Question 1

Under the first-in,first-out (FIFO)method,the cost of equivalent units of production is calculated by ________.

Accepted Answer

A)  summing up only the transferred in costs of each department 
B)  combining beginning inventory costs with current period costs 
C)  considering only the transferred out costs of each department 
D)  accounting for beginning inventory costs separately from current period costs 
A)  summing up only the transferred in costs of each department 
B)  combining beginning inventory costs with current period costs 
C)  considering only the transferred out costs of each department 
D)  accounting for beginning inventory costs separately from current period costs

Question 2

The Polishing Department of Gaura,Inc.had 18,000 units in process on June 1 and received 30,000 units from the Machining Department.What is the number of units to account for by the Polishing Department for June? The company uses the FIFO costing method.

Accepted Answer

A)  30,000 units 
B)  18,000 units 
C)  48,000 units 
D)  12,000 units 
A)  30,000 units 
B)  18,000 units 
C)  48,000 units 
D)  12,000 units

Question 3

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

In a process costing system,costs can be controlled with the aid of a production cost report.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following formulas is used to calculate the cost per equivalent unit of production (EUP)for direct materials? The weighted-average method is used.

Accepted Answer

A)  Cost per EUP for direct materials = Total conversion costs / Equivalent units of production for direct materials 
B)  Cost per EUP for direct materials = Total direct materials costs / Equivalent units of production for direct materials 
C)  Cost per EUP for direct materials = Total transferred in costs / Equivalent units for transferred in 
D)  Cost per EUP for direct materials = Total direct materials costs / Equivalent units of production for conversion costs 
A)  Cost per EUP for direct materials = Total conversion costs / Equivalent units of production for direct materials 
B)  Cost per EUP for direct materials = Total direct materials costs / Equivalent units of production for direct materials 
C)  Cost per EUP for direct materials = Total transferred in costs / Equivalent units for transferred in 
D)  Cost per EUP for direct materials = Total direct materials costs / Equivalent units of production for conversion costs

Question 6

How is a production cost report prepared using the FIFO method?

Accepted Answer

@#LAT-DLM& 2.Equivalent units of production must b

Question 7

The production cost report for Department 1 shows that $159,000 was assigned to the 38,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 1.Process costing is used

Accepted Answer

A) True 
 B)False

Question 8

Pestiferous Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,48,000 fl.oz.of chemicals were started in production.Of these,40,000 fl.oz.were completed,and 8000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly throughout the process. At the end of January,the equivalent unit data for the Mixing Department were as follows:
  * Percent complete for conversion costs: 44%
In addition to the above,the cost per equivalent unit were $1.35 for direct materials and $5.30 for conversion costs.Using this data,calculate the full cost of the ending WIP balance in the Mixing Department.The weighted-average method is used.

Accepted Answer

A)  $43,520 
B)  $10,800 
C)  $29,456 
D)  $64,800 
A)  $43,520 
B)  $10,800 
C)  $29,456 
D)  $64,800

Question 9

Which of the following is used to calculate the number of units to account for under the first-in,first-out (FIFO)method of inventory valuation of process costing? This is the second department in a company using process costing.

Accepted Answer

A)  To account for = Beginning balance + Started and completed + In process 
B)  To account for = Beginning balance + Amount transferred in 
C)  To account for = Beginning balance + In process 
D)  To account for = Beginning balance + Started and completed 
A)  To account for = Beginning balance + Started and completed + In process 
B)  To account for = Beginning balance + Amount transferred in 
C)  To account for = Beginning balance + In process 
D)  To account for = Beginning balance + Started and completed

Question 10

Cost amounts that are transferred out of one department become the transferred in cost for the next department.

Accepted Answer

A) True 
 B)False

Question 11

Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced.

Accepted Answer

A)  a process costing system 
B)  a job order costing system 
C)  both of the above systems 
D)  neither of the above systems 
A)  a process costing system 
B)  a job order costing system 
C)  both of the above systems 
D)  neither of the above systems

Question 12

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for transferred in units in beginning inventory are zero because ________.

Accepted Answer

A)  these units are transferred back to the previous department for further processing in the current period 
B)  these units are expected to be sold by the receiving department without subjecting them to further processing 
C)  no additional costs for these units were incurred in the current period 
D)  costs involved in inter-departmental transfers are accounted for only once when sales are made to customers 
A)  these units are transferred back to the previous department for further processing in the current period 
B)  these units are expected to be sold by the receiving department without subjecting them to further processing 
C)  no additional costs for these units were incurred in the current period 
D)  costs involved in inter-departmental transfers are accounted for only once when sales are made to customers

Question 13

Herbicida Manufacturing produces a chemical herbicide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,40,000 fl.oz.of chemicals were started in production.Of these,34,000 fl.oz.were completed,and 6000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly throughout the process.The weighted-average method is used. At the end of the month,Herbicida calculated equivalent units in the Mixing Department as shown below:
$$\begin{array} { | l | r | r | r | } 
\hline \text { UNITS } & &  { \text { Equivalent Units } } & \text { Equivalent Units } \
\hline \text { Units accounted for } & & \text { Direct Materials Costs } & \text { Conversion Costs } \
\hline \begin{array} { l r r } 
\text { Completed and transferred } \
\text { but }
\end{array} & 34,000 & 34,000 & 34,000 \
\hline \text { Ending work-in-process* } & \underline { 6000 } & \underline { 6000 } & \underline { 3600 } \
\hline & 40,000 & 40,000 & 37,600 \
\hline
\end{array}$$ * Percent complete for direct materials costs: 100%
Percent complete of completion for conversion costs: 60%
During January,the Mixing Department incurred $49,000 in direct materials costs and $213,000 in conversion costs.How much was the cost per equivalent unit for materials and for conversion costs?
(Use the weighted-average method and round your answer to the nearest cent.)

Accepted Answer

A)  $8.17 per EUP for direct materials and $5.33 per EUP for conversion costs 
B)  $1.23 per EUP for direct materials and $6.26 per EUP for conversion costs 
C)  $1.44 per EUP for direct materials and $6.26 per EUP for conversion costs 
D)  $1.23 per EUP for direct materials and $5.66 per EUP for conversion costs 
A)  $8.17 per EUP for direct materials and $5.33 per EUP for conversion costs 
B)  $1.23 per EUP for direct materials and $6.26 per EUP for conversion costs 
C)  $1.44 per EUP for direct materials and $6.26 per EUP for conversion costs 
D)  $1.23 per EUP for direct materials and $5.66 per EUP for conversion costs

Question 14

If 34,000 units are 80% complete with respect to direct materials,then the equivalent units of production for direct materials are ________.The weighted-average method is used.

Accepted Answer

A)  34,000 units 
B)  27,200 units 
C)  6800 units 
D)  40,800 units 
A)  34,000 units 
B)  27,200 units 
C)  6800 units 
D)  40,800 units

Question 15

The equivalent units of production for direct materials and conversion costs must be the same.

Accepted Answer

A) True 
 B)False

Question 16

Zucchero Sugar,Inc.has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from the month of August for the Recovery Department are as follows: $$\begin{array} { | l | r | } 
\hline & { \text { Metric Tons } } \
\hline \text { Beginning Work-in-Process Inventory } & 0 \
\hline \text { Transferred in } & 22,000 \
\hline \text { Ending Work-in-Process Inventory } & 6000 \
\hline
\end{array}$$ $$\begin{array} { | l | r | } 
\hline &  { \text { Costs } } \
\hline \text { Beginning Work-in-Process Inventory } & \$ 0 \
\hline \text { Costs added during August } & \
\hline \text { Direct materials } & 520,000 \
\hline \text { Direct labor } & 220,000 \
\hline \text { Manufacturing overhead } & \underline { 125,000 } \
\hline \text { Total costs added during August } & \$ 865,000 \
\hline
\end{array}$$ The ending Work-in-Process Inventory is 100% and 85% complete with respect to direct materials and conversion costs,respectively.The weighted-average method is used.How many metric tons of sugar were refined and transferred to the Packaging Department in August?

Accepted Answer

A)  22,000 metric tons 
B)  6000 metric tons 
C)  16,000 metric tons 
D)  28,000 metric tons 
A)  22,000 metric tons 
B)  6000 metric tons 
C)  16,000 metric tons 
D)  28,000 metric tons

Question 17

Both job order costing and process costing track the product costs of direct materials,direct labor,and manufacturing overhead through three inventory accounts on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

In a process costing system with multiple departments,one Work-in-Process Inventory account is maintained and the costs are transferred when a job is completed.

Accepted Answer

A) True 
 B)False

Question 19

During September,the Filtering Department of Tithonia,Inc.had a beginning Work-in-Process Inventory of 600 units with costs of $140,000.During the month,it started and completed 800 units.It had 220 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in September under the first-in,first-out (FIFO)method?

Accepted Answer

A)  600 units 
B)  1020 units 
C)  1620 units 
D)  380 units 
A)  600 units 
B)  1020 units 
C)  1620 units 
D)  380 units

Question 20

The Raw Materials Inventory account is debited when direct materials are issued for production.Process costing is used.

Accepted Answer

A) True 
 B)False

Exam 20: Process Costing

Under the first-in,first-out (FIFO)method,the cost of equivalent units of production is calculated by ________.

The Polishing Department of Gaura,Inc.had 18,000 units in process on June 1 and received 30,000 units from the Machining Department.What is the number of units to account for by the Polishing Department for June? The company uses the FIFO costing method.

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

In a process costing system,costs can be controlled with the aid of a production cost report.

Which of the following formulas is used to calculate the cost per equivalent unit of production (EUP)for direct materials? The weighted-average method is used.

How is a production cost report prepared using the FIFO method?

The production cost report for Department 1 shows that $159,000 was assigned to the 38,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 1.Process costing is used

Which of the following is used to calculate the number of units to account for under the first-in,first-out (FIFO)method of inventory valuation of process costing? This is the second department in a company using process costing.

Cost amounts that are transferred out of one department become the transferred in cost for the next department.

Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced.

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for transferred in units in beginning inventory are zero because ________.

If 34,000 units are 80% complete with respect to direct materials,then the equivalent units of production for direct materials are ________.The weighted-average method is used.

The equivalent units of production for direct materials and conversion costs must be the same.

Both job order costing and process costing track the product costs of direct materials,direct labor,and manufacturing overhead through three inventory accounts on the balance sheet.

In a process costing system with multiple departments,one Work-in-Process Inventory account is maintained and the costs are transferred when a job is completed.

The Raw Materials Inventory account is debited when direct materials are issued for production.Process costing is used.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters