Question 1

Using standard costs simplifies the calculations for which of the following in process-costing?

Accepted Answer

A)  direct materials 
B)  conversion costs 
C)  equivalent units 
D)  direct materials and conversion costs but standard costs not relevant for equivalent units 
E)  direct materials and conversion costs and equivalent units 
A)  direct materials 
B)  conversion costs 
C)  equivalent units 
D)  direct materials and conversion costs but standard costs not relevant for equivalent units 
E)  direct materials and conversion costs and equivalent units

Question 2

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.. 
E)  Both A and B 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.. 
E)  Both A and B are correct.

Question 3

Use the information below to answer the following question(s).
Father Time Clock Shop manufactures clocks on an automated assembly line. It utilizes 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 production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.
Data for the Assembly Department are:
  
-What amount of conversion costs are assigned to ending work-in-process for June?

Accepted Answer

A)  $160,986.38 
B)  $137,993.63 
C)  $141,111.00 
D)  $188,148.00 
E)  $111,110.63 
A)  $160,986.38 
B)  $137,993.63 
C)  $141,111.00 
D)  $188,148.00 
E)  $111,110.63

Question 4

Costing systems that are used for costing like or similar units of products in mass production are called

Accepted Answer

A)  inventory-costing systems. 
B)  job-costing systems. 
C)  process-costing systems. 
D)  weighted-average costing systems. 
E)  bulk costing systems. 
A)  inventory-costing systems. 
B)  job-costing systems. 
C)  process-costing systems. 
D)  weighted-average costing systems. 
E)  bulk costing systems.

Question 5

Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August
  
-Calculate equivalent units for direct materials using the FIFO method.

Accepted Answer

A)  100,000 units 
B)  350,000 units 
C)  400,000 units 
D)  450,000 units 
E)  515,000 units 
A)  100,000 units 
B)  350,000 units 
C)  400,000 units 
D)  450,000 units 
E)  515,000 units

Question 6

Answer the following questions using the information below:
The Townsend 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. Townsend Tractor uses weighted-average costing.
  
-What are the equivalent units for direct materials and conversion costs, respectively, for April?

Accepted Answer

A)  1,350 units; 1,350 units 
B)  1,850 units; 1,690 units 
C)  1,600 units; 1,550 units 
D)  250 units; 200 units 
E)  1,600 units; 1,350 units 
A)  1,350 units; 1,350 units 
B)  1,850 units; 1,690 units 
C)  1,600 units; 1,550 units 
D)  250 units; 200 units 
E)  1,600 units; 1,350 units

Question 7

Unit costs of the weighted-average and FIFO methods will differ significantly when

Accepted Answer

A)  direct materials or conversion costs per unit vary little from period to period. 
B)  physical inventory levels of work-in-process are small in relation to the number of units transferred out. 
C)  direct materials or conversion cost per unit vary greatly and physical inventory levels of work-in-process are large relative to the number of units transferred out. 
D)  conversion costs per unit vary greatly and physical inventory levels of work-in-process are small relative to the number of units transferred out. 
E)  direct materials or conversion costs per unit are similar and physical inventory of work-in-process are small relative to the number of units transferred in. 
A)  direct materials or conversion costs per unit vary little from period to period. 
B)  physical inventory levels of work-in-process are small in relation to the number of units transferred out. 
C)  direct materials or conversion cost per unit vary greatly and physical inventory levels of work-in-process are large relative to the number of units transferred out. 
D)  conversion costs per unit vary greatly and physical inventory levels of work-in-process are small relative to the number of units transferred out. 
E)  direct materials or conversion costs per unit are similar and physical inventory of work-in-process are small relative to the number of units transferred in.

Question 8

Use the information below to answer the following question(s).
Father Time Clock Shop manufactures clocks on an automated assembly line. It utilizes 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 production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.
Data for the Assembly Department are:
  
-What is the conversion cost per equivalent unit in June?

Accepted Answer

A)  $1,254.32 
B)  $1,430.99 
C)  $987.65 
D)  $1,282.83 
E)  $1,320.17 
A)  $1,254.32 
B)  $1,430.99 
C)  $987.65 
D)  $1,282.83 
E)  $1,320.17

Question 9

Which of the following is an assumption implicit in process-costing?

Accepted Answer

A)  All completed units receive more direct material inputs than units in process. 
B)  All completed units receive less direct material inputs than units in process. 
C)  Opening inventory is always nil, for the cost calculations. 
D)  Ending inventory is always nil, for the cost calculations. 
E)  All completed units receive the same amount of direct material inputs and the same amount of conversion costs. 
A)  All completed units receive more direct material inputs than units in process. 
B)  All completed units receive less direct material inputs than units in process. 
C)  Opening inventory is always nil, for the cost calculations. 
D)  Ending inventory is always nil, for the cost calculations. 
E)  All completed units receive the same amount of direct material inputs and the same amount of conversion costs.

Question 10

Which of the following is False concerning process costing?

Accepted Answer

A)  Process costing can only be used in manufacturing. 
B)  Process costing is used when outputs are homogeneous. 
C)  In process costing, labour and overhead costs are often combined and classified as conversion costs. 
D)  In process costing, some units will be incomplete at the end of the period. 
E)  Process costing averages unit costs of production. 
A)  Process costing can only be used in manufacturing. 
B)  Process costing is used when outputs are homogeneous. 
C)  In process costing, labour and overhead costs are often combined and classified as conversion costs. 
D)  In process costing, some units will be incomplete at the end of the period. 
E)  Process costing averages unit costs of production.

Question 11

Conceptually transferred-in costs from another department are similar to

Accepted Answer

A)  direct labour. 
B)  finished goods inventory. 
C)  direct labour and materials. 
D)  manufacturing overhead. 
E)  materials provided by external suppliers. 
A)  direct labour. 
B)  finished goods inventory. 
C)  direct labour and materials. 
D)  manufacturing overhead. 
E)  materials provided by external suppliers.

Question 12

Caulfield Ltd. has two production departments in the manufacturing of its products. In the first department, Fabricating, component parts are manufactured. In the second department, Assembly, the components are assembled and finished. Direct materials are added at the start of production in Fabricating and at the 90% point of the process in Assembly. During July the beginning work-in-process of 50,000 units in the Fabricating Department was 40% complete with respect to conversion. The Assembly Department had 38,000 units in beginning work in process; these units were 85% complete with respect to conversion. On July 31, the ending work-in-process inventory was 20% complete in the Fabricating Department and 40% complete in the Assembly Department. Conversion costs are added evenly throughout both departments.
Beginning work-in-process in the Fabricating Department had costs assigned of $290,000 for direct materials and $52,000 for conversion. In the Assembly Department, the beginning work in process included $318,440 for transferred-in costs and $8,550 for conversion costs. Additional information about the two departments follows:
       Required:
Determine the assignment of costs to units transferred-out and ending inventory , using weighted-average for the Assembly Department and FIFO for the Finishing Department.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& @#IMG-DLM& Assignment of costs:
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Question 13

Use the information below to answer the following question(s).
Canadian Oil Company manufactures cooking oils. All direct materials are added at the beginning of the production process. The company currently uses the FIFO method. Data for the month of July is listed below.
  
-What is the amount of direct materials assigned to ending work-in-process?

Accepted Answer

A)  $63,000 
B)  $42,000 
C)  $36,600 
D)  $21,050 
E)  $17,000 
A)  $63,000 
B)  $42,000 
C)  $36,600 
D)  $21,050 
E)  $17,000

Question 14

Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August
  
-How many units must be accounted for during the period, assuming a FIFO cost flow assumption?

Accepted Answer

A)  450,000 units 
B)  400,000 units 
C)  359,000 units 
D)  300,000 units 
E)  275,000 units 
A)  450,000 units 
B)  400,000 units 
C)  359,000 units 
D)  300,000 units 
E)  275,000 units

Question 15

Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August
  
-Calculate the equivalent units for conversion costs using the weighted-average method.

Accepted Answer

A)  300,000 units 
B)  350,000 units 
C)  382,500 units 
D)  450,920 units 
E)  499,000 units 
A)  300,000 units 
B)  350,000 units 
C)  382,500 units 
D)  450,920 units 
E)  499,000 units

Question 16

Use the information below to answer the following question(s).
Father Time Clock Shop manufactures clocks on an automated assembly line. It utilizes 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 production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.
Data for the Assembly Department are:
  
-How many cushions were started during May?

Accepted Answer

A)  60,000 cushions 
B)  120,000 cushions 
C)  140,000 cushions 
D)  180,000 cushions 
E)  223,000 cushions 
A)  60,000 cushions 
B)  120,000 cushions 
C)  140,000 cushions 
D)  180,000 cushions 
E)  223,000 cushions

Question 17

Bag Company had a beginning inventory of 4,000 bags with costs of $18,000 on January 1. The direct materials were complete and all overhead had been assigned; however, only 40 percent of direct manufacturing labour was added in the prior period. Another 20,000 units were started and completed during the current period. Unit costs are as follows: materials, $8.00; labour, $9.00; and overhead, $5.00. What is the total cost of goods transferred out using the FIFO method?

Accepted Answer

A)  $440,000 
B)  $472,400 
C)  $479,600 
D)  $491,600 
E)  $519,500 
A)  $440,000 
B)  $472,400 
C)  $479,600 
D)  $491,600 
E)  $519,500

Question 18

The following production-cost worksheet has been prepared for the month of December for Ag Chemical.
   Assignment of costs:
   Work in process, ending
   Required:
a. Record costs of materials put into process for December.
b. Record conversion costs put into process in December.
c. Record goods transferred-out to finished goods for December.

Accepted Answer

The answer of The following production-cost worksheet has been prepared...

Question 19

What is meant by the term "prime cost pool"?

Accepted Answer

A prime cost is a direct cost. In most p

Question 20

Use the information below to answer the following question(s).
Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August
  
-Calculate equivalent units for direct materials using the weighted-average method.

Accepted Answer

A)  100,000 units 
B)  350,000 units 
C)  400,000 units 
D)  450,000 units 
E)  499,000 units 
A)  100,000 units 
B)  350,000 units 
C)  400,000 units 
D)  450,000 units 
E)  499,000 units

Using standard costs simplifies the calculations for which of the following in process-costing?

An operation costing system would be applicable to

Costing systems that are used for costing like or similar units of products in mass production are called

Use the information below to answer the following question(s). Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August -Calculate equivalent units for direct materials using the FIFO method.

Unit costs of the weighted-average and FIFO methods will differ significantly when

Which of the following is an assumption implicit in process-costing?

Which of the following is False concerning process costing?

Conceptually transferred-in costs from another department are similar to

What is meant by the term "prime cost pool"?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 17: Process Costing

Using standard costs simplifies the calculations for which of the following in process-costing?

An operation costing system would be applicable to

Costing systems that are used for costing like or similar units of products in mass production are called

Use the information below to answer the following question(s). Apex Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for August -Calculate equivalent units for direct materials using the FIFO method.

Unit costs of the weighted-average and FIFO methods will differ significantly when

Which of the following is an assumption implicit in process-costing?

Which of the following is False concerning process costing?

Conceptually transferred-in costs from another department are similar to

What is meant by the term "prime cost pool"?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters