Question 1

Partially completed units in ending work in process are 100 percent complete with regard to their direct materials costs if the direct materials are introduced at the beginning of the process.

Accepted Answer

A) True 
 B)False

Question 2

Bright Colors Company placed 315,000 gallons of direct materials into the mixing process.All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process.Bright Colors uses weighted-average costing.The initial forecast for the end of the month was to have 75,000 gallons still in process,15% converted as to labor and factory overhead.
Required:
a.Determine the total equivalent units (in process and transferred out)for direct materials and for conversion costs,assuming there was no beginning inventory.
b.With the installation of a new paint processing filtration device,the forecast for the end of the month was to have 50,000 gallons still in process,70% converted as to labor and factory overhead.In this event,determine the equivalent units (in process and transferred out)for direct materials and for conversion costs,assuming there was no beginning inventory.

Accepted Answer

The answer of Bright Colors Company placed 315,000 gallons of...

Question 3

The weighted average method of process costing assigns the cost of equivalent units worked on during the current period first to complete beginning inventory,next to start and complete new units,and finally to units in ending work-in-process inventory.

Accepted Answer

A) True 
 B)False

Question 4

List and describe the five steps in process costing.

Accepted Answer

The answer of List and describe the five steps in...

Question 5

Under standard costing the cost per equivalent-unit calculation is more difficult than in either weighted average or FIFO.

Accepted Answer

A) True 
 B)False

Question 6

Emerging Dock Company manufactures boat docks on an assembly line.Its standard costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department and the Finishing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production. Data for the Assembly Depatment for Maj $ 20 X 5 $ are:
Work in process, beginning inventory:$\quad\quad\quad\quad70 \text { uncits }$
Direct materials ( $ 100 \% $ complete)
Conversion costs ( $ 25 \% $ complete)

$\text { Units started during May } \quad \quad \quad \quad 40 \text { units }$

$\text { Work in process, ending inventory: } \quad 10 \text { units }$
Direct materials (100\% complete)
Conversion costs ( $ 50 \% $ complete)

$\text { Costs for May: }$
$\begin{array}{l}
\text { Standard costs for Assembly: }\
\begin{array}{lr}
\text { Direct materials } & \$ 8,000 \text { per unit } \
\text { Conversion costs } & \$ 32,000 \text { per unit }
\end{array}
\end{array}$

$\begin{array}{l}
\text { Work in process, beginuing inventory: }\
\begin{array}{ll}
\text { Direct materials } & \$ 280,000 \
\text { Conversion costs } & \$ 520,000
\end{array}
\end{array}$

What is the balance in ending work-in-process inventory?

Accepted Answer

A)  $164,000 
B)  $240,000 
C)  $310,000 
D)  $340,000

Question 7

The Esther Valve Corporation was recently formed to produce a brass valve that forms an essential part of a compressor manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.September is Parson's first month of operations,and therefore,there was no beginning inventory.Direct materials cost for the month totaled $2,800,000,while conversion costs equaled $3,600,000.Accounting records indicate that 1,600,000 valves were started in September and 1,400,000 valves were completed.
Ending inventory was 20% complete as to conversion costs.
Required:
a.What is the total manufacturing cost per valve for September?
b.Allocate the total costs between the completed valves and the valves in ending inventory.

Accepted Answer

The answer of The Esther Valve Corporation was recently formed...

Question 8

Answer the following questions using the information below:
Morgan Clay Products manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Molding Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.
 $\begin{array} { l  } \text {Data for the Assembly Department for August 2015 are:  }\
 \text {Work in process, beginuning inventory: }&1,200 \text { units } \
\text {Direct materials ( $ 100 \% $ complete) }\
\text {Conversion costs ( $ 40 \% $ complete) }\\
 \text {Units started during August }&675 \text { units } \\
 \text {Work in process, ending inventory: }&450 \text { units } \
\text {Direct materials ( $ 100 \% $ complete) }\
\text {Conversion costs ( $ 60 \% $ complete) }\\
 \text {Costs for August: } \
 \text {Standard costs for Asæmbly: } \
 \text {Direct materials }& \$ 15 \text { per unit }\
 \text { Conversion costs }&\$ 27.50 \text { per unit } \\
 \text {Work in process, beginning inventory:} \
 \text {Direct materials }&\$11,000 \
 \text { Conversion costs}&\$8,250 \
\end{array}$

-What is the balance in ending work-in-process inventory?

Accepted Answer

A)  $25,500 
B)  $19,250 
C)  $15,600 
D)  $14,175

Question 9

A hybrid-costing system is a variant of process-costing that allows it to incorporate benefits of standard costing and activity-based costing.

Accepted Answer

A) True 
 B)False

Question 10

In a process-costing system,there is always a separate Work-in-Process account for each different process.

Accepted Answer

A) True 
 B)False

Question 11

Under the weighted-average method,the stage of completion of beginning work in process ________.

Accepted Answer

A)  is relevant in determining the equivalent units 
B)  must be combined with the work done during the current period to determine the equivalent units 
C)  is irrelevant in determining the equivalent-unit calculation 
D)  can almost always be determined with a high degree of precision

Question 12

Costing systems that are used for the costing of 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

Question 13

The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services.

Accepted Answer

A) True 
 B)False

Question 14

The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

Accepted Answer

A) True 
 B)False

Question 15

Answer the following questions using the information below:
Emerging Dock Company manufactures boat docks on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.
 Data for the Assembly Depatment for May $ 20 X 5 $ are: 
Work in process, beginuning inventory: $\quad\quad\quad70 \text { units }$
Direct materials (100\% complete) 
Conversion costs ( $ 25 \% $ complete)

$\text { Units started during May }$$\quad\quad\quad40 \text { units }$

Work in process, ending inventory: $\quad\quad\quad40 \text { units }$
Direct materials ( $ 100 \% $ complete) 
Conversion costs ( $ 50 \% $ complete)

Costs for May:
Standard costs for Assembly:
Direct materials$\quad\quad\quad\quad\quad\quad\quad\$ 8,000 \text { per unit }$
Conversion costs$\quad\quad\quad\quad\quad\quad\quad\$ 32,000 \text { per unit }$

Work in process, beginning inventory: $\quad\quad\quad \$280,000$
Direct materials Conversion costs$\quad\quad\quad\quad \$520,000$
-Which of the following journal entries records the Assembly Department's conversion costs at actual costs for the month,assuming conversion costs are 20% higher than expected?

Accepted Answer

A)  $\begin{array} { l  }
 \text {Assembly Department Conversion Cost Control  } &3,360,000\ \text {Various accounts } &3,360,000\
\end{array}$ 
B)  $\begin{array} { l  }
 \text {Materials Inventory } &3,360,000\ \text {Assembly Department Conversion Cost Control } &3,360,000\
\end{array}$ 
C)  $\begin{array} { l  }
 \text {Assembly Department Conversion Cost Control  } &2,800,000\ \text { Materials Inventory} &2,800,000\
\end{array}$ 
D)  $\begin{array} { l  }
 \text {Materials Inventory }& 3,360,000\ \text { Work in Process - Assembly}&3,360,000 \
\end{array}$

Question 16

Answer the following questions using the information below:
Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing.
The following information is available for the month of March 2015 for the Assembly department.
 $\begin{array}{ll}
\text { Work in process, beginning inventory } & 300 \text { units } \
\text { Conversion costs ( } 30 \% \text { complete) } & \
\text { Units started during April } & 800 \text { units } \
\text { Work in process, ending inventory: } & 100 \text { units }\\text { Conversion costs ( } 50 \% \text { complete) }\\\text { The cost details for the month of March are as follows: }\\text { Work in process, beginuing inventory: }\
\text { Direct materials } & \$ 345,000 \
\text { Conversion costs } & \$ 360,000 \
\text { Direct materials costs added during April } & \$ 700,000 \
\text { Conversion costs added during April } & \$ 1,120,000
\end{array}$
-What amount of conversion costs is assigned to the ending Work-in-Process account for April?

Accepted Answer

A)  $140,952 
B)  $95,000 
C)  $70,476 
D)  $247,500

Question 17

Answer the following questions using the information below:
Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses 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 the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing.
 $\begin{array}{ll}\text { Data for the Assembly Depatment for June } 2015 \text { are: }\
\text { Work in process, beginuning inventory }&300 \text { units }\
\text { Direct materials ( } 100 \% \text { complete) }\
\text { Conversion costs ( } 50 \% \text { complete) }\
\text { Units started during June } & 950 \text { units } \
\text { Work in process, ending inventory: } & 150 \text { units } \
\text { Direct materials ( } 100 \% \text { complete) } & \
\text { Conversion costs ( } 75 \% \text { complete) } &\\\text { Costs for June 2015: }\
\text { Work in process, beginuning inventory: }\
\text { Direct materials } & \$ 90,000 \
\text { Conversion costs } & \$ 135,000 \
\text { Direct materials costs added during June } & \$ 600,000 \
\text { Conversion costs ad ded during June } & \$ 400,000
\end{array}$
-What is the direct materials cost per equivalent unit during June?

Accepted Answer

A)  $569 
B)  $560 
C)  $552 
D)  $480

Question 18

In a process-costing system,the calculation of equivalent units is used for calculating ________.

Accepted Answer

A)  the dollar amount of sales affected during the period 
B)  the dollar amount of the cost of goods sold for the accounting period 
C)  the dollar price earned for a particular job 
D)  the dollar amount of revenue for the period including the revenue estimated to be received from the sale of equivalent units

Question 19

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

Accepted Answer

A) True 
 B)False

Question 20

How many units were completed and transferred out of the Finishing Department during March?

Accepted Answer

A)  1,000 units 
B)  1,200 units 
C)  1,700 units 
D)  2,000 units

Exam 17: Process Costing

Partially completed units in ending work in process are 100 percent complete with regard to their direct materials costs if the direct materials are introduced at the beginning of the process.

The weighted average method of process costing assigns the cost of equivalent units worked on during the current period first to complete beginning inventory,next to start and complete new units,and finally to units in ending work-in-process inventory.

List and describe the five steps in process costing.

Under standard costing the cost per equivalent-unit calculation is more difficult than in either weighted average or FIFO.

A hybrid-costing system is a variant of process-costing that allows it to incorporate benefits of standard costing and activity-based costing.

In a process-costing system,there is always a separate Work-in-Process account for each different process.

Under the weighted-average method,the stage of completion of beginning work in process ________.

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

The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services.

The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

In a process-costing system,the calculation of equivalent units is used for calculating ________.

The weighted-average cost is the total of all costs entering the Work-in-Process account (whether they are from beginning work-in-process or from work started during the current period)divided by total equivalent units of work done to date.

How many units were completed and transferred out of the Finishing Department during March?