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GNB 12e Practice Exam - Chapter 4

1. The document provides sample questions and solutions for a practice exam on process costing. It includes 4 multiple part questions about companies using weighted-average process costing, calculating equivalent units and costs. 2. The solutions show the calculations to determine units transferred, equivalent units, costs per equivalent unit, and total costs for ending work in process inventory. Equivalent units are used to allocate overhead and calculate costs per unit. 3. Information such as beginning and ending inventory levels, units started and completed, and cost data is provided to solve for unknown amounts.

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Holli Boyd-White
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228 views4 pages

GNB 12e Practice Exam - Chapter 4

1. The document provides sample questions and solutions for a practice exam on process costing. It includes 4 multiple part questions about companies using weighted-average process costing, calculating equivalent units and costs. 2. The solutions show the calculations to determine units transferred, equivalent units, costs per equivalent unit, and total costs for ending work in process inventory. Equivalent units are used to allocate overhead and calculate costs per unit. 3. Information such as beginning and ending inventory levels, units started and completed, and cost data is provided to solve for unknown amounts.

Uploaded by

Holli Boyd-White
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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GNB 12e Practice Exam – Chapter 4

Print these pages. Answer each of the following questions, explaining your answers or showing
your work, as appropriate, and then compare your solutions to those provided at the end of the
practice exam.

1. Golob Company uses the weighted-average method in its process costing system. There is
only one processing department. The following data were taken from the company’s
accounting records. At the beginning of the month, there were no units in the work in process
inventory and 150,000 units in the finished goods inventory. The company sold 500,000 units
during the month. There were 32,000 units, which were 75% complete as to conversion costs,
in the work in process inventory and 120,000 units in the finished goods inventory at the end
of the month.

Part (a) How many units were transferred from the processing department to the finished
goods department during the month?

Part (b) What were the equivalent units of production for conversion costs for the month?

2. Clarke Company uses the weighted-average method in its process costing system. The
following data were taken from the company’s accounting records. The company’s beginning
work in process inventory, which was 100% complete as to materials and 70% complete as to
conversion, was comprised of 120,000 units. 360,000 units were started in process during the
period. The company’s ending work in process inventory, which was 100% complete as to
materials and 60% complete as to conversion, was comprised of 80,000 units.

Part (a) How many units were transferred out during the month?

Part (b) What were the equivalent units of production for conversion costs for the month?
3.  Hood Company uses the weighted-average method in its process costing system. All
materials are added at the beginning of the process. The following information pertains to its
third processing department for the current month:

Number of units Cost of materials


Beginning work in process 120,000 $  40,000
Started during month 320,000 $108,000
Units completed 340,000
Ending work in process 100,000

Part (a) What were the equivalent units of production for materials for the current month?

Part (b) What is the cost per equivalent unit for materials for the current month?

4. The Carroll Company uses the weighted-average method in its process costing system. The
company has only a single processing department. The company's ending work in process
inventory consisted of 36,000 units. The units in the ending work in process inventory were
100% complete with respect to materials and 60% complete with respect to labor and
overhead. If the cost per equivalent unit for November was $11.00 for materials and $17.00
for labor and overhead, what was the total cost assigned to the ending work in process
inventory?         
GNB 12e Practice Exam Solutions – Chapter 4
1. Part (a) Solution (Learning Objective 2):
The number of units transferred out during the month would be determined as follows.
Account for all units in the finished goods department in order to compute the number of
units that were transferred from the processing department to finished goods during the
month.

Beginning finished 150,000 (given) Sold (transferred out 500,000 (given)


goods inventory of finished goods
inventory)
Started (transferred in 470,000 (C) Ending inventory 120,000 (given)
from processing
dept.)
Total units to be Total units
accounted for 620,000 (B) accounted for 620,000 (A)
Calculations:
(A) Units sold + Units in ending inventory = Total units accounted for
500,000 + 120,000 = 620,000 (A)
(B) Total units to be accounted for = Total units accounted for
620,000 = 620,000 (from A)
(C) Units in beginning inventory + Units transferred in = Units to be accounted for
150,000 + Units transferred in = 620,000
Units transferred in from processing department = 470,000 (C)

Part (b) Solution (Learning Objective 2):


The equivalent units of production for conversion costs in the processing department would
be determined as follows:

Units completed and transferred out 470,000


Units in ending inventory (32,000 x .75)   24,000
Equivalent units for conversion costs 494,000

2. Part (a) Solution (Learning Objective 2):


The units were transferred out during the month would be determined as follows.
First, account for all units in the processing department in order to determine the units in
ending inventory (which is required in order to compute the equivalent units).

Beginning inventory 120,000 (given) Completed 400,000 (C)


(transferred out)
Started (transferred in) 360,000 (given) Ending inventory 80,000 (given)
Total units to be Total units
accounted for 480,000 (A) accounted for 480,000 (B)
Calculations:
(A) Units in beginning inventory + Units started = Total units to be accounted for
120,000 + 360,000 = 480,000
(B) Units to be accounted for = Total units accounted for
480,000 (from A) = 480,000 (B)
(C) Units completed + Units in ending inventory = Total units accounted for
Units completed + 80,000 =480,000
Units completed (and transferred out) = 400,000 (C)

Part (b) Solution (Learning Objective 2):


The equivalent units of production for conversion costs would be determined as follows.

Units completed and transferred out 400,000


Units in ending inventory (80,000 x .6)   48,000
Equivalent units for conversion costs 448,000

3. Part (a) Solution (Learning Objective 2):


Recall that materials are added at the beginning of the process; as such, the ending inventory
would be 100% complete as to materials. The equivalent units of production for materials for
the current month would be determined as follows.

Units completed 340,000


Units in ending inventory (100,000 x 100%) 100,000
Equivalent units 440,000

Part (b) Solution (Learning Objective 3:


The cost per equivalent unit for materials for the current month would be determined as
follows.

Beginning inventory $ 40,000


Started (materials transferred in) 108,000
Total costs 148,000
Divided by equivalent units 440,000
Cost per equivalent unit (rounded) $    0.34

4 Solution (Learning Objective 4:


The total cost assigned to the ending work in process would be determined as follows:

Materials (36,000 units x 100% x $11.00 per unit) $396,000


Labor and overhead (36,000 units x 60% x $17.00 per unit)   367,200
Total cost of ending work in process $763,200

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