Question 1

In the computation of the cost per equivalent unit, the weighted-average method of process costing considers all the costs:

Accepted Answer

A) entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period 
B) costs that have entered work in process from the units started or transferred in during the current accounting period 
C) that have entered work in process during the current accounting period from the units started or transferred in minus the costs associated with ending inventory 
D) that have entered work in process during the current accounting period from the units started or transferred in plus the costs associated with ending inventory 
A) entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period 
B) costs that have entered work in process from the units started or transferred in during the current accounting period 
C) that have entered work in process during the current accounting period from the units started or transferred in minus the costs associated with ending inventory 
D) that have entered work in process during the current accounting period from the units started or transferred in plus the costs associated with ending inventory

Question 2

Answer the following questions using the information below:
The Morgan Models company manufacturers replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started production of 60,000 models. During the month, the firm completed 66,000 models, and transferred them to the Finishing Department. The firm ended the month with 22,000 models in ending inventory. There were 28,000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Morgan. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.
Beginning inventory:
   Manufacturing costs added during the accounting period:
  
-What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October?

Accepted Answer

A) $22,000 
B) $44,000 
C) $39,200 
D) $ 33,000 
A) $22,000 
B) $44,000 
C) $39,200 
D) $ 33,000

Question 3

An operation costing system would be applicable to:

Accepted Answer

A) batches of similar products where each batch is a variation of a single design 
B) the construction of a bridge 
C) a suit-making operation 
D) Both A and C are correct. 
A) batches of similar products where each batch is a variation of a single design 
B) the construction of a bridge 
C) a suit-making operation 
D) Both A and C are correct.

Question 4

The first-in, first-out (FIFO)process costing method assigns the cost of the previous accounting period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process.

Accepted Answer

A) True 
 B)False

Question 5

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

Accepted Answer

A) True 
 B)False

Question 6

Standard costing is NOT possible in a firm that uses process costing.

Accepted Answer

A) True 
 B)False

Question 7

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Zygon's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000. Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed.
Ending inventory was 50% complete as to conversion costs.
Required:
a. What is the total manufacturing cost per chip for June?
b. Allocate the total costs between the completed chips and the chips in ending inventory.

Accepted Answer

The answer of The Zygon Corporation was recently formed to...

Question 8

Answer the following questions using the information below:
The Daltry Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Daltry Tractor uses weighted-average costing.
Data for the Assembly Department for April 2012 are:
     Costs for April 2012:
  
-What is the direct materials cost per equivalent unit during April?

Accepted Answer

A) $1,250.00 
B) $1,241.94 
C) $575.00 
D) $581.25 
A) $1,250.00 
B) $1,241.94 
C) $575.00 
D) $581.25

Question 9

An example of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a:

Accepted Answer

A) clothing manufacturer 
B) corporation whose sole business activity is processing the customer deposits of several banks 
C) manufacturer of custom houses 
D) manufacturer of large TVs 
A) clothing manufacturer 
B) corporation whose sole business activity is processing the customer deposits of several banks 
C) manufacturer of custom houses 
D) manufacturer of large TVs

Question 10

A reason(s)why "pure" FIFO is rarely encountered in process costing is that:

Accepted Answer

A) FIFO is usually applied within a department to compute the cost of units transferred out 
B) the units transferred into the department during a given time period are usually carried at a single average unit cost 
C) tracking costs on a "pure" FIFO basis is very difficult 
D) All of these answers are correct. 
A) FIFO is usually applied within a department to compute the cost of units transferred out 
B) the units transferred into the department during a given time period are usually carried at a single average unit cost 
C) tracking costs on a "pure" FIFO basis is very difficult 
D) All of these answers are correct.

Question 11

The last step in a process-costing system is to compute cost per equivalent unit.

Accepted Answer

A) True 
 B)False

Question 12

The weighted-average process costing method does NOT distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

Accepted Answer

A) True 
 B)False

Question 13

Answer the following questions using the information below:
The Lumbar Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 150,000 chairs. During the month, the firm completed 170,000 chairs and transferred them to the Finishing Department. The firm ended the month with 20,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Lumbar.
-What were the equivalent units for materials for February?

Accepted Answer

A) 190,000 chairs 
B) 170,000 chairs 
C) 160,000 chairs 
D) 150,000 chairs 
A) 190,000 chairs 
B) 170,000 chairs 
C) 160,000 chairs 
D) 150,000 chairs

Question 14

What is the cost of the goods transferred out during October?

Accepted Answer

A) $363,000 
B) $330,000 
C) $340,000 
D) $375,000 
A) $363,000 
B) $330,000 
C) $340,000 
D) $375,000

Question 15

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

Accepted Answer

A) True 
 B)False

Question 16

Answer the following questions using the information below:
The Cuckoo Clock Shop manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Cuckoo Clock Shop uses weighted-average costing.
Data for the Assembly Department for June 2013 are:
     Costs for June 2013:
  
-What amount of direct materials costs is assigned to the ending Work-in-Process account for June?

Accepted Answer

A) $84,285 
B) $141,776.25 
C) $129,765 
D) $118,425 
A) $84,285 
B) $141,776.25 
C) $129,765 
D) $118,425

Question 17

Process-costing FIFO is usually applied to both the units entering a department and the units leaving a department.

Accepted Answer

A) True 
 B)False

Question 18

The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process.
Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs. Ending inventory was 30% complete.
Additional information about the two departments follows:
   Required:
Prepare a production cost worksheet using weighted-average costing for the finishing department.

Accepted Answer

The answer of The Laramie Factory produces expensive boots. It...

Question 19

In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under:

Accepted Answer

A) standard costing 
B) FIFO costing 
C) weighted-average costing 
D) operations costing 
A) standard costing 
B) FIFO costing 
C) weighted-average costing 
D) operations costing

Question 20

Answer the following questions using the information below:
Dustin Plastics, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.
Data for Department A for February 2012 are:
   Costs for Department A for February 2012 are:
  
-What is the unit cost per equivalent unit of beginning inventory in Department A?

Accepted Answer

A) $2,000 
B) $3,500 
C) $7,000 
D) $7,500 
A) $2,000 
B) $3,500 
C) $7,000 
D) $7,500

In the computation of the cost per equivalent unit, the weighted-average method of process costing considers all the costs:

An operation costing system would be applicable to:

The first-in, first-out (FIFO)process costing method assigns the cost of the previous accounting period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process.

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

Standard costing is NOT possible in a firm that uses process costing.

An example of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a:

A reason(s)why "pure" FIFO is rarely encountered in process costing is that:

The last step in a process-costing system is to compute cost per equivalent unit.

The weighted-average process costing method does NOT distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

What is the cost of the goods transferred out during October?

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

Process-costing FIFO is usually applied to both the units entering a department and the units leaving a department.

In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 17: Process Costing

In the computation of the cost per equivalent unit, the weighted-average method of process costing considers all the costs:

An operation costing system would be applicable to:

The first-in, first-out (FIFO)process costing method assigns the cost of the previous accounting period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process.

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

Standard costing is NOT possible in a firm that uses process costing.

An example of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a:

A reason(s)why "pure" FIFO is rarely encountered in process costing is that:

The last step in a process-costing system is to compute cost per equivalent unit.

The weighted-average process costing method does NOT distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

What is the cost of the goods transferred out during October?

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

Process-costing FIFO is usually applied to both the units entering a department and the units leaving a department.

In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters