Question 1

Activity-based costing (ABC) can be used only with process cost systems.

Accepted Answer

A) True 
 B)False

Question 2

Production costs chargeable to the Sanding Department in July in Magnum Company are $25,000 for materials, $17,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 15,000 for conversion costs.
Instructions
Compute the unit costs for materials and conversion costs.

Accepted Answer

The answer of Production costs chargeable to the Sanding Department...

Question 3

An important assumption in using ABC is that:

Accepted Answer

A)  production must take place on a continuous basis. 
B)  all costs in an activity should respond proportionately to changes in the activity level of the cost driver. 
C)  production must take place on a just-in-time basis. 
D)  all costs are pushed through each process when customer orders are received.

Question 4

Wilkinson Company has gathered the following information.  
Instructions
(a) Compute equivalent units of production for materials and for conversion costs.
(b) Determine the unit costs of production.
(c) Show the assignment of costs to units transferred out and in process.

Accepted Answer

The answer of Wilkinson Company has gathered the following information....

Question 5

Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

Accepted Answer

A) True 
 B)False

Question 6

At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows:
Instructions
(a) Compute the physical units for July.
(b) Compute the equivalent units of production for materials and conversion costs for September.

Accepted Answer

The answer of At Crenshaw Company, materials are entered at...

Question 7

In the month of June, a department had 12,000 units in beginning work in process that were 70% complete. During June, 48,000 units were transferred into production from another department. At the end of June there were 6,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

Accepted Answer

A)  48,000 equivalent units. 
B)  56,400 equivalent units. 
C)  54,000 equivalent units. 
D)  60,000 equivalent units.

Question 8

In a process cost system, unit costs are determined using a

Accepted Answer

A)  numerator of costs of each job. 
B)  denominator of units produced during the period. 
C)  denominator of units produced for the job. 
D)  denominator of units produced for the day.

Question 9

The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 425,000 units, completed and transferred out 400,000 units, and ending work in process 50,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

Accepted Answer

A)  450,000. 
B)  405,000. 
C)  420,000. 
D)  400,000.

Question 10

Many U.S. firms are switching to JIT processing because

Accepted Answer

A)  they desire a "push" approach to manufacturing. 
B)  it eliminates conversion costs. 
C)  it can reduce the funds invested in inventories. 
D)  it is a means of building up inventories.

Question 11

Conversion cost per unit equals $9.00. Total materials costs are $60,000. Equivalent units are 20,000. How much is the total manufacturing cost per unit?

Accepted Answer

A)  $12.00. 
B)  $9.00. 
C)  $6.00. 
D)  $3.00.

Question 12

The total units to be accounted for is computed by adding

Accepted Answer

A)  beginning units in process to units transferred out. 
B)  ending units in process to units started into production. 
C)  beginning units in process to units started into production. 
D)  ending units in process to total units accounted for.

Question 13

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Accepted Answer

A) True 
 B)False

Question 14

In the month of June, a department had 12,000 units in beginning work in process that were 70% complete. During June, 48,000 units were transferred into production from another department. At the end of June there were 6,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?

Accepted Answer

A)  48,000 units. 
B)  42,000 units. 
C)  54,000 units. 
D)  60,000 units.

Question 15

Zibba Company enters materials at the beginning of the process. In January, there was no beginning work in process, but there were 200 units in the ending work in process inventory. The number of units completed equals the number of

Accepted Answer

A)  units started. 
B)  units started less 200. 
C)  units started plus 200. 
D)  equivalent units.

Question 16

Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 5,000 units of ending work in process at 80% completion and 14,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?

Accepted Answer

A)  19,000. 
B)  18,000. 
C)  4,000. 
D)  13,000.

Question 17

In a process cost system, units to be accounted for in a department are equal to the

Accepted Answer

A)  number of units started or transferred into the department. 
B)  number of units transferred out of the department. 
C)  units in the beginning inventory plus the units started or transferred into the department. 
D)  ending inventory plus the units started or transferred into the department.

Question 18

In order to compute the physical unit flow, a company must first compute unit production costs.

Accepted Answer

A) True 
 B)False

Question 19

The Slicing Department production process shows:  How many units were started into production in Department 1?

Accepted Answer

A)  50,000. 
B)  90,000. 
C)  140,000. 
D)  130,000.

Question 20

Lowman Painting Company has the following production data for March:
$\bullet$Beginning work in process, 2,000 units
$\bullet$Units transferred out, 42,000
$\bullet$Units in ending work in process, 8,000, which are 80% complete for conversion costs
Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs.

Accepted Answer

The answer of Lowman Painting Company has the following production...

Exam 21: Process Costing

Activity-based costing (ABC) can be used only with process cost systems.

An important assumption in using ABC is that:

Wilkinson Company has gathered the following information. Instructions (a) Compute equivalent units of production for materials and for conversion costs. (b) Determine the unit costs of production. (c) Show the assignment of costs to units transferred out and in process.

Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

In a process cost system, unit costs are determined using a

Many U.S. firms are switching to JIT processing because

Conversion cost per unit equals $9.00. Total materials costs are $60,000. Equivalent units are 20,000. How much is the total manufacturing cost per unit?

The total units to be accounted for is computed by adding

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Zibba Company enters materials at the beginning of the process. In January, there was no beginning work in process, but there were 200 units in the ending work in process inventory. The number of units completed equals the number of

In a process cost system, units to be accounted for in a department are equal to the

In order to compute the physical unit flow, a company must first compute unit production costs.

The Slicing Department production process shows: How many units were started into production in Department 1?