Question 1

Distinguish between discrete and continuous production losses and the method of accounting for these losses.

Accepted Answer

Discrete production losses occur at a sp

Question 2

Abnormal continuous losses are absorbed by all units in ending inventory and transferred out on a EUP basis.

Accepted Answer

A) True 
 B)False

Question 3

A process costing system

Accepted Answer

A) cannot use standard costs. 
B) restates Work in Process Inventory in terms of completed units. 
C) accumulates costs by job rather than by department. 
D) assigns direct labor and manufacturing overhead costs separately to units of production. 
A) cannot use standard costs. 
B) restates Work in Process Inventory in terms of completed units. 
C) accumulates costs by job rather than by department. 
D) assigns direct labor and manufacturing overhead costs separately to units of production.

Question 4

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.Assume that the costs per EUP for material and conversion are $1.00 and $1.50,respectively.Assuming that weighted average is used,what is the cost assigned to ending inventory?

Accepted Answer

A) $29,725 
B) $37,163 
C) $38,475 
D) $36,250 
A) $29,725 
B) $37,163 
C) $38,475 
D) $36,250

Question 5

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 EUP units for Materials A and

Accepted Answer

A) 2,700 and 2,280,respectively 
B) 2,700 and 2,450,respectively 
C) 2,000 and 2,240,respectively 
D) 2,450 and 2,880,respectively 
A) 2,700 and 2,280,respectively 
B) 2,700 and 2,450,respectively 
C) 2,000 and 2,240,respectively 
D) 2,450 and 2,880,respectively

Question 6

Using FIFO costing,equivalent units of production (EUP)can be determined by subtracting EUP's in Beginning work in process from weighted average EUP.

Accepted Answer

A) True 
 B)False

Question 7

Fox Corporation
Fox Corporation.has the following information for August:
$\begin{array}{lc}
\text { Beginning Work in Process Inventory } & \
\text { (70\% complete as to conversion) } & 6,000 \text { units } \
\text { Started } &  24,000 \text { unit }\
\text { Ending Work in Process Inventory } & \ \
\text { (10\% complete as to conversion) } & 8,500 \text { units }  \
\text { Beginuing WIP Inventory Costs: } & \
\text { Material } &\$ 23,400\
\text { Conversion } & 50,607
\end{array}$
Current Period Costs:
Material                                                                                $ \$ 31,500 $
Conversion                                                                            $ 76.956 $

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

Accepted Answer

A) $0.55 
B) $1.05 
C) $1.31 
D) $1.83 
A) $0.55 
B) $1.05 
C) $1.31 
D) $1.83

Question 8

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 weighted average is used?

Accepted Answer

A) 113,525 
B) 114,400 
C) 114,775 
D) 115,650 
A) 113,525 
B) 114,400 
C) 114,775 
D) 115,650

Question 9

Colorful Creations Corporation
The Colorful Creations Corporation makes wreaths in two departments: Forming and Decorating.Forming began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent complete as to conversion.During the month,6,500 wreaths were started.At month end,Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion.Assume Forming uses the weighted average method of process costing.Costs in the Forming Department are as follows:
Beginui
ing Work
in
Process
Costs:

Materiel                          $1,000
Conversion                          1,500

Current
Cast:
Materiel                          $\$ 3,200$
Conversion                    5,045

The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent complete as to material and 90 percent complete as to conversion.The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion.Decorating uses the FIFO method of process costing,and costs associated with Decorating are:
Beginning WIP Inventory :

$\begin{array} { l l } \text { Transferred In } & \$ 1,170 \ \text { Meteriel } & 4,320 \ \text { Conversion } & 6,210 \end{array}$

Current Perind:

Transferred In                         $?$
 Material                             $67,745
Conversion                        95,820

Refer to Colorful Creations Corporation.Assume 8,000 units were transferred to Decorating.Compute the number of equivalent units in Decorating for material.

Accepted Answer

A) 7,970 
B) 8,000 
C) 8,330 
D) 8,450 
A) 7,970 
B) 8,000 
C) 8,330 
D) 8,450

Question 10

Wright Company
Wright Company adds material at the start of production.The following production information is available for September:
             Beginning Work in Process Inventory                                   (45% complete as to conversion)        10,000 units               Started this period               120,000 units               Ending Work in Process Inventory       80% complete as to conversion)       8,200 units               Beginning Work in Process Inventory Costs:                                    Material       $24,500                      Conversion       68,905               Current Period Costs:                                    Material       $ 75,600                      Conversion       130,053      
Refer to Wright Company.What is the cost of units completed using the weighted average method?

Accepted Answer

A) $237,510 
B) $266,742 
C) $278,400 
D) $282,576 
A) $237,510 
B) $266,742 
C) $278,400 
D) $282,576

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.Assume that the costs per EUP for material and conversion are $2.00 and $2.25,respectively.What is the cost assigned to normal spoilage,using weighted average,and where is it assigned?
$\text {\underline{ Value} }$                                 $\text {\underline{ Assigned To} }$

Accepted Answer

A) $11,063 Units transferred out and Ending Inventory 
B) $11,063 Units transferred out 
C) $12,750 Units transferred out and Ending Inventory 
D) $12,750 Units transferred out 
A) $11,063 Units transferred out and Ending Inventory 
B) $11,063 Units transferred out 
C) $12,750 Units transferred out and Ending Inventory 
D) $12,750 Units transferred out

Question 12

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 a cost of production report for March using FIFO.

Accepted Answer

Refer to Kennedy Company.Prepare a cost

Question 13

Colorful Creations Corporation
The Colorful Creations Corporation makes wreaths in two departments: Forming and Decorating.Forming began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent complete as to conversion.During the month,6,500 wreaths were started.At month end,Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion.Assume Forming uses the weighted average method of process costing.Costs in the Forming Department are as follows:
Beginui
ing Work
in
Process
Costs:

Materiel                          $1,000
Conversion                          1,500

Current
Cast:
Materiel                          $\$ 3,200$
Conversion                    5,045
The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent complete as to material and 90 percent complete as to conversion.The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion.Decorating uses the FIFO method of process costing,and costs associated with Decorating are:
Beginning WIP Inventory :

$\begin{array} { l l } \text { Transferred In } & \$ 1,170 \ \text { Meteriel } & 4,320 \ \text { Conversion } & 6,210 \end{array}$

Current Perind:

Transferred In                         $?$
 Material                             $67,745
Conversion                        95,820

Refer to Colorful Creations Corporation.Assume 8,000 units were transferred to Decorating.Compute the number of equivalent units as to costs in Decorating for the transferred-in cost component.

Accepted Answer

A) 7,400 
B) 7,700 
C) 8,000 
D) 8,600 
A) 7,400 
B) 7,700 
C) 8,000 
D) 8,600

Question 14

Ewing Company manufactures a specialized product.Department 2 adds new material to the units received from Department 1 at the end of process.A normal loss occurs early in processing.Production and cost data for Department 2 for the month of April are as follows:
 $\begin{array}{l}
\text { In productions record (in units): } \
\text { In process, April 1-75\% complete for processing cost }&4,000\
\text { Received from Department } 1 &20,000\
\text { Completed and transferred to finished goods }&16,000 \
\text { Lost in processing (normal) }&2,000 \
\text { In process, April } 30-2 / 3 \text { complete for process cost }&6,000
\end{array}$
             Work in process inventory, April 1:                      Preceding department cost       $ 620              Processing cost       2,000          =2,620               Cost from preceding department in April        1,800               Material cost for April        4,800               Processing cost for April       10,200       
Required:Determine the following for Department 2 under (a)weighted average the method of costing and (b)the FIFO method of costing:(1)unit costs for each cost component, (2)cost of production transferred to finished goods, (3)cost of work in process inventory of April 30.

Accepted Answer

@#IMG-DLM& 
Required:Determine the following for D

Question 15

A process costing system is used by a company that

Accepted Answer

A) produces heterogeneous products. 
B) produces items by special request of customers. 
C) produces homogeneous products. 
D) accumulates costs by job. 
A) produces heterogeneous products. 
B) produces items by special request of customers. 
C) produces homogeneous products. 
D) accumulates costs by job.

Question 16

Colorful Creations Corporation
The Colorful Creations Corporation makes wreaths in two departments: Forming and Decorating.Forming began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent complete as to conversion.During the month,6,500 wreaths were started.At month end,Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion.Assume Forming uses the weighted average method of process costing.Costs in the Forming Department are as follows:
Begonui
ng Wonk
in
Process
Costs:

Material                                      $ \$ 1,000 $
Conversion                                      1,500

Current
Costs:
Material                                      $ \$ 3,200 $
Conversion                                      5,045
The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent complete as to material and 90 percent complete as to conversion.The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion.Decorating uses the FIFO method of process costing,and costs associated with Decorating are:
Beginning WIP Inventory :

$\begin{array} { l l } \text { Trumferied In } & \$ 1,170 \ \text { Meteriel } & 4,320 \ \text { Canvenan } & 6,210 \end{array}$

Current Period:
Transferred In                        $?$
Material                        $67,745
 Conversion                       95,820

Refer to Colorful Creations Corporation.What was the cost transferred out of Forming during the month?

Accepted Answer

A) $5,341 
B) $6,419 
C) $8,245 
D) $8,330 
A) $5,341 
B) $6,419 
C) $8,245 
D) $8,330

Question 17

TriCities Corporation
TriCities Corporation adds material at the start to its production process and has the following information available for August:
             Beginning Work in Process Inventory       (40% complete as to conversion)      7,000 units                Started this period              32,000 units               Ending Work in Process Inventory       (25% complete as to conversion)       2,500 units               Transferred out       ?             
Refer to TriCities Corporation.Calculate equivalent units of production for conversion using weighted average.

Accepted Answer

A) 34,325 
B) 37,125 
C) 38,375 
D) 39,925 
A) 34,325 
B) 37,125 
C) 38,375 
D) 39,925

Question 18

Calculations for standard process costing are identical to those for FIFO process costing.

Accepted Answer

A) True 
 B)False

Question 19

Calculations for standard process costing are identical to those for weighted average process costing.

Accepted Answer

A) True 
 B)False

Question 20

Daniels Company started 9,000 units in March.The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs.Beginning Work in Process Inventory units were

Accepted Answer

A) 500. 
B) 600. 
C) 1,500. 
D) 2,000. 
A) 500. 
B) 600. 
C) 1,500. 
D) 2,000.

Distinguish between discrete and continuous production losses and the method of accounting for these losses.

Abnormal continuous losses are absorbed by all units in ending inventory and transferred out on a EUP basis.

A process costing system

Using FIFO costing,equivalent units of production (EUP)can be determined by subtracting EUP's in Beginning work in process from weighted average EUP.

A process costing system is used by a company that

Calculations for standard process costing are identical to those for FIFO process costing.

Calculations for standard process costing are identical to those for weighted average process costing.

Daniels Company started 9,000 units in March.The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs.Beginning Work in Process Inventory units were

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

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

Beginning Work in Process Inventory
	(45% complete as to conversion)	10,000 units
Started this period		120,000 units
Ending Work in Process Inventory	80% complete as to conversion)	8,200 units
Beginning Work in Process Inventory Costs:
	Material	$24,500
	Conversion	68,905
Current Period Costs:
	Material	$ 75,600
	Conversion	130,053

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

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

Work in process inventory, April 1:
Preceding department cost	$ 620
Processing cost	2,000 =2,620
Cost from preceding department in April	1,800
Material cost for April	4,800
Processing cost for April	10,200

Beginning Work in Process Inventory	(40% complete as to conversion)	7,000 units
Started this period		32,000 units
Ending Work in Process Inventory	(25% complete as to conversion)	2,500 units
Transferred out	?

Exam 6: Process Costing

Distinguish between discrete and continuous production losses and the method of accounting for these losses.

Abnormal continuous losses are absorbed by all units in ending inventory and transferred out on a EUP basis.

A process costing system

Using FIFO costing,equivalent units of production (EUP)can be determined by subtracting EUP's in Beginning work in process from weighted average EUP.

A process costing system is used by a company that

Calculations for standard process costing are identical to those for FIFO process costing.

Calculations for standard process costing are identical to those for weighted average process costing.

Daniels Company started 9,000 units in March.The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs.Beginning Work in Process Inventory units were

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