitability of products. 
D) Profitability of product mix.

Question 18

In a production cost report using process costing, transferred-in costs are similar to:

Accepted Answer

A) Materials costs added at the end of the process. 
B) Materials costs added at the beginning of the process. 
C) Conversion costs added during the process. 
D) Conversion costs transferred to the next process. 
E) Conversion costs included in beginning inventory. 
A) Materials costs added at the end of the process. 
B) Materials costs added at the beginning of the process. 
C) Conversion costs added during the process. 
D) Conversion costs transferred to the next process. 
E) Conversion costs included in beginning inventory.

Question 19

The weighted-average method is most appropriate when:

Accepted Answer

A) Work in process is relatively small. 
B) Conversion costs are stable. 
C) Direct materials prices are stable. 
D) All of the above. 
A) Work in process is relatively small. 
B) Conversion costs are stable. 
C) Direct materials prices are stable. 
D) All of the above.

Question 20

Which of the following characteristics applies to process costing but not to job costing?

Accepted Answer

A) Identifiable batches of production. 
B) Average costs. 
C) Equivalent units. 
D) Application of overhead. 
E) Use of standard costs. 
A) Identifiable batches of production. 
B) Average costs. 
C) Equivalent units. 
D) Application of overhead. 
E) Use of standard costs.

From the industries listed below, which one is most likely to use process costing in accounting for production costs?

Many industries, for example mining and other extractive industries, use process costing to provide information regarding sustainability. Required: Provide an example of how a company could use process costing to assist in making decisions regarding sustainability.

Conversion costs in a process cost system include:

Process costing can be found in which of the following companies (industries)?

The number of the same or similar units that could have been produced given the amount of work actually performed on both complete and partially complete units is referred to as:

Units accounted for includes units completed and transferred out plus:

The sum of units transferred out and ending inventory units, assuming no spoilage, determines the:

Which of the following companies (industries) would not use a process cost system?

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

Which of the statements below is not correct?

Process costing is not intended to help determine

In a production cost report using process costing, transferred-in costs are similar to:

The weighted-average method is most appropriate when:

Which of the following characteristics applies to process costing but not to job costing?

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

From the industries listed below, which one is most likely to use process costing in accounting for production costs?

Many industries, for example mining and other extractive industries, use process costing to provide information regarding sustainability. Required: Provide an example of how a company could use process costing to assist in making decisions regarding sustainability.

Conversion costs in a process cost system include:

Process costing can be found in which of the following companies (industries)?

The number of the same or similar units that could have been produced given the amount of work actually performed on both complete and partially complete units is referred to as:

Units accounted for includes units completed and transferred out plus:

The sum of units transferred out and ending inventory units, assuming no spoilage, determines the:

Which of the following companies (industries) would not use a process cost system?

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

Which of the statements below is not correct?

Process costing is not intended to help determine

In a production cost report using process costing, transferred-in costs are similar to:

The weighted-average method is most appropriate when:

Which of the following characteristics applies to process costing but not to job costing?

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