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1. Clater uses weighted-average process costing and had beginning work in process inventory that was 60% complete, completed 10,000 units during the period, and had ending work in process inventory that was 40% complete. 2. Nikel uses FIFO process costing and had beginning work in process inventory that was 40% complete, completed 100,000 units during the period, and had ending work in process inventory that was 70% complete. 3. Scottso uses weighted-average process costing and had beginning work in process inventory that was 40% complete, started 52,000 units and completed 50,000 units during the period, and had ending work in process inventory that was 70%

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823 views3 pages

True False

1. Clater uses weighted-average process costing and had beginning work in process inventory that was 60% complete, completed 10,000 units during the period, and had ending work in process inventory that was 40% complete. 2. Nikel uses FIFO process costing and had beginning work in process inventory that was 40% complete, completed 100,000 units during the period, and had ending work in process inventory that was 70% complete. 3. Scottso uses weighted-average process costing and had beginning work in process inventory that was 40% complete, started 52,000 units and completed 50,000 units during the period, and had ending work in process inventory that was 70%

Uploaded by

Carlo Paras
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© © All Rights Reserved
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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True-False

T 1. To calculate weighted-average equivalent production you do not need to know the number of units in the beginning inventory.

F 2. Equivalent production calculated using FIFO is higher than equivalent production calculated using weighted average.

T 3. Departmental overhead rates can be used by both job-order and process costing firms.

F 4. A multiproduct company cannot use standard costing.

T 5. Cost of Goods Sold and inventory accounts have debit balances.

F 6. Variance accounts have only credit balances.

F 7. Backflush costing eliminates the need for journal entries.

F 8. Backflush costing uses two inventory accounts: raw materials and a combined work in process/finished goods.

T 9. If a company has no inventories, the weighted-average approach and the FIFO approach will result in the same income.

F. 10. Although weighted average and FIFO may give different values for inventory, the resulting income will always be the same.

Problems

1. Clater uses weighted-average process costing. It had the following results in July.

Beginning inventory, 60% complete 2,000 units


Units completed 10,000 units
Units in ending inventory, 40% complete 1,000 units
Cost of beginning inventory $21,000
Current period production costs $166,200

a. Compute the equivalent unit production for July.

b. Compute the unit cost for July.

c. Compute the ending inventory of work in process.

d. Compute the cost transferred to finished goods.

SOLUTION:

a. 10,400 [10,000 + (1,000 x 40%)]

b. $18 [($21,000 + $166,200)/10,400]

c. $7,200 (1,000 x 40% x $18)

d. $180,000 (10,000 x $18)

2. Nikel Company uses FIFO process costing. Data are as follows:

Beginning inventory 40% complete 5,000 units


Units completed during period 100,000 units
Ending inventory 70% complete 9,000 units

The cost of the beginning inventory was $2,900 and current period production costs were $166,880.

a. Compute equivalent production.

b. Compute the unit cost.

c. Compute the cost of the ending inventory of work in process.

d. Compute the cost of goods completed and transferred to finished goods inventory.

SOLUTION:

a. 104,300 [100,000 + (9,000 x 70%) - (5,000 x 40%)]


b. $1.60 ($166,880/104,300)

c. $10,080, (9,000 x 70% x $1.60)

d. $159,700

Beginning inventory $ 2,900


Finish beginning inventory (5,000 x 60% x $1.60) 4,800
Units started and completed during period (95,000 x $1.60) 152,000
-------
Total $159,700
========
3. The following data are available for 20X4 for Scottso, which uses weighted-average process costing.

Beginning inventory (40% complete) 3,000 units


Units started during 20X4 52,000 units
Units completed during 20X4 50,000 units
Ending inventory (70% complete) 5,000 units
Costs of inventory at beginning of 20X4 $2,750
Production costs incurred during 20X4 $83,920

a. Compute equivalent production for 20X4.


b. Compute the unit cost for 20X4 to the nearest cent.

c. Compute the cost of the ending inventory of work in process.

d. Compute the cost of goods completed and transferred to finished goods.

e. Scottso now uses FIFO. Compute ending inventory of work in process.

SOLUTION
a. 53,500 [50,000 + (5,000 x 70%)]

b. $1.62 [($2,750 + $83,920)/53,500]

c. $5,670 [(5,000 x 70%) x $1.62]

d. $81,000 (50,000 x $1.62)

e. $5,616 ($1.6046 x 5,000 x 70%)

$83,920
-------------------------------------- = $1.6046
50,000 + (5,000 x 70%) - (3,000 x 40%)

4. Debra's Pottery Studios uses weighted-average process costing. It had the following results in June.

Beginning inventory, 30% complete 12,000 units


Units completed 30,000 units
Units in ending inventory, 60% complete 9,000 units
Cost of beginning inventory $45,000
Current period production costs $379,800

a. Compute equivalent unit production for June.

b. Compute the unit cost for June.

c. Compute the ending inventory of work in process.

d. Compute the cost transferred to finished goods.

SOLUTION:

a. 35,400 [30,000 + (9,000 x 60%)]

b. $12 [($45,000 + $379,800)/35,400]

c. $64,800 (9,000 x 60% x $12)


d. $360,000 (30,000 x $12)

5. Dubois Corp. has a just-in-time manufacturing system and maintains no ending materials or work in process inventory balances. Dubois
uses backflush costing and had the following data for March.

Beginning inventories none


Units finished 90,000
Units sold 88,000
Materials purchased and used $375,000

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