Question 1

CUPORAMA Corp. manufactures cups. The company’s manufacturing operations and costs applied to products for April were:
$\begin{array}{|c|c|c|c|}
\hline & \text { Moulding } & \text { Heat-treat } & \text { Finishing } \
\hline \text { Direct labour } & \$ 25,000 & \$ 12,500 & \$ 7,500 \
\hline \text { actory overhead } & 30,000 & 17,500 & 12,600 \
\hline \text { otal } & \$ 55,000 & \$ 30,000 & \$ 20,10 \
\hline
\end{array}$ Three types of cups were produced in April.The quantities and direct materials costs were:
$\begin{array}{lcc}
\text { Type } & \text { Quantity } & \text { Direct Materials } \
\hline \text { Casts } & 5,000 & \$ 15,000 \
\text { Cups } & 7,000 & 22,470 \
\text { Mugs } & 8,000 & 32,500
\end{array}$ Casts are produced in the Moulding Department.Cups pass through the Moulding and Finishing departments.Mugs pass through all three departments.An operations costing system is used.
-Refer to the figure.What is CUPORAMA's conversion cost per unit for the heat-treat operation,rounded to two decimal places?

Accepted Answer

A)  $1.50
B)  $2.00
C)  $2.50
D)  $3.75  D

Question 2

What is the appropriate cost accounting system to use when inventory items are produced on an assembly line?

Accepted Answer

A)  job-order costing
B)  process costing
C)  weighted average
D)  perpetual method B

Question 3

Under what conditions might activity-based costing have a role in process costing settings?

Accepted Answer

A)  when there are products produced with little diversity
B)  when there are products produced with homogeneous processes
C)  when multiple products are being produced
D)  when only one product is being produced C

Question 4

Which of the following determines whether the costs assigned to units transferred out and to units in ending work in process are equal to the costs in beginning work in process plus the manufacturing costs incurred in the current period?

Accepted Answer

A)  equivalent unit of output
B)  cost reconciliation
C)  batch production process
D)  transferred-in costs

Question 5

What costs are included in the cost per equivalent unit using the weighted average method?

Accepted Answer

A)  cost of goods sold and current costs
B)  beginning work in process and ending work in process
C)  current costs and ending work in process
D)  current costs and beginning work in process

Question 6

Pelosi Company manufactures chairs. The following information was given for the company:
$\begin{array}{lr}
\text { Units, beginning work in process } & 0 \
\text { Units started } & 20,000 \
\text { Units completed } & ?\
\text { Units, ending work in process } & 5,000 \
\text { Cost of direct materials } & \$ 440,000 \
\text { Cost of conversion } & \$ 64,000
\end{array}$

Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete.
-Refer to the figure.What are the costs per unit for materials and conversion,respectively?

Accepted Answer

A)  $11; $1.60
B)  $22; $4
C)  $29.33; $4.27
D)  $88; $64

Question 7

-Refer to the figure.What is Department A's conversion cost per unit using the weighted average method?

Accepted Answer

A)  $2.18
B)  $2.22
C)  $2.31
D)  $3.20

Question 8

What is the term for the whole units that could have been produced in a period given the amount of manufacturing inputs used?

Accepted Answer

A)  FIFO units
B)  transferred-in units
C)  weighted average units
D)  equivalent units of output

Question 9

Gill Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for March are as follows:
$$\begin{array} { | l | c | c | c | } 
\hline & & { \text { Costs } } \
\hline & \text { Units } & \text { Materials } & \text { Conversion } \
\hline \text { Work in process, March 1 } & 25,000 & \$ 68,750 & \$ 167,650 \
\hline \text { Started during March } & 100,000 & 300,000 & 903,350 \
\hline \text { Work in process, March 31 } & 10,000 & & \
\hline
\end{array}$$
Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete.
-Refer to the figure.How many equivalent units for conversion costs would there be for Gill Corporation in March using the FIFO method?

Accepted Answer

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

Question 10

Which of the following process costing methods is simpler to use?

Accepted Answer

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

Question 11

Takon manufactures specialized plastic boxes in two processes: Moulding and Packaging. In the Packaging Department, materials are added at the end of the process. The following data are given:
$\begin{array}{lcccc}
&&&\text { Costs }\
&\underline{\text { Units }} &\underline{\text { Trans.-in }} &\underline{\text { Materials }} &\underline{\text { Conv. }}\
\text { Work in process, October } 1 & 30 & \$ 1,590 & \$ 0 & \$ 513 \
\text { Transferred in during October } & ? & & & \
\text { Completed during October } & 105 & & & \
\text { Work in process, October } 31 & 15 & &  \
\text { Costs added during October } & & \$ 4,410 & \$ 1,050 &\$ 1,767
\end{array}$

The conversion process on the beginning inventory is 70 percent completed and the ending inventory is 60 percent completed.
-Refer to the figure.What would be Takon's equivalent units for conversion using FIFO?

Accepted Answer

A)  9
B)  93
C)  105
D)  114

Question 12

What does JIT manufacturing emphasize?

Accepted Answer

A)  continuous improvement,elimination of waste,and reduction of work-in-process inventories
B)  continuous improvement,elimination of waste,and increase of work-in-process inventories
C)  push inventory system,elimination of waste,and reduction of work-in-process inventories
D)  continuous improvement,collect cost by job,and reduction of work-in-process inventories

Question 13

Irvin Corporation’s Mixing Department began January 2011 with 10,000 gallons of product (40 percent completed) in process. During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed).
-Refer to the figure.If materials were added when the units were 80 percent complete,how many equivalent units of production for materials would there be for Irvin using the weighted average costing method?

Accepted Answer

A)  95,000 units
B)  105,500 units
C)  107,000 units
D)  110,000 units

Question 14

Peck Corporation produces a product that passes through two processes. During October, the first department transferred 20,000 units to the second department. The cost of the units transferred was $30,000. Materials are added uniformly in the second process. The following information is provided about the second department’s operations during October:
Units, beginning work in process$\quad$$\quad$4,000
Units, ending work in process$\quad$$\quad$$\quad$5,500
-Refer to the figure.What is the number of units started in the second department during October?

Accepted Answer

A)  14,500 units
B)  16,000 units
C)  20,000 units
D)  24,000 units

Question 15

Ring Company produces two types of product: Small and Large. Two work orders for two batches of the products are shown below, along with some additional cost information:
$\begin{array}{lcc}
&\text { Small }&\text { Large } \
&\text {Work Order } 10&\text { Work Order } 11\
\hline\text { Direct materials (actual costs) } & \$ 45,000 & \$ 75,000 \
\text { Applied conversion costs: } & & \
\text { Mixing } &?& ? \
\text { Cooking } & \$ 12,000  & \$ 12,000 \
\text { Bottling } & \$ 10,000 & \$ 15,000 \\
\text { Batch size (bottles) }& 5,000 & 5,000
\end{array}$
 In the Mixing Department,conversion costs are applied on the basis of direct labour hours.Budgeted conversion costs for the department for the year were $50,000 for labour and $125,000 for overhead.Budgeted direct labour hours were 2,500.It takes three minutes to mix the ingredients needed for each bottle.
Small (Work Order 10)and Large (Work Order 11)flow through the Mixing Department first,then through the Cooking and Bottling departments.
-Refer to the figure.What is Ring Company's unit cost of Small?

Accepted Answer

A)  $3.50
B)  $16.90
C)  $23.90
D)  $70.00

Question 16

The Dodd Company uses a weighted average process costing system. The following information was reported for the Assembly process for July. Materials are added at the beginning of the process and are 100%.
$\begin{array}{|l|c|l|}
\hline{\text { Units: }} & \text { Units } &{\begin{array}{c}
\text { \% Complete for } \
\text { Conversions }
\end{array}} \
\hline \text { Work in process, } 7 / 1 & 60,000 & 15 \% \
\hline \text { Started } & 105,000 & \
\hline \text { Work in process, } 7 / 31 & 40,000 & 20 \%\\hline & & \
\hline \text { Costs: } & & \
\hline & \text { Materials } & \text { Conversion } \\hline \text { Beginning work in process } & \$ 16,500 & \$ 33,250 \
\hline \text { Current costs } & \$ 643,500 & \$ 332,500\
\hline 
\end{array}$
-Refer to the figure.What is the cost assigned to the units completed and transferred to finishing?

Accepted Answer

A)  $708,750
B)  $777,500
C)  $843,750
D)  $976,000

Question 17

The Dodd Company uses a weighted average process costing system. The following information was reported for the Assembly process for July. Materials are added at the beginning of the process and are 100%.
$\begin{array}{|l|c|l|}
\hline{\text { Units: }} & \text { Units } &{\begin{array}{c}
\text { \% Complete for } \
\text { Conversions }
\end{array}} \
\hline \text { Work in process, } 7 / 1 & 60,000 & 15 \% \
\hline \text { Started } & 105,000 & \
\hline \text { Work in process, } 7 / 31 & 40,000 & 20 \%\\hline & & \
\hline \text { Costs: } & & \
\hline & \text { Materials } & \text { Conversion } \\hline \text { Beginning work in process } & \$ 16,500 & \$ 33,250 \
\hline \text { Current costs } & \$ 643,500 & \$ 332,500\
\hline 
\end{array}$
-Refer to the figure.What are the equivalent units for materials?

Accepted Answer

A)  100,000
B)  125,000
C)  133,000
D)  165,000

Question 18

The following information pertains to Fry Corporation: $\begin{array}{llr}
&  \text {Units   } &\
 \text { Work in process, December 1 (20\% complete) } &3,000\
 \text { Staited in December } &24,000
\end{array}$

Materials are added at the beginning of the process.
If 18,000 units were completed during the month,what would be the ending work in process at December 31?

Accepted Answer

A)  9,000 units
B)  6,000 units
C)  3,000 units
D)  15,000 units

Question 19

Wall Company manufactures a product that passes through two processes.The following information is available for the first department for April:
All materials are added at the beginning of the process.
Beginning work in process consisted of 7,000 units that were 90 percent complete with respect to conversion.

Ending work in process consisted of 3,000 units that were 40 percent complete with respect to conversion.

There were 35,000 units started in process during the month.
 
a.Prepare a physical flow schedule.
b.Compute equivalent units using the weighted average method.

Accepted Answer

The answer of Wall Company manufactures a product that passes...

Question 20

The following information is available for Department A for the month of January:
$\begin{array}{lcc}
& \underline{\text {Units}}&
\underline{\text{cost}} \
\text { Work in process, January } 1 \text { (70\% complete) } & 10,000 & \
 \text { Direct materials } & & \$ 36,000 \
 \text { Direct labour } & & 18,000 \
\text { Manufacturing overhead } & &\underline{ 24,000} \
 \text { Total work in process, January } 1 & &\underline{ \$ 78,000 }\
 \begin{array}{l}
\text { Started in production during January } \
\text { Costs added: }
\end{array} & 40,000 & \
 \text { Direct materials } & & \$ 108,000 \
 \text { Direct labour } & & 48,000 \
 \text { Manufacturing overhead } & &\underline{ 60,600} \
\text { Total costs added during January } & & \underline{\$ 216,600 }\
\text { Work in process, January } 31 \text { ( } 80 \% \text { complete) }&4,000
\end{array}$ Materials are added at the beginning of the process.Round unit costs to two decimal places.
-Refer to the figure.What is the cost per equivalent unit of production for materials using the weighted average method?

Accepted Answer

A)  $2.70
B)  $2.88
C)  $3.12
D)  $3.60

Exam 5: Process Costing