Question 1

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of accretion.

Accepted Answer

A) True 
 B)False

Question 2

Kennedy Company
The following information is available for Kennedy Company for March of the current year.All materials are added at the start of production.             Beginning Work in Process: (80% complete)      8,000 units                      Started       35,000 units                      Normal spoilage (continuous)       6,000 units                      Abnormal spoilage       2,500 units                      Ending Work in Process: (55% complete)       15,000 units                      Transferred out       19,500 units                      Beginning Work in Process Costs:                                    Material       $ 14,000                      Conversion       45,000               Current Costs:                                    Material        50,000                      Conversion        175,000               Total Costs             $ 284,000       Refer to Kennedy Company.Prepare the cost of production report assuming the weighted average method.

Accepted Answer

Refer to Kennedy Company.Prepare the cos

Question 3

The primary difference between the FIFO and weighted average methods of process costing is

Accepted Answer

A) in the treatment of beginning Work in Process Inventory. 
B) in the treatment of current period production costs. 
C) in the treatment of spoiled units. 
D) none of the above. 
A) in the treatment of beginning Work in Process Inventory. 
B) in the treatment of current period production costs. 
C) in the treatment of spoiled units. 
D) none of the above.

Question 4

All manufacturing costs other than direct materials are referred to as __________.

Accepted Answer

The answer of All manufacturing costs other than direct materials...

Question 5

Riggs Company uses a FIFO process costing system.The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month.The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs.What are equivalent units for material,if material is added at the beginning of the process?

Accepted Answer

A) 18,000 
B) 22,000 
C) 25,000 
D) 27,000 
A) 18,000 
B) 22,000 
C) 25,000 
D) 27,000

Question 6

Discrete production losses are assumed to occur throughout the process.

Accepted Answer

A) True 
 B)False

Question 7

Andersen Corporation
Andersen Corporation has the following information for the current month:
             Units started       95,000 units               Beginning Work in Process: (30% complete)       15,000 units               Normal spoilage (discrete)       3,000 units               Abnormal spoilage       4,000 units               Ending Work in Process: (75% complete)       15,000 units               Transferred out       88,000 units               Beginning Work in Process Costs:                             Material                 $18,000                      Conversion            14,000      
All materials are added at the start of the production process.Andersen Corporation inspects goods at 75 percent completion as to conversion.
Refer to Andersen Corporation.What are equivalent units of production for conversion costs assuming weighted average is used?

Accepted Answer

A) 103,750 
B) 104,500 
C) 104,750 
D) 105,500 
A) 103,750 
B) 104,500 
C) 104,750 
D) 105,500

Question 8

Becker Company makes fabric-covered storage totes.The company began July with 600 totes in process that were 100 percent complete as to cardboard,75 percent complete as to cloth,and 65 percent complete as to conversion costs.During the month,3,600 totes were started.On April 30,450 totes were in process (100 percent complete as to cardboard,60 percent complete as to cloth,and 50 percent complete as to conversion costs).Using the FIFO method,what are equivalent units for cloth?

Accepted Answer

A) 3,570 
B) 3,750 
C) 3,870 
D) 4,020 
A) 3,570 
B) 3,750 
C) 3,870 
D) 4,020

Question 9

Painter Corporation
Painter Corporation has the following information for the current month:
             Units started       100,000 units               Beginning Work in Process: (35% complete)       20,000 units               Normal spoilage (discrete)       3,500 units               Abnormal spoilage       5,000 units               Ending Work in Process: (70% complete)       14,500 units               Transferred out       97,000 units               Beginning Work in Process Costs:                             Material                 $15,000                      Conversion            10,000      
All materials are added at the start of the production process.Painter Corporation inspects goods at 75 percent completion as to conversion.
Refer to Painter Corporation.What are equivalent units of production for conversion costs,assuming FIFO?

Accepted Answer

A) 108,900 
B) 103,900 
C) 108,650 
D) 106,525 
A) 108,900 
B) 103,900 
C) 108,650 
D) 106,525

Question 10

What are two alternative calculations that can be used to either verify the number of equivalent units or to obtain the number initially?

Accepted Answer

One alternative method of calculating eq

Question 11

Andersen Corporation
Andersen Corporation has the following information for the current month:
             Units started       95,000 units               Beginning Work in Process: (30% complete)       15,000 units               Normal spoilage (discrete)       3,000 units               Abnormal spoilage       4,000 units               Ending Work in Process: (75% complete)       15,000 units               Transferred out       88,000 units               Beginning Work in Process Costs:                             Material                 $18,000                      Conversion            14,000      
All materials are added at the start of the production process.Andersen Corporation inspects goods at 75 percent completion as to conversion.
Refer to Andersen Corporation.What are equivalent units of production for material,assuming FIFO?

Accepted Answer

A) 91,000 
B) 92,000 
C) 95,000 
D) 110,000 
A) 91,000 
B) 92,000 
C) 95,000 
D) 110,000

Question 12

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of neglect.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?

Accepted Answer

A) Miscellaneous Revenue 
B) Loss from Spoilage 
C) Finished Goods 
D) Work in Process 
A) Miscellaneous Revenue 
B) Loss from Spoilage 
C) Finished Goods 
D) Work in Process

Question 14

Wyman Corporation
Wyman Corporation.has the following information for May:
$\begin{array}{lc}
\text { Beginning Work in Process Inventory } & \
\text { (75\% complete as to conversion) } &7,500 \text { units } \
\text { Started } &  27,000 \text { unit }\
\text { Ending Work in Process Inventory } & \ \
\text { (15\% complete as to conversion) } & 9,400 \text { units }  \
\text { Beginuing WIP Inventory Costs: } & \
\text { Material } &\$ 25,500\
\text { Conversion } & 52,725
\end{array}$
Current Period Costs:
Material                                                                                $ \$ 34,300 $
Conversion                                                                            $ 80,845 $

All material is added at the start of the process and all finished products are transferred out.
Refer to Wyman Corporation.Assume that FIFO process costing is used.What is the cost per equivalent unit for conversion?

Accepted Answer

A) $3.05 
B) $3.87 
C) $4.25 
D) $6.40 
A) $3.05 
B) $3.87 
C) $4.25 
D) $6.40

Question 15

Mayer Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to conversion costs.Mayer Company started and completed 46,000 units this period and had ending Work in Process Inventory of 11,000 units.How many units were started this period?

Accepted Answer

A) 46,000 
B) 52,000 
C) 57,000 
D) 63,000 
A) 46,000 
B) 52,000 
C) 57,000 
D) 63,000

Question 16

Saturn Corporation
Begining invent ouy (30\% complete as to Material B and $ 60 \% $ complete for                                     700                                   units
conversion

Started this cycle                                                                                                                                     2,000                               units
Ending inventory (50\% complete as to Material B and $ 80 \% $ complete for conversion)                       500                                   units

$\begin{array}{lc}
\text { Beginuing inventory costs: } &  \
\text { Material A } &\$ 14,270 \
\text { Material B } &5,950  \
\text { Conversion } & 5,640  \
\text { Current Period costs: } &  \
\text { Material A } & \$ 40,000\
\text { Material B } &70,000  \
\text { Conversion } & 98,100
\end{array}$

Material A is added at the start of production,while Material B is added uniformly throughout the process.
Refer to Saturn Corporation Assuming a FIFO method of process costing,compute the average cost per EUP for Material

Accepted Answer

A) $20.10 
B) $31.25 
C) $20.00 
D) $31.00 
A) $20.10 
B) $31.25 
C) $20.00 
D) $31.00

Question 17

Material is added at the beginning of a process in a process costing system.The beginning Work in Process Inventory for the process was 30 percent complete as to conversion costs.Using the FIFO method of costing,the number of equivalent units of material for the process during this period is equal to the

Accepted Answer

A) beginning inventory this period for the process. 
B) units started and completed this period in the process. 
C) units started this period in the process plus the beginning Work in Process Inventory. 
D) units started and completed this period plus the units in ending Work in Process Inventory. 
A) beginning inventory this period for the process. 
B) units started and completed this period in the process. 
C) units started this period in the process plus the beginning Work in Process Inventory. 
D) units started and completed this period plus the units in ending Work in Process Inventory.

Question 18

Discuss the assignment of costs to transferred-out inventories in both process costing methods.

Accepted Answer

The assignment of costs in a process cos

Question 19

The weighted average method is thought by some accountants to be inferior to the FIFO method because it

Accepted Answer

A) is more difficult to apply. 
B) only considers the last units worked on. 
C) ignores work performed in subsequent periods. 
D) commingles costs of two periods. 
A) is more difficult to apply. 
B) only considers the last units worked on. 
C) ignores work performed in subsequent periods. 
D) commingles costs of two periods.

Question 20

Andersen Corporation
Andersen Corporation has the following information for the current month:
             Units started       95,000 units               Beginning Work in Process: (30% complete)       15,000 units               Normal spoilage (discrete)       3,000 units               Abnormal spoilage       4,000 units               Ending Work in Process: (75% complete)       15,000 units               Transferred out       88,000 units               Beginning Work in Process Costs:                             Material                 $18,000                      Conversion            14,000      
All materials are added at the start of the production process.Andersen Corporation inspects goods at 75 percent completion as to conversion.
Refer to Andersen Corporation.Assume that the costs per EUP for material and conversion are $2.00 and $2.25,respectively.What is the amount of the period cost for July using FIFO?

Accepted Answer

A) $0 
B) $12,750 
C) $14,750 
D) $17,000 
A) $0 
B) $12,750 
C) $14,750 
D) $17,000

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of accretion.

The primary difference between the FIFO and weighted average methods of process costing is

All manufacturing costs other than direct materials are referred to as __________.

Discrete production losses are assumed to occur throughout the process.

What are two alternative calculations that can be used to either verify the number of equivalent units or to obtain the number initially?

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of neglect.

Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?

Mayer Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to conversion costs.Mayer Company started and completed 46,000 units this period and had ending Work in Process Inventory of 11,000 units.How many units were started this period?

Discuss the assignment of costs to transferred-out inventories in both process costing methods.

The weighted average method is thought by some accountants to be inferior to the FIFO method because it

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Beginning Work in Process: (80% complete)	8,000 units
Started	35,000 units
Normal spoilage (continuous)	6,000 units
Abnormal spoilage	2,500 units
Ending Work in Process: (55% complete)	15,000 units
Transferred out	19,500 units
Beginning Work in Process Costs:
	Material	$ 14,000
	Conversion	45,000
Current Costs:
	Material	50,000
	Conversion	175,000
Total Costs		$ 284,000

Units started	95,000 units
Beginning Work in Process: (30% complete)	15,000 units
Normal spoilage (discrete)	3,000 units
Abnormal spoilage	4,000 units
Ending Work in Process: (75% complete)	15,000 units
Transferred out	88,000 units
Beginning Work in Process Costs:
	Material $18,000
	Conversion 14,000

Units started	100,000 units
Beginning Work in Process: (35% complete)	20,000 units
Normal spoilage (discrete)	3,500 units
Abnormal spoilage	5,000 units
Ending Work in Process: (70% complete)	14,500 units
Transferred out	97,000 units
Beginning Work in Process Costs:
	Material $15,000
	Conversion 10,000

Exam 6: Process Costing

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of accretion.

The primary difference between the FIFO and weighted average methods of process costing is

All manufacturing costs other than direct materials are referred to as __________.

Discrete production losses are assumed to occur throughout the process.

What are two alternative calculations that can be used to either verify the number of equivalent units or to obtain the number initially?

Costs of normal shrinkage and normal continuous losses in a process costing environment are handled by the method of neglect.

Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?

Mayer Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to conversion costs.Mayer Company started and completed 46,000 units this period and had ending Work in Process Inventory of 11,000 units.How many units were started this period?

Discuss the assignment of costs to transferred-out inventories in both process costing methods.

The weighted average method is thought by some accountants to be inferior to the FIFO method because it

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters