Question 1

Figure 5-6
Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for April follows: Work in progress, April 1:
$\begin{array}{lr}
\text { Units }(35 \% \text { complete) } & 5,000 \
\text { Direct materials } & £ 24,000 \
\text { Direct labour } & £ 30,000 \
\text { Overhead } & £ 10,000
\end{array}$ During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: $\begin{array}{lr}
\text { Direct materials } & £ 90,000 \
\text { Direct labour } & 120,000 \
\text { Overhead } & 30,000
\end{array}$ Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30.
-Refer to Figure 5-6. Kramer's total cost per equivalent unit of production would be

Accepted Answer

A) £12.16. 
B) £11.26. 
C) £9.76. 
D) £6.52.

Question 2

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

Accepted Answer

A) process costing 
B) contract costing 
C) variable costing 
D) job-order costing

Question 3

Figure 5-4
The following information is available for Department X for August: $\begin{array}{lr}
\text { Work in progress, August } 1\
\text { Materials } & £ 8,000 \
\text { Conversion costs } & £ 15,000\
\
\text { Costs added during August:}\
\text { Materials}& £ 28,000 \
\text { Conversion costs}&£ 25,000 \
\
\text { Equivalent units of production (weighted average):}\
\text { Materials}&4,000\
\text { Conversion}&5,000\

\end{array}$
-Refer to Figure 5-4. Department X's cost per equivalent unit for conversion using the weighted average method would be

Accepted Answer

A) £8.00. 
B) £5.00. 
C) £3.00. 
D) £9.00.

Question 4

The sum of direct labour and factory overhead is referred to as

Accepted Answer

A) period costs. 
B) conversion costs. 
C) prime costs. 
D) direct product costs.

Question 5

Equivalent units of production are

Accepted Answer

A) complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration. 
B) the average number of units produced in a given period. 
C) continuously measured in a total quality environment. 
D) computed in both job-order and process cost systems.

Question 6

Figure 5-10
The following information is available: $\begin{array}{lr}
\text { Units in process at the beginning of the month } & 2,000 \
\text { Units in process at the end of the month } & 4,000 \
\text { Units started during the month } & 30,000
\end{array}$ Materials are added at the beginning of the process.
-Refer to Figure 5-10. Beginning and ending units were 60 per cent converted. How many equivalent units for materials would there be using the FIFO method?

Accepted Answer

A) 36,000 units 
B) 34,000 units 
C) 30,000 units 
D) 29,200 units

Question 7

The two methods used to determine equivalent units of production are

Accepted Answer

A) weighted average and FIFO. 
B) weighted average and LIFO. 
C) FIFO and LIFO. 
D) FIFO and specific identification.

Question 8

Figure 5-2 $\begin{array}{lr}
 & \text { Units } \
\text { Work in progress, September } 1 \text { ( } 40 \% \text { complete }) & 5,000 \
\text { Started in September } & 20,000 \
\text { Work in progress, September } 30(60 \% \text { complete }) & 8,000
\end{array}$ Materials are added at the beginning of the process.
-Refer to Figure 5-2. Equivalent units of production for materials using the weighted average method would be

Accepted Answer

A) 29,800. 
B) 28,000. 
C) 33,000. 
D) 25,000.

Question 9

If beginning inventory contained 2,000 units of product that were judged to be 40 per cent complete as to labour, the equivalent units of production for labour during the current period under the FIFO method for these 2,000 units are

Accepted Answer

A) 2,000 units. 
B) 800 units. 
C) 1,200 units. 
D) 400 units.

Question 10

Figure 5-7
The Corn Ltd. produces a product that passes through two processes. During April, the first department transferred 40,000 units to the second department. The cost of the units transferred was £60,000. Materials are added uniformly in the second process. The following information was provided about the second department's operations during April: Units, beginning work in progress$\quad$$\quad$8,000
Units, ending work in progress$\quad$$\quad$$\quad$11,000
-Refer to Figure 5-7. Units started and completed in Corn Corporation's second department during June would be

Accepted Answer

A) 48,000. 
B) 37,000. 
C) 29,000. 
D) 55,000.

Question 11

Beginning inventory for the month contained 2,000 units that were 70 per cent complete with respect to materials. During the month, 60,000 units were completed and transferred out. Ending inventory contained 3,000 units, 20 per cent complete with respect to materials. The weighted average equivalent units of production for materials for the month would be

Accepted Answer

A) 62,400 
B) 63,000 
C) 60,600 
D) 60,000

Question 12

Figure 5-2 $\begin{array}{lr}
 & \text { Units } \
\text { Work in progress, September } 1 \text { ( } 40 \% \text { complete }) & 5,000 \
\text { Started in September } & 20,000 \
\text { Work in progress, September } 30(60 \% \text { complete }) & 8,000
\end{array}$ Materials are added at the beginning of the process.
-Refer to Figure 5-2. Equivalent units of production for conversion costs using the weighted average method would be

Accepted Answer

A) 25,000. 
B) 27,800. 
C) 26,800. 
D) 21,800.

Question 13

Figure 5-11
Gill Ltd. adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for March 2004 are as follows: 
$\begin{array}{lrrr}
&&\text { Costs }\
&\text { Units } & \text { Materials } & \text { Conversion } \
\text { Work in progress, March 1 } & 25,000 & £ 68,750 & £ 167,650 \
\text { Started during March } & 100,000 & 300,000 & 903,350 \
\text { Work in nrogress March } 31 & 10000 & &
\end{array}$ Beginning inventory was 70 per cent complete. Ending inventory was 40 per cent complete.
-Refer to Figure 5-11. How many equivalent units for conversion costs would there be for Gill Ltd. in March using the FIFO method?

Accepted Answer

A) 100,000 units 
B) 111,500 units 
C) 125,000 units 
D) 101,500 units

Question 14

Figure 5-9
The following information is available for Department Z for the month of July: $\begin{array}{lcc}
&\text { Units }&\text {Cost }\
\text { Work in progress, July } 1 \text { (70\% complete) } & 5,000 \
 \text { Direct materials } &&£ 6,000 \
 \text { Direct labour } &&3,000 \
 \text { Manufacturing overhead } &&4,000 \
 \text { Total work in progress, July } 1 &&£ 13,000 \
\
 \text { Started in production during July}&20,000\
\
 \text { Costs added:}\
 \text { Direct materials}&&£ 18,000\
 \text { Direct labour}&&8,000\
 \text { Manufacturing overhead}&&10,000\
 \text { Total costs added during July}&&£ 36,000\
\
 \text { Work in progress, July 31 , ( $ 80 \% $ complete)}&2,000\
\end{array}$ Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
-Refer to Figure 5-9. Department Z's cost of goods transferred out using the FIFO method would be

Accepted Answer

A) £45,775. 
B) £45,540. 
C) £44,500. 
D) £40,250.

Question 15

Barr, Inc., manufactures a product that passes through two processes: mixing and packaging. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows: Work in progress, June 1
$\begin{array}{lr}
\text { Units ( } 60 \% \text { complete) } & 5,000 \
\text { Direct materials } & £ 20,000 \
\text { Direct labour } & £ 24,000 \
\text { Overhead } & £ 4,000
\end{array}$ During June, 80,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June: $\begin{array}{lr}
\text { Direct materials } & £ 180,000 \
\text { Direct labour } & 200,000 \
\text { Overhead } & 59,200
\end{array}$ At June 30, 12,000 units that were 10 per cent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places. 
a.Determine equivalent units of production for June.
b.Determine June's total costs to account for.
c.Determine total cost per equivalent unit of production.
d.Determine the cost of goods transferred to the packaging department.
e.Determine the cost of June's ending work in progress for the mixing department.

Accepted Answer

The answer of Barr, Inc., manufactures a product that passes...

Question 16

When computing equivalent units of production, the method that combines partially completed units in beginning inventory with current period production is the

Accepted Answer

A) FIFO method. 
B) LIFO method. 
C) weighted average method. 
D) specific identification method.

Exam 5: Process Costing