Completed and transferred out 90,000 Work in process, May 31 40% 30,000 If materials are added at the beginning of the production process, what is the total number of equivalent units fo
Trang 1CHAPTER 3 PROCESS COSTING
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
sg This question also appears in the Study Guide
st This question also appears in a self-test at the student companion website
a This topic is dealt with in an Appendix to the chapter
Trang 2SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Trang 3Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of eight Matching questions and four Short-Answer Essayquestions
CHAPTER STUDY OBJECTIVES
1 Understand who uses process cost systems Companies that mass-produce similar
products in a continuous fashion use process cost systems Once production begins, itcontinues until the finished product emerges Each unit of finished product isindistinguishable from every other unit
2 Explain the similarities and differences between job order cost and process cost
systems Job order cost systems are similar to process cost systems in three ways: (1)
Both systems track the same cost elements—direct materials, direct labor, andmanufacturing overhead (2) Both accumulate costs in the same accounts—Raw MaterialsInventory, Factory Labor, and Manufacturing Overhead (3) Both assign accumulated costs
to the same accounts—Work in Process, Finished Goods Inventory, and Cost of GoodsSold However, the method of assigning costs differs significantly
There are four main differences between the two cost systems: (1) A process cost systemuses separate accounts for each department or manufacturing process, rather than onlyone work in process account used in a job order cost system (2) A process cost systemsummarizes costs in a production cost report for each department A job cost systemcharges costs to individual jobs and summarizes them in a job cost sheet (3) Costs aretotaled at the end of a time period in a process cost system, but at the completion of a job in
a job cost system (4) A process cost system calculates unit cost as: Total manufacturingcosts for the period ÷ Units produced during the period A job cost system calculates unitcost as: Total cost per job ÷ Units produced
3 Explain the flow of costs in a process cost system A process cost system assigns
manufacturing costs for raw materials, labor, and overhead to work in process accounts forvarious departments or manufacturing processes It transfers the costs of partiallycompleted units from one department to another as those units move through themanufacturing process The system transfers the costs of completed work to FinishedGoods Inventory Finally, when inventory is sold, the system transfers the costs to Cost ofGoods Sold
Trang 44 Make the journal entries to assign manufacturing costs in a process cost system.
Entries to assign the costs of raw materials, labor, and overhead consist of a credit to RawMaterials Inventory, Factory Labor, and Manufacturing Overhead, and a debit to Work inProcess for each department Entries to record the cost of goods transferred to anotherdepartment are a credit to Work in Process for the department whose work is finished and adebit to the department to which the goods are transferred The entry to record unitscompleted and transferred to the warehouse is a credit for the department whose work isfinished and a debit to Finished Goods Inventory The entry to record the sale of goods is acredit to Finished Goods Inventory and a debit to Cost of Goods Sold
5 Compute equivalent units Equivalent units of production measure work done during a
period, expressed in fully completed units Companies use this measure to determine thecost per unit of completed product Equivalent units are the sum of the units completed andtransferred out plus equivalent units of ending work in process
6 Explain the four steps necessary to prepare a production cost report The four steps to
complete a production cost report are: (1) Compute the physical unit flow—that is, the totalunits to be accounted for (2) Compute the equivalent units of production (3) Compute theunit production costs, expressed in terms of equivalent units of production (4) Prepare acost reconciliation schedule, which shows that the total costs accounted for equal the totalcosts to be accounted for
7 Prepare a production cost report The production cost report contains both quantity and
cost data for a production department There are four sections in the report: (1) number ofphysical units, (2) equivalent units determination, (3) unit costs, and (4) cost reconciliationschedule
a8 Compute equivalent units using the FIFO method Equivalent units under the FIFO
method are the sum of the work performed to: (1) Finish the units of beginning work inprocess inventory, if any (2) Complete the units started into production during the period (3)Start, but only partially complete, the units in ending work in process inventory
Trang 53 A company that produces motion pictures would likely use a process cost system.
4 In a process cost system, costs are tracked through a series of connected manufacturingprocesses or departments, rather than by individual jobs
5 In a process cost system, total costs are determined at the end of a month or year
6 Separate work in process accounts are maintained for each production department ormanufacturing process in a process cost system
7 In a process cost system, materials, labor and overhead are only added in the firstproduction department
8 The assignment of the three manufacturing cost elements to Work in Process in a processcost system is the same as in a job order cost system
9 Fewer materials requisitions are generally required in a process cost system than in a joborder cost system
10 In a process cost system, all labor costs incurred within a producing department are a cost
of processing the raw materials
11 A primary driver of overhead costs in continuous manufacturing operations is machinetime used
12 Equivalent units of production are used to determine the cost per unit of completedproducts
13 Equivalent units of production measure the work done during a period, expressed in fullycompleted units
14 Equivalent units of production is the sum of units completed and transferred out plusequivalent units of beginning work in process
15 The weighted-average method of computing equivalent units is the most widely usedmethod in practice
16 There are no units in process at the beginning of the period, 1,000 units in process at theend of the period that are 40% complete, and 10,000 units transferred out during theperiod Based on this information, there were 9,600 equivalent units of production duringthe period
17 The first step performed in preparing a production cost report is computing the equivalentunits of production
Trang 618 Equivalent units of production must be calculated before the unit production costs can becomputed.
19 The physical units in a department are another name for the equivalent units ofproduction
20 Unit material cost is computed by taking total material costs charged to the department forthe period and dividing by the physical units in the process during the period
21 When equivalent units of production are different for materials and conversion costs, unitcosts are computed for materials, conversion, and total manufacturing
22 The total manufacturing cost per unit is used in costing the units completed andtransferred during the period
23 A production cost report is an internal document for management that shows productionquantity and cost data for a particular job
24 Production cost reports provide a basis for evaluating the productivity of a department
25 Companies often use a combination of a process cost and a job order cost system, calledoperations costing
a26 The FIFO method is easier to understand and use than the weighted-average method
a27 The FIFO method is conceptually superior to the weighted-average method
a28 When comparing the FIFO with the weighted-average method, the FIFO method providescurrent cost information
a29 There are no units in ending work in process at the end of the period under the FIFOmethod
a30 Companies using the weighted-average method do not complete units left over from the
previous accounting periods They start new units
Additional True-False Questions
31 In continuous process manufacturing, generally once the production begins, it continuesuntil the finished product emerges
32 One similarity of process cost accounting with job order cost accounting is that bothdetermine total manufacturing costs after each job
33 The flow of costs in a process costing system requires that materials be added in onedepartment, labor added in another department and manufacturing overhead in a thirddepartment
34 When finished goods are sold, the entry to record the cost of goods sold is a debit toFinished Goods Inventory and a credit to Cost of Goods Sold
Trang 735 When there is no beginning work in process and materials are entered at the beginning ofthe process, equivalent units of materials are the same as the units started intoproduction.
36 In order to compute the physical unit flow, a company must first compute unit productioncosts
a37 Under the FIFO method, it is assumed that the beginning work in process is completed
before new work is started
Answers to True-False Statements
Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans.
MULTIPLE CHOICE QUESTIONS
38 A process cost accounting system is most appropriate when
a a variety of different products are produced, each one requiring different types ofmaterials, labor, and overhead
b the focus of attention is on a particular job or order
c similar products are mass-produced
d individual products are custom made to the specification of customers
39 A characteristic of products that are mass-produced in a continuous fashion is that
a the products are identical or very similar in nature
b they are grouped in batches
c they are produced at the time an order is received
d their costs are accumulated on job cost sheets
40 A process cost system would be used for all of the following products except
a chemicals
b computer chips
c motion pictures
d soft drinks
41 In a process cost system,
a a Work in Process account is maintained for each product
b a materials requisition must identify the job on which the materials will be used
c a Work in Process account is maintained for each process
d one Work in Process account is maintained for all the processes, similar to a job ordercost system
Trang 842 Differences between a job order cost system and a process cost system include all of the
following except the
a documents used to track costs
b point at which costs are totaled
c unit cost computations
d flow of costs
43 Which of these best reflects a distinguishing factor between a job order cost system and aprocess cost system?
a The detail at which costs are calculated
b The time period each covers
c The number of work in process accounts
d The manufacturing cost elements included
44 Which of the following is a true statement about process cost systems?
a In process cost systems, costs are accumulated but not assigned
b A process cost system has one work in process account for each process
c In process cost systems, costs are summarized on job cost sheets
d Unit costs are not computed in process cost systems
45 Which of the following is correct regarding cost systems?
Job Order Process
a Work in process account several one for each process
b Work in process account one one
c Work in process account one one for each process
d Work in process account several one
46 In a process cost system, unit costs are determined using a
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
47 In process cost accounting, manufacturing costs are summarized on a
a job order cost sheet
b process order cost sheet
c production cost report
d manufacturing cost sheet
48 Which of the following manufacturing cost elements occurs in a process cost system?
a Direct materials
b Direct labor
c Manufacturing overhead
d All of these
49 In a process cost system, product costs are summarized
a on job cost sheets
b on production cost reports
c after each unit is produced
d when the products are sold
Trang 950 When manufacturing overhead costs are assigned to production in a process cost system,they are debited to
a the Finished Goods Inventory account
b Cost of Goods Sold
c a Manufacturing Overhead account
d the Work in Process account
51 A product requires processing in two departments, Department A and then Department B,before it is completed Costs transferred out of Department A will be transferred to
a Finished Goods Inventory
b Cost of Goods Sold
c Work in Process—Department B
d Manufacturing Overhead
52 Which of the following would not appear as a debit in the Work in Process account of a
second department in a two stage production process?
a Materials used
b Overhead applied
c Labor assigned
d Cost of products transferred out
53 Materials requisitions are
a not used in process costing
b generally used more frequently in process costing than job order costing
c generally used less frequently in process costing than job order costing
d used more frequently by latter stage production departments
54 A primary driver of overhead costs in continuous manufacturing operations is
a direct labor dollars
b direct labor hours
c machine hours
d machine maintenance dollars
55 Price Manufacturing assigns overhead based on machine hours Department A logs 1,200machine hours and Department B shows 2,000 machine hours for the period If theoverhead rate is $5 per machine hour, the entry to assign overhead will show a
a debit to Manufacturing Overhead for $16,000
b credit to Work in Process—Department B for $10,000
c debit to Work in Process for $10,000
d credit to Manufacturing Overhead for $16,000
56 Barnes and Miller Manufacturing is trying to determine the equivalent units for conversioncosts with 3,000 units of ending work in process at 80% completion and 14,000 physicalunits There are no beginning units in the department Conversion costs occur evenlythroughout the entire production period What are the equivalent units for conversion costsfor the current period?
a 17,000
b 16,800
c 2,400
d 13,400
Trang 1057 7,000 units in a process that are 70% complete are referred to as
a 7,000 equivalent units of production
b 2,100 equivalent units of production
c 4,900 equivalent units of production
d 2,100 unequivalent units of production
58 A process with no beginning work in process, completed and transferred out 45,000 unitsduring a period and had 30,000 units in the ending work in process inventory that were30% complete The equivalent units of production for the period were
a 45,000 equivalent units
b 75,000 equivalent units
c 54,000 equivalent units
d 22,500 equivalent units
Use the following information for questions 59–60
A department adds raw materials to a process at the beginning of the process and incursconversion costs uniformly throughout the process For the month of January, there were no units
in the beginning work in process inventory; 80,000 units were started into production in January;and there were 20,000 units that were 40% complete in the ending work in process inventory atthe end of January
59 What were the equivalent units of production for materials for the month of January?
61 Equivalent units are calculated by
a multiplying the percentage of work done by the equivalent units of output
b dividing physical units by the percentage of work done
c multiplying the percentage of work done by the physical units
d dividing equivalent units by the percentage of work done
62 Minor Company had the following department data:
Physical UnitsWork in process, July 1 16,000
Completed and transferred out 72,000
Work in process, July 31 24,000
Materials are added at the beginning of the process What is the total number ofequivalent units for materials in July?
a 72,000
b 80,000
c 112,000
d 96,000
Trang 1163 Corsi Company had the following department data:
Physical UnitsWork in process, beginning -0-
Completed and transferred out 70,000
Work in process, ending 7,000
Materials are added at the beginning of the process What is the total number ofequivalent units for materials during the period?
Completed and transferred out 90,000
Work in process, May 31 (40%) 30,000
If materials are added at the beginning of the production process, what is the total number
of equivalent units for materials during May?
a 126,000
b 120,000
c 116,400
d 102,000
65 It is necessary to calculate equivalent units of production in a department because
a a physical count of units is impossible
b some units worked on in the department are not fully complete
c the physical units in the department are always 100% complete
d at times a department may use a job order cost system and then switch to a processcost system
Use the following information for questions 66–68
In the month of June, a department had 10,000 units in beginning work in process that were 70%complete During June, 40,000 units were transferred into production from another department Atthe end of June there were 5,000 units in ending work in process that were 40% complete.Materials are added at the beginning of the process, while conversion costs are incurreduniformly throughout the process
66 How many units were transferred out of the process in June?
Trang 1268 The equivalent units of production for conversion costs for June were
a 12,000 equivalent units
b 15,000 equivalent units
c 11,000 equivalent units
d 14,000 equivalent units
71 Hanker Company had the following department data on physical units:
Work in process, beginning 1,000
Completed and transferred out 4,000
Work in process, ending 800
Materials are added at the beginning of the process What is the total number ofequivalent units for materials during the period?
Completed and transferred out 4,500
Work in process, June 30 (50%) 3,000
If materials are added at the beginning of the production process, what is the total number
of equivalent units for materials during June?
a 3,750
b 7,500
c 8,000
d 6,000
Trang 1373 Gloria Company had no beginning work in process During the period, 5,000 units werecompleted, and there were 500 units of ending work in process How many units werestarted into production?
at the beginning of the process, and conversion costs occur evenly throughout the entireproduction period What is the equivalent units for conversion costs for the current period?
76 Cinder Company had the following department information for the month:
Total materials costs $ 80,000
Equivalent units of materials 10,000
Total conversion costs $120,000
Equivalent units of conversion costs 20,000
How much is the total manufacturing cost per unit?
a $14.00
b $6.67
c $6.00
d $8.00
Use the following information for questions 77–78
Materials costs of $200,000 and conversion costs of $214,200 were charged to a processingdepartment in the month of September Materials are added at the beginning of the process,while conversion costs are incurred uniformly throughout the process There were no units inbeginning work in process, 100,000 units were started into production in September, and therewere 8,000 units in ending work in process that were 40% complete at the end of September
77 What was the total amount of manufacturing costs assigned to those units that werecompleted and transferred out of the process in September?
a $184,000
b $391,000
c $414,200
d $425,200
Trang 1478 What was the total amount of manufacturing costs assigned to the 8,000 units in theending work in process?
a $5.00
b $4.93
c $9.88
d $4.82
Trang 1584 Madison Industries has equivalent units of 2,000 for materials and for conversion costs.Total manufacturing costs are $200,000 Total materials costs are $150,000 How much isthe conversion cost per unit?
a 75%
b 25%
c 10%
d 20%
Use the following information for questions 87–88
In the month of April, a department had 500 units in the beginning work in process inventory thatwere 60% complete These units had $20,000 of materials costs and $15,000 of conversioncosts Materials are added at the beginning of the process and conversion costs are addeduniformly throughout the process During April, 10,000 units were completed and transferred tothe finished goods inventory and there were 2,000 units that were 25% complete in the endingwork in process inventory on April 30 During April, manufacturing costs charged to thedepartment were: Materials $460,000; Conversion costs $510,000
87 The cost assigned to the units transferred to finished goods during April was
a units started
b units started less 100
c units started plus 100
d equivalent units
Trang 1690 If there are no units in process at the beginning of the period, then
a the company must be using a job order cost system
b only one computation of equivalent units of production will be necessary
c the units started into production will equal the number of units transferred out
d the units to be accounted for will equal the units transferred out and the units inprocess at the end of the period
91 Which of the following is not a necessary step in preparing a production cost report?
a Compute the equivalent units of production
b Compute the physical unit flow
c Prepare the job order cost sheet
d Prepare a cost reconciliation schedule
92 Honrad Company's Assembly Department has materials cost at $4 per unit andconversion cost at $8 per unit There are 9,000 units in ending work in process, all ofwhich are 70% complete as to conversion costs How much are total costs to be assigned
93 In a process cost system, units to be accounted for in a department are equal to the
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
94 The total units accounted for equals units in
a beginning work in process – units transferred out
b beginning work in process + ending work in process
c ending work in process + units transferred out
d ending work in process – units started into production
Use the following information for questions 95–96
Department 1 of a two department production process shows:
Units Beginning Work in Process 10,000
Ending Work in Process 50,000
Total units to be accounted for 120,000
95 How many units were started into production in Department 1?
Trang 1797 The Assembly Department shows the following information:
Units Beginning Work in Process 20,000
Ending Work in Process 50,000
Units Transferred Out 90,000
How many total units are to be accounted for by the Assembly Department?
Started into Production 105,000
Ending Work in Process 30,000
How many units have been transferred out to finished goods during the period?
a 8,000
b 10,000
c 9,000
d 7,000
100 If 75,000 units are started into production and 30,000 units are in process at the end of
the period, how many units were completed and transferred out?
a 75,000
b 30,000
c 45,000
d 105,000
101 Total units to be accounted for less units in beginning work in process equals
a total units accounted for
b units transferred out
c units started into production
d equivalent units
102 If 80,000 units are transferred out of a department and there are 16,000 units still in
process at the end of a period, the number of units that were started into productionduring the period is
a 96,000
b 80,000
c 64,000
d 16,000
Trang 18103 A department adds materials at the beginning of the process and incurs conversion costs
uniformly throughout the process For the month of July, there was no beginning work inprocess; 20,000 units were completed and transferred out; and there were 10,000 units inthe ending work in process that were 40% complete During July, $72,000 materials costsand $63,000 conversion costs were charged to the department
The unit production costs for materials and conversion costs for July was
Materials Conversion Costs
a $2.40 $2.10
b $2.40 $2.63
c $3.00 $2.10
d $3.60 $3.15
104 Conversion cost per unit equals $6.00 Total materials costs equal $60,000 Equivalent
units for materials are 20,000 How much is the total manufacturing cost per unit?
a $9.00
b $6.00
c $12.00
d $3.00
105 The following department data are available:
Total materials costs $120,000
Equivalent units of materials 60,000
Total conversion costs $70,000
Equivalent units of conversion costs 30,000
What is the total manufacturing cost per unit?
a $2.00
b $2.33
c $4.33
d $2.11
106 Byers Company had the following department information for the month:
Total materials costs $30,000
Equivalent units of materials 5,000
Total conversion costs $50,000
Equivalent units of conversion costs 10,000
What is the total manufacturing cost per unit?
a $5.34
b $5.00
c $6.00
d $11.00
107 Physical units are 80,000 Total conversion costs are $197,500 There are 2,000 units in
ending inventory which are 50% complete as to conversion costs How much is theconversion cost per unit?
a $2.50
b $2.47
c $2.44
d $2.41
Trang 19108 A department had the following information for the month:
Total materials costs $120,000
Conversion cost per unit $3.00
Total manufacturing cost per unit $5.00
What are the equivalent units of production for materials?
a 60,000
b 40,000
c 24,000
d Cannot be determined
109 Maisley Manufacturing decided to analyze certain costs for June of the current year Units
started into production equaled 28,000 and ending work in process equaled 4,000 With
no beginning work in process inventory, how much is the conversion cost per unit if endingwork in process was 25% complete and total conversion costs equaled $50,000?
a $1.57
b $6.25
c $2.00
d $1.00
Use the following information for questions 110–111
Materials costs of $400,000 and conversion costs of $510,000 were charged to a processingdepartment in the month of September Materials are added at the beginning of the process,while conversion costs are incurred uniformly throughout the process There were no units inbeginning work in process, 20,000 units were started into production in September, and therewere 5,000 units in ending work in process that were 40% complete at the end of September
110 What was the total amount of manufacturing costs assigned to those units that were
completed and transferred out of the process in September?
a $750,000
b $1,000,000
c $803,250
d $682,500
111 What was the total amount of manufacturing costs assigned to the 5,000 units in the
ending work in process?
a $227,500
b $250,000
c $160,000
d $100,000
112 Snead Manufacturing has recently tried to improve its analysis for its manufacturing
process Units started into production equaled 9,000 and ending work in process equaled
600 units Snead had no beginning work in process inventory Conversion costs areapplied equally throughout production, and materials are applied at the beginning of theprocess How much is the materials cost per unit if ending work in process was 25%complete and total materials costs equaled $60,000?
a $6.67
b $7.02
c $25.00
d $6.25
Trang 20113 Madison Industries has equivalent units of 4,000 for materials and for conversion costs.
Total manufacturing costs are $200,000 Total materials costs are $150,000 How much isthe conversion cost per unit?
a $37.50
b $12.50
c $50.00
d $10.00
114 In a process cost system, a production cost report is prepared
a only for the first processing department
b for all departments in the aggregate
c for each processing department
d only for the last processing department
115 A production cost report
a is prepared for each product
b is prepared from a job cost sheet
c will show quantity and cost data for a production department
d will not identify a specific department if more than one department is involved in theproduction process
116 In the production cost report, the total
a physical units accounted for equals the costs accounted for
b physical units accounted for equals the units to be accounted for
c costs charged equals the units to be accounted for
d costs accounted for equals the costs of the units started into production
a117 The Cutting Department’s output during the period consists of 12,000 units completed and
transferred out, and 3,000 units in ending work in process that were 25% complete as tomaterials and conversion costs Beginning inventory was 1,500 units that were 25%complete as to materials and conversion costs Under the FIFO method, what are theequivalent units of production for materials?
a 13,725
b 12,375
c 14,475
d 13,500
a118 The Wrapping Department’s output during the period consists of 10,000 units completed
and transferred out, and 600 units in ending work in process that were 75% complete as
to materials and conversion costs Beginning inventory was 800 units that were 30%complete as to materials and conversion costs Under the FIFO method, what are theequivalent units of production for materials?
a 10,690
b 11,010
c 10,450
d 10,210
Use the following information to answer questions 119–120
Chicotti Company has 3,000 units in beginning work in process, 30% complete as to conversioncosts, 25,000 units transferred out to finished goods, and 1,000 units in ending work in process20% complete as to conversion costs The beginning and ending inventory is fully complete as tomaterials costs
Trang 21a119 How much are equivalent units for conversion costs if the FIFO method is used?
a121 Schiller Company has unit costs of $5 for materials and $15 for conversion costs There
are 4,200 units in ending work in process which are 25% complete as to conversion costs,and fully complete as to materials cost How much is the total cost assignable to theending work in process inventory if the FIFO method is used?
a 36,750
b 84,000
c 21,000
d 15,750
a122 Solis Company uses the FIFO method to compute equivalent units It has 2,000 units in
beginning work in process, 20% complete as to conversion costs and 50% complete as tomaterials costs, 25,000 units started, and 3,000 units in ending work in process, 30%complete as to conversion costs, and 80% complete as to materials cost How much arethe equivalent units for materials under the FIFO method?
Completed and transferred out 26,000
Work in process, May 31 (50%) 12,000
Materials are added at the beginning of the production process Conversion costs areadded equally throughout production What is the total number of equivalent units duringMay for conversion costs if the FIFO method is used?
a 52,400
b 32,000
c 23,360
d 43,760
a124 Hanker Company had the following department data on physical units:
Work in process, beginning 1,000
Completed and transferred out 4,000
Work in process, ending 800
Trang 22Materials are added at the beginning of the process What is the total number ofequivalent units for materials if the FIFO method is used?
a 4,200
b 3,800
c 4,800
d 3,000
Additional Multiple Choice Questions
125 A process cost system would be used by all of the following except a(n)
a chemical company
b advertising company
c oil company
d computer chip company
126 Which of the following is considered a difference between a job order cost and a process
cost system?
a The manufacturing cost elements
b Documents used to track costs
c The accumulation of the costs of materials, labor, and overhead
d The flow of costs
127 The basic similarities between job order cost and process cost systems include all of the
following except the
a manufacturing cost elements
b flow of costs
c point at which costs are totaled
d accumulation of the costs of materials, labor, and overhead
128 Equivalent units of production are a measure of
a units completed and transferred out
b units transferred out
c units in ending work in process
d the work done in a period expressed in fully completed units
129 Total physical units to be accounted for are equal to the units
a started (or transferred) into production
b started (or transferred) into production plus the units in beginning work in process
c started (or transferred) into production less the units in beginning work in process
d completed and transferred out
130 In computing equivalent units, _ is not part of the equivalent units of
production formula
a units transferred out
b beginning work in process
c ending work in process
d None of these is correct
Trang 23131 In Saint-Simon, Inc., the Assembly Department started 12,000 units and completed
14,000 units If beginning work in process was 6,000 units, how many units are in endingwork in process?
a 0
b 2,000
c 4,000
d 8,000
132 The total units to be accounted for is computed by adding
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
133 In the Camria Company, materials are entered at the beginning of the process If there is
no beginning work in process, but there is an ending work in process inventory, thenumber of equivalent units as to materials costs will be
a the same as the units started
b the same as the units completed
c less than the units started
d less than the units completed
134 For the Assembly Department, unit materials cost is $8 and unit conversion cost is $12 If
there are 6,000 units in ending work in process 75% complete as to conversion costs, thecosts to be assigned to the inventory are
a $120,000
b $102,000
c $90,000
d $108,000
135 The total costs accounted for in a production cost report equal the
a cost of units completed and transferred out only
b cost of units started into production
c cost of units completed and transferred out plus the cost of ending work in process
d cost of beginning work in process plus the cost of units completed and transferred out
136 In a production cost report, which one of the following sections is not shown under Costs?
a Unit costs
b Costs to be accounted for
c Costs during the period
d Units accounted for
Trang 24Answers to Multiple Choice Questions
Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans.
Tip Top Painting Company has the following production data for January:
Beginning work in process, 0 units
Units transferred out, 35,000
Units in ending work in process, 4,000, which are 30% 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
Solution 137 (4 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs
Units to be accounted for
Work in process, January 1 0
Started into production 39,000
Trang 25BE 138
Tip Top Painting Company has the following production data for March:
Beginning work in process, 2,000 units
Units transferred out, 42,000
Units in ending work in process, 6,000, 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
Solution 138 (4 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs
Units to be accounted for
Work in process, March 1 2,000
Started into production 46,000
Units to be accounted for
Work in process, December 1 4,000
Started into production 7,000
Trang 26Unit costs $ 5.00 $ 20.00 $25.00
BE 141
Apoly Manufacturing Company has the following production data for January
Ending Work in Process Beginning
Work in Process
Units Started intoProduction Units
% Complete as toConversion Cost
Instructions
Compute the physical units for January
Solution 141 (4 min.)
Beginning work in process
-0-Started into production 6,500
Total units to be accounted for 6,500
Transferred out 5,800
Ending work in process 700
Total units accounted for 6,500
BE 142
Sandusky Widget Company has the following production data for March
Ending Work in Process Month
BeginningWork in Process
UnitsTransferred Out Units
% Complete as toConversion Cost
Trang 27BE 142 (cont.)
Instructions
Compute the physical units for March
Solution 142 (4 min.)
Beginning work in process 1,200
Started into production 4,700
Total units to be accounted for 5,900
Transferred out 5,100
Ending work in process 800
Total units accounted for 5,900
BE 143
Sequal Company has the following production data for June: units transferred out 46,000, andending work in process 4,000 units that are 100% complete for materials and 30% complete forconversion costs Unit materials cost is $5 and unit conversion cost is $11
Total cost of work in process $ 33,200
Units transferred out (46,000 × $16) $736,000
BE 144
Tomlinson Company has the following production data for May:
Beginning work in process, 0 units
Units started, 62,000
Ending work in process, 7,000 units that are 100% complete for materials and 60% completefor conversion costs
Unit materials cost, $7
Unit conversion cost, $10
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work inprocess