Process Costing: True / False Questions

Chapter 08
Process Costing

True / False Questions

1. Process costing assumes all units are homogeneous and follow the same path through the production
process.

True False

2. The equivalent unit concept refers to the actual amount of work during the period stated in terms of the
work required to complete an equal number of whole units.

True False

3. The number of units in the beginning Work-in-Process Inventory plus the units transferred out during the
period equals the number of units started during the period plus the number of units in the ending Work-in-
Process Inventory.

True False

4. If materials are added continuously throughout the production process, then the equivalent units for
materials will always equal the equivalent units for the conversion costs.

True False

5. If materials are only added at the beginning of the production process, then the degree of completion for
materials in the ending Work-in-Process Inventory is always 100%.

True False

materials in the ending Work-in-Process Inventory will be the same as the degree of completion for the
conversion costs.

True False

7. If materials are only added at the end of the production process, then the degree of completion for materials
of units in the ending Work-in-Process Inventory is always 0%.

True False

8-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
8. In the weighted-average approach, the number of physical units transferred out cannot be greater than the
equivalent number of units produced during the period.

True False

9. The weighted-average approach to process costing combines the work and costs done in prior periods with
the work and costs done in the current period.

True False

10. In a weighted-average process costing system, the costs in the beginning Work-in-Process Inventory are
not used to compute the costs transferred-out.

True False

11. First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before transferring
out the costs associated with units started and completed.

True False

12. If the beginning Work-in-Process inventory is zero, first-in, first-out (FIFO) and weighted-average process
costing will assign the same amount to the units transferred out.

True False

13. In general, the ending Work-in-Process Inventory value computed using first-in, first-out (FIFO) will be the
same as the ending value computed using weighted-average process costing.

True False

14. It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-in-
Process Inventory.

True False

15. The more prices change, the greater the difference between the costs assigned to units transferred out using
weighted-average costing and the costs assigned to units transferred out using first-in, first-out (FIFO).

True False

16. In general, weighted-average costing is simpler to use while first-in, first-out (FIFO) costing provides
greater decision-making benefits to managers.

True False

17. The degree of completion associated with prior department costs is always 100%.

True False

8-2
18. Job costing requires more detailed recordkeeping than process costing.

True False

19. Operation costing is used in manufacturing goods that have some common characteristics and some
individual characteristics.

True False

20. Operation costing accounts for material costs like job costing and conversion costs like process costing.

True False

Multiple Choice Questions

21. In process 2, material G is added when a batch is 60% complete. Ending work-in-process units, which are
50% complete, would be included in the computation of equivalent units for: (CPA adapted)
Conversion Costs Material G

A. Yes No
B. No Yes
C. No No
D. Yes Yes

A. Option A
B. Option B
C. Option C
D. Option D

8-3
22. The following examples briefly describe the manufacture of two different products. Which costing method
(job-order or process) would be the best method to use for each project?
I. Steven Lawless manufactures Lawless Fine Wine Coolers. Steven once made the statement, "People can
have any flavor of Lawless Fine Wine Coolers they want as long it's strawberry."
II. Northridge Spacetronics is manufacturing three space shuttles for the country of Xanadu. Each shuttle is
slightly different and production will last approximately two years.
I II
A. Process Process
B. Job-Order Job-Order
C. Process Job-Order
D. Job-Order Process

A. Option A
B. Option B
C. Option C
D. Option D

23. Which of the following statements is(are) true regarding product costing?
(A) Twenty cans of paint that are 25% full are equivalent to four cans of paint that are completely full.
(B) The equivalent unit concept refers to the actual amount of work during the period stated in terms of
whole units.

A. Only A is true.
B. Only B is true.
C. Both A and B are true.
D. Neither A nor B is true.

24. A company should use process costing, rather than job order costing, if:

A. production is only partially completed during the accounting period.

B. the product is manufactured in batches only as orders are received.
C. the product is composed of mass-produced homogeneous units.
D. the product goes through several steps of production.

8-4
25. Which of the following characteristics applies to process costing, but does not apply to job order costing?

A. the need for averaging.

B. the use of equivalent units of production.
C. separate, identifiable jobs.
D. the use of predetermined overhead rates.

26. Equivalent units for a process costing system, using the weighted-average method, would be equal to:

A. units completed during the period and transferred out.

B. units started and completed during the period plus equivalent units in the ending work-in-process
inventory.
C. units completed during the period less equivalent units in the beginning inventory, plus equivalent units
in the ending work-in-process inventory.
D. units completed during the period plus equivalent units in the ending work-in-process inventory.

27. The Fremont Company uses the weighted-average method in its process costing system. The company
recorded 29,500 equivalent units for conversion costs for November in a particular department. There were
6,000 units in the ending work-in-process inventory on November 30, 75% complete with respect to
conversion costs. The November 1 work-in-process inventory consisted of 8,000 units, 50% complete with
respect to conversion costs. A total of 25,000 units were completed and transferred out of the department
during the month. The number of units started during November in the department was:

A. 24,500 units.
B. 23,000 units.
C. 27,000 units.
D. 21,000 units.

28. In a process costing system, the application of factory overhead usually would be recorded as an increase
in: (CPA adapted)

A. Finished goods inventory control.

B. Factory overhead control.
C. Cost of goods sold.
D. Work-in-process inventory control.

8-5
29. Sigman Co.'s inventories in process were at the following stages of completion at April 30:
No. of Units Percent Complete

100 90
50 80
200 10
Equivalent units of production in ending inventory amounted to: (CPA adapted)

A. 150.
B. 180.
C. 330.
D. 350.

30. An error was made by Marrow Company in computing the percentage-of-completion of the current year's
ending Work-in-Process Inventory. The error resulted in the assignment of a lower percentage of
completion to each component of the inventory than actually was the case. There was no beginning Work-
in-Process Inventory. What is the effect of this error on (1) cost assigned to cost of goods completed for the
period and (2) the computation of costs per equivalent unit?

A. Understated; Understated
B. Understated; Overstated
C. Overstated; Understated
D. Overstated; Overstated

31. Which of the following organizations would most likely use a process costing system?

A. Gasoline refinery.
B. Automobile retailer.
C. Airplane manufacturer.
D. Public accounting firm.

32. An equivalent unit of conversion costs is equal to the amount of conversion costs required to:

A. start a unit.
B. start and complete a unit.
C. transfer a unit in.
D. transfer a unit out.

8-6
33. Of the following process costing steps, which must be done last?

A. Compute the equivalent units of production.

B. Compute the costs per equivalent unit of production.
C. Measure the physical flow of resources.
D. Identify the product costs to account for.

34. The Phantom Corporation started and completed 4,800 units during February. Phantom started the month
with 700 units in process (40% complete) and ended the month with 400 units in process (40% complete).
How many units were transferred to the Finished Goods Inventory during February?

A. 5,500.
B. 5,380.
C. 5,100.
D. 4,400.

35. If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-
Process Inventory, then the units transferred out are:

A. more than the units started during the period.

B. equal to the equivalent units of production.
C. less than the units started during the period.
D. equal to the actual work done during the period.

36. Phantom Company has beginning and ending Work-in-Process Inventories that are 45% and 10%
complete, respectively. Materials are added at the beginning of the process. If first-in, first-out (FIFO)
process costing is used, the total equivalent units for materials will equal the number of units:

A. transferred out during the period.

B. started and completed during the period.
C. started into the process during the period.
D. started into the process plus the units in the ending inventory.

37. Which of the following statements concerning a process cost accounting system is false?

A. The units in beginning inventory plus the units transferred out during the month should equal the units in
the ending inventory plus the units transferred in during the month.
B. If material is used evenly throughout a process, the number of equivalent material units will equal the
number of equivalent units for the conversion (processing) costs.
C. Actual costing may be used in a process costing system to assign indirect overhead costs to departments.
D. The units in beginning inventory plus the units transferred in during the month should equal the units in
the ending inventory plus the units transferred out during the month.

8-7
38. The weighted-average method of process costing differs from the FIFO method of process costing in that
the weighted-average method:

A. can be used under any cost flow assumption.

B. does not require the use of predetermined overhead rates.
C. keeps costs in the beginning inventory separate from current period costs.
D. does not consider the degree of completion of units in the beginning work-in-process inventory when
computing equivalent units of production.

39. The Miracle Company had 20,000 units in process on December 31, 2016 which was 80% complete as to
materials but only 40% complete as to conversion costs. The company's records show 40,000 units were
transferred to the Finished Goods Inventory during January 2017. On January 31, 2017, 15,000 units were
on hand which were 30% complete as to conversion costs and 60% complete as to materials. What are the
equivalent units of production for the conversion costs in January, assuming Miracle uses first-in, first-out
(FIFO)?

A. 34,000.
B. 35,000.
C. 36,500.
D. 41,500.

40. The Townson Manufacturing Company has gathered the following information for the month of
September:
• 6,000 units in the beginning Work-in-Process Inventory (75% complete as to materials, 1/3 complete
with respect to the conversion costs).
• 60,000 units were started into production.
• 50,000 units were completed and transferred to the next department.
• The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect to
conversion costs.
What are the equivalent units of production (EUP) for materials in the month of September assuming
Townson uses weighted-average process costing?

A. 52,000
B. 64,500
C. 66,000
D. 61,500

8-8
September:
with respect to the conversion costs)
• 60,000 units were started into production
• 50,000 units were completed and transferred to the next department
• The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect to
conversion costs.
What are the equivalent units of production (EUP) for the conversion costs in the month of September
assuming Townson uses weighted-average process costing?

A. 64,500
B. 56,000
C. 61,500
D. 54,000

42. Haberdashery Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete).
During the period, 110,000 units were started and the ending Work-in-Process Inventory consisted of
20,000 units (80%). What are the equivalent units for conversion costs using weighted-average process
costing?

A. 110,000.
B. 115,000.
C. 121,000.
D. 131,000.

43. Seaside Company uses the weighted-average method in its process costing system. The Sanding
Department started the month with 8,000 units in its beginning work-in-process inventory that were 70%
complete with respect to conversion costs. An additional 69,000 units were transferred in from the prior
department during the month to begin processing in the Sanding Department. There were 5,000 units in the
ending work-in-process inventory of the Sanding Department that were 20% complete with respect to
conversion costs.
What were the equivalent units for conversion costs in the Sanding Department for the month?

A. 67,400.
B. 73,000.
C. 72,000.
D. 66,000.

8-9
44. The Marshall Company has a process cost system. All materials are added when the process is first begun.
At the beginning of September, there were no units of product in process. During September 50,000 units
were started; 5,000 of these were still in process at the end of September and were 3/5 finished. The
equivalent units of material in September were:

A. 40,000.
B. 45,000.
C. 48,000.
D. 50,000.

45. The Chart Company has a process cost system. All materials are added when the process is first begun. At
the beginning of September, there were no units of product in process. During September 50,000 units were
started; 5,000 of these were still in process at the end of September and were 3/5 finished. The equivalent
units for the conversion costs in September were:

A. 40,000.
B. 45,000.
C. 48,000.
D. 50,000.

46. Department B had a beginning inventory of 400 units, 1/4 completed; an ending inventory of 300 units, 2/3
completed, and received 900 units during the period from Department A. What was the equivalent unit
production of Department B, assuming weighted-average process costing?

A. 800 units.
B. 900 units.
C. 1,100 units.
D. 1,200 units.

8-10
47. Madison Corporation's production cycle starts in the Processing Department. The following information is
available for April:
Units
Work-in-process, April 1 (25% complete) 40,000
Total units in process during April 280,000
Materials are added at the beginning of the process in the Processing Department. What are the equivalent
units of production for the month of April, assuming Madison uses the weighted-average method?
Materials Conversion Costs

A. 240,000 260,000
B. 255,000 235,000
C. 280,000 270,000
D. 315,000 285,000

A. Option A
B. Option B
C. Option C
D. Option D

48. Department A had no Work-in-Process at the beginning of the period, 1,000 units were completed during
the period, 200 units were 50% completed at the end of the period, and the following manufacturing costs
were debited to the departmental Work-in-Process account during the period:
Direct materials (1,200 at $10) $12,000

Direct labor 5,500
Factory overhead 4,400
Assuming that all direct materials are added at the beginning of production and Department A uses
weighted-average process costing, what is the total cost of the departmental Work-in-Process Inventory at
the end of the period?

A. $3,650.
B. $2,900.
C. $2,000.
D. $1,825.

8-11
49. DriveTrain, Inc. instituted a new process in October 2016. During October, 10,000 units were started in
Department A. Of the units started, 8,000 were transferred to Department B, and 2,000 remained in Work-
in-Process at October 31, 2016. The Work-in-Process at October 31, 2016, was 100% complete as to
material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion costs of
$36,000 were charged to Department A in October. What were the total costs transferred to Department B
assuming Department A uses weighted-average process costing?

A. $46,900.
B. $53,600.
C. $56,000.
D. $57,120.

50. In a process costing system, manufacturing overhead applied is usually recorded as a debit to:

A. Finished goods.
B. Work-in-process.
C. Manufacturing overhead.
D. Cost of goods sold.

51. The Lakeside Company uses a weighted-average process costing system. The following data are available:
Beginning inventory -0-

Units started in production 20,000
Units finished during the period 16,000
Units in process at the end of the period
(complete as to materials, ¼ complete as to
4,000
labor and overhead)
Cost of materials used $35,200
Labor and overhead costs $37,400
Equivalent units of production for material are:

A. 16,000.
B. 17,000.
C. 19,000.
D. 20,000.

8-12

4,000
labor and overhead)
Equivalent units of production for labor and overhead are:

A. 16,000.
B. 17,000.
C. 19,000.
D. 20,000.


4,000
labor and overhead)
Unit cost of material is:

A. $2.20.
B. $2.07.
C. $1.85.
D. $1.76.

8-13

4,000
labor and overhead)
Unit cost of labor and overhead is:

A. $2.34.
B. $2.20.
C. $1.97.
D. $1.87.


4,000
labor and overhead)
Total cost of the 16,000 units finished is:

A. $63,360.
B. $67,320.
C. $72,640.
D. $65,120.

8-14

4,000
labor and overhead)
Total cost of the 4,000 units of the ending inventory:

A. $15,840.
B. $14,520.
C. $9,240.
D. $8,910.

57. The following information pertains to Oklahoma Co.'s Tulsa Division for the month of April:
Units Materials
Beginning Work-in-Process 15,000 $5,500
Started in April 40,000 $18,000
Units completed 42,500
Ending Work-in-Process 12,500
All materials are added at the beginning of the process. Using the weighted-average method, the cost per
equivalent unit of materials is: (CPA adapted)

A. $0.59.
B. $0.55.
C. $0.45.
D. $0.43.

8-15
58. Nebraska Company uses the weighted-average method in its process costing system. The first processing
department, the Welding Department, started the month with 18,000 units in its beginning work-in-process
inventory that were 30% complete with respect to conversion costs. The conversion cost in this beginning
work-in-process inventory was $44,820. An additional 90,000 units were started into production during the
month. There were 21,000 units in the ending work-in-process inventory of the Welding Department that
were 10% complete with respect to conversion costs. A total of $677,970 in conversion costs were incurred
in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round to three decimal
places.)

A. $8.112.
B. $8.300.
C. $7.533.
D. $6.108.

59. Kansas Company uses the weighted-average method in its process costing system. Operating data for the
first processing department for the month of June appear below:
Percent Complete with

Units Respect to Conversion
Beginning work-in-
11,000 50%
process inventory
Started into
production during 98,000
June
Ending work-in-
21,000 80%
process inventory
According to the company's records, the conversion cost in beginning work-in-process inventory was
$46,915 at the beginning of June. Additional conversion costs of $825,183 were incurred in the department
during the month.
What was the cost per equivalent unit for conversion costs for the month? (Round to three decimal places.)
A. $8.420.
B. $6.934.
C. $8.530.
D. $8.322.

8-16
60. Fanciful Structures Company uses the weighted-average method in its process costing system. The first
processing department, the Welding Department, started the month with 22,000 units in its beginning work-
in-process inventory that were 20% complete with respect to conversion costs. The conversion cost in this
beginning work-in-process inventory was $23,320. An additional 97,000 units were started into production
during the month and 101,000 units were completed in the Welding Department and transferred to the next
processing department. There were 18,000 units in the ending work-in-process inventory of the Welding
Department that were 40% complete with respect to conversion costs. A total of $529,380 in conversion
costs were incurred in the department during the month.
places.)

A. $5.300.
B. $5.458.
C. $4.603.
D. $5.108.

61. Holcomb Company uses the weighted-average method in its process costing system. The Shaping
Department is the second department in its production process. The data below summarize the department's
operations in January.
Percent Complete
with Respect to
Units
Conversion
Beginning work-in-process
3,800 90%
inventory
Transferred in from the
prior department during 53,000
January
Completed and transferred
to the next department 51,300
during January
Ending work-in-process
5,500 30%
inventory
The accounting records indicate that the conversion cost that had been assigned to beginning work-in-
process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department
during January.
What was the cost per equivalent unit for conversion costs for January in the Shaping Department? (Round
to three decimal places.)

A. $1.654.
B. $1.752.
C. $1.490.
D. $1.499.

8-17
62. In the computation of the manufacturing cost per equivalent unit, the weighted-average method of process
costing considers:

A. current costs only.

B. current costs plus cost of beginning Work-in-Process Inventory.
C. current costs plus cost of ending Work-in-Process Inventory.
D. current costs less cost of beginning Work-in-Process Inventory.

63. Morgenstern Company had Work-in-Process Inventories that were 45% complete at the start of the month.
Work-in-Process at the end of the month was 10% complete. Materials were added at the beginning of the
process. If weighted-average process costing is used, the total equivalent units for materials will equal the
number of units:


D. transferred out during the process plus the units in the ending inventory.

64. Materials are added at the beginning of a process in a process costing system. The beginning Work-in-
Process Inventory was 30% complete as to conversion costs. Using first-in, first-out (FIFO) process
costing, the total equivalent units for material are:

A. beginning inventory this period for this process.

B. units started this period in this process.
C. units started this period in this process plus the beginning inventory.
D. units started this period in this process plus 70% of the beginning inventory this period.

65. Parkway Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the
Work-in-Process Inventory on July 1 had materials assigned to them of $32,000, even though they were
only 5% complete as to materials. No additional units were started during July, and there were no
unfinished units on hand on July 31. What is the material cost per unit for July, assuming Parkway uses
weighted-average process costing?

A. $10.50.
B. $11.59.
C. $13.17.
D. $15.49.

8-18
66. Cranford Company completed and transferred out 2,300 units in May 2016. There were 200 units in the
Work-in-Process Inventory on May 31, 2016, 30% complete as to conversion costs and 100% complete as
to materials. The month's charges for conversion costs and material costs were $9,440 and $6,250,
respectively. There was no beginning inventory on May 1, 2016. What is the cost of the work transferred-
out during May?

A. $8,510.
B. $14,950.
C. $15,690.
D. $16,250.

67. A form prepared periodically for each processing department summarizing (1) the units for which the
department is accountable and the disposition of these units and (2) the costs charged to the department and
the allocation of these costs is called a:

A. schedule of Cost of Goods Manufactured.

B. production cost report.
C. job order cost sheet.
D. schedule of Cost of Goods Sold.

68. The FIFO method provides a major advantage over the weighted-average method in that:

A. the calculation of equivalent units is less complex under the FIFO method.
B. the FIFO method treats units in the beginning inventory as if they were started and completed during the
current period.
C. the FIFO method provides measurements of work done during the current period.
D. the weighted-average method ignores units in the beginning and ending work-in-process inventories.

69. The computation of equivalent units under the FIFO method:

A. treats units in the beginning work-in-process inventory as if they were started and completed during the
current period.
B. treats units in the beginning work-in-process inventory as if they represent a batch of goods separate and
distinct from goods started and completed during the current period.
C. treats units in the ending work-in-process inventory as if they were started and completed during the
current period.
D. ignores units in the beginning and ending work-in-process inventories.

8-19
70. Tori Company uses the FIFO method in its process costing system. The first processing department, the
Soldering Department, started the month with 17,000 units in its beginning work-in-process inventory that
were 70% complete with respect to conversion costs. The conversion cost in this beginning work-in-
process inventory was $101,150. An additional 68,000 units were started into production during the month.
There were 23,000 units in the ending work-in-process inventory of the Soldering Department that were
80% complete with respect to conversion costs. A total of $565,125 in conversion costs were incurred in
the department during the month.
What would be the cost per equivalent unit for conversion costs? (Round off to three decimal places.)

A. $8.500.
B. $8.311.
C. $8.250.
D. $7.839.

71. Sarfina Corporation uses the FIFO method in its process costing system. Operating data for the Casting
Department for the month of September appear below:
Percent Complete with Respect

Units to Conversion
Beginning work-in-process inventory 15,000 20%
Transferred in from the prior department during
89,000
September
Ending work-in-process inventory 24,000 90%
$15,660 at the beginning of September. Additional conversion costs of $526,524 were incurred in the
department during the month.
What would be the cost per equivalent unit for conversion costs for September? (Round off to three
decimal places.)

A. $5.916.
B. $5.340.
C. $5.220.
D. $5.213.

8-20
72. Garrison Corporation uses the FIFO method in its process costing system. Data concerning the first
processing department for the most recent month are listed below:
Beginning work-in-process inventory:

Units in beginning work-in-process inventory 600
Materials costs $6,600
Conversion costs $2,700
Percent complete with respect to materials 60%
Percent complete with respect to conversion 10%
Units started into production during the month 7,000
Materials costs added during the month $102,200
Conversion costs added during the month $259,200
Ending work-in-process inventory:
Units in ending work-in-process inventory 1,500
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the
answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations
to at least three decimal places.
How many units were started AND completed during the month in the first processing department?

A. 6,100.
B. 5,500.
C. 7,600.
D. 7,000.

8-21

The cost per equivalent unit for conversion costs for the first department for the month is closest to:

A. $42.49.
B. $43.96.
C. $45.00.
D. $41.87.

8-22
74. Bentwood Corporation uses the FIFO method in its process costing system. Data concerning the first

Units transferred to the next department during
6,100
the month
What are the equivalent units for materials for the month in the first processing department?

A. 1,680.
B. 7,150.
C. 8,200.
D. 5,200.

8-23

Units transferred to the next department during
6,100
the month

A. $40.57.
B. $45.33.
C. $39.31.
D. $37.44.

76. Which of the following statements regarding first-in, first-out (FIFO) process costing is(are) true?
(A) First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before
transferring out the costs associated with units started and completed.
(B) First-in, first-out process costing requires one additional step in assigning costs to the units transferred
out and the ending Work-in-Process Inventory.

A. Only A is true.
B. Only B is true.

8-24
77. In order to compute equivalent units of production using the FIFO method of process costing, work for the
period must be broken down to units:

A. completed during the period and units in ending inventory.

B. started during the period and units transferred out during the period.
C. completed from beginning inventory, started and completed during the month, and units in ending
inventory.
D. processed during the period and units completed during the period.

78. The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which
were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received
from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units which were
50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses
first-in, first-out (FIFO) process costing.
How many units were transferred-out during the period?

A. 12,000.
B. 13,000.
C. 18,000.
D. 20,000.

How many units were started and completed during the period?

A. 12,000.
B. 13,000.
C. 18,000.
D. 20,000.

8-25
What are the equivalent units of production for materials during the period?

A. 12,000.
B. 13,000.
C. 14,000.
D. 15,000.

What are the equivalent units of production for the conversion costs during the period?

A. 14,500.
B. 15,100.
C. 16,500.
D. 17,100.

82. In computing the current period's manufacturing cost per equivalent unit, the FIFO method of process
costing considers: (CPA adapted)

A. only current period costs.

B. current period costs plus cost of beginning work-in-process inventory.
C. current period costs less cost of beginning work-in-process inventory.
D. current period costs plus the cost of ending work-in-process inventory.

8-26
83. The debits to Work-in-Process for Department #2 for the month of April of the current year, together with
information concerning production, are presented below. All direct materials come from Department #1.
The units completed include the 1,200 in process at the beginning of the period. Department #2 uses FIFO
costing.
WORK-IN-PROCESS - DEPARTMENT #2
1,200 units, ¼ Product X, 6,200
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
What are the total costs to be accounted for on the production cost report for Department #2 for the period?
A. $16,400.
B. $17,600.
C. $11,600.
D. $12,660.

costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
What are the equivalent units of production for conversion costs?

A. 500.
B. 5,500.
C. 5,900.
D. 6,400.

8-27
costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The conversion costs per equivalent unit is:

A. $1.00.
B. $1.50.
C. $2.00.
D. $2.55.

costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The unit cost of Product X started in the prior period and completed in the current period is:

A. $2.00.
B. $3.60.
C. $2.55.
D. $3.45.

8-28
costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The unit cost of Product X started and completed in the current period is:

A. $2.00.
B. $2.50.
C. $2.55.
D. $2.60.

costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The cost of goods transferred to finished goods is:

A. $17,660.
B. $16,000.
C. $13,000.
D. $12,800.

8-29
costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The cost of the ending Work-in-Process Inventory is:

A. $2,600.
B. $1,600.
C. $600.
D. $1,000.

90. In a production cost report using process costing, transferred-in costs are most similar to:

A. material added at the beginning of the process.

B. conversion costs added during the process.
C. costs transferred-out to the next process.
D. costs included in beginning inventory.

8-30
91. A process costing system was used for a department that began operations in January 2016. Approximately
the same number of physical units, at the same degree of completion, were in work-in-process at the end of
both January and February. Monthly conversion costs are allocated between ending work-in-process and
units completed. Compared to the FIFO method, would the weighted-average method use the same or a
greater number of equivalent units to calculate the monthly allocations? (CPA adapted)
Equivalent Units for Weighted Average compared to

FIFO
January February
A. Same Same
B. Greater Same
C. Greater Greater
D. Same Greater

A. Option A
B. Option B
C. Option C
D. Option D

92. Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining
industry. The following information pertains to operations for November. (CMA Exam adapted)
Units
st
Work in process, November 1 16,000
Started in production during November 100,000
Work in process, November 30th 24,000
The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The
ending inventory was 90% complete as to materials and 40% complete as to conversion costs.
Costs pertaining to November are as follows:
Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead, $15,240.
Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing
overhead, $391,160.
What is the equivalent unit cost for materials assuming Bentley uses first-in, first-out (FIFO) process
costing?

A. $4.12.
B. $4.50.
C. $4.60.
D. $4.80.

8-31
Units
Work in process, November 1st 16,000
th
overhead, $391,160.
What is the equivalent unit cost for the conversion costs assuming Bentley uses first-in, first-out (FIFO)
process costing?

A. $5.65.
B. $5.83.
C. $6.00.
D. $6.20.

Units
st
overhead, $391,160.
What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses first-in, first-out
(FIFO) process costing?

A. $153,168.
B. $154,800.
C. $155,328.
D. $156,960.

8-32
Units
th
overhead, $391,160.
What is the equivalent unit cost for materials assuming Bentley uses weighted-average process costing?

A. $4.12.
B. $4.50.
C. $4.60.
D. $4.80.

Units
st
overhead, $391,160.
What is the equivalent unit cost for the conversion costs assuming Bentley uses weighted-average process
costing?

A. $5.65.
B. $5.83.
C. $6.00.
D. $6.20.

8-33

Units
st
overhead, $391,160.
What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses weighted-average
process costing?

A. $86,400.
B. $153,960.
C. $154,800.
D. $156,960.

98. A process costing system:

A. uses a separate Work-in-process account for each processing department.

B. uses a single Work-in-process account for the entire company.
C. uses a separate Work-in-process account for each type of product produced.
D. does not use a Work-in-process account in any form.

99. Additional materials are added in the second department of a four-department production process.
However, this addition does not increase the number of units being produced in the second department, but
will:

A. increase the equivalent units of production.

B. increase the total cost per unit.
C. decrease the value of the transferred-in costs.
D. decrease the total costs to account for.

8-34
100. Under which of the following conditions will the FIFO method produce the same cost of goods
manufactured as the weighted-average method?

A. There is no ending inventory.

B. There is no beginning inventory.
C. The beginning and ending inventories are equal.
D. The beginning and ending inventories are both 50% complete.

101. Which of the following statements is(are) true?
I. For cost control, the FIFO method of process costing is better than the weighted-average method.
II. The weighted-average method of process costing assigns more cost to units completed (transferred out)
than the FIFO method.

A. Only I is true.
B. Only II is true.
C. Both I and II are true.
D. Neither I nor II is true.

102. Which of the following statements is(are) false?
(A) Operations costing accounts for material costs like job costing and conversion costs like process
costing.
(B) An automobile manufacturer is more likely to use an operations costing system than a process costing
system.

A. Only A is false.
B. Only B is false.
C. Both A and B are false.
D. Neither A nor B is false.

103. Operations costing systems are used when the products have:

A. used a standardized method that is repeatedly performed.

B. common characteristics and no individual characteristics.
C. individual characteristics and no common characteristics.
D. some common characteristics and some individual characteristics.

8-35
104. An operations costing system is:

A. identical to a process costing system except that actual cost is used for manufacturing overhead.
B. the same as a process costing system except that materials are allocated on the basis of batches of
production.
C. the same as a job order costing system except that materials are accounted for in the same way as they
are in a process costing system.
D. the same as a job order costing system except that no overhead allocations are made since actual costs
are used throughout.

105. Predetermined manufacturing overhead rates can be used in all of the following costing systems except:

A. job costing.
B. process costing.
C. operations costing.
D. actual costing.

Essay Questions

106. Cordon Processing uses a process costing system to account for its solvent plant. Beginning inventory
consisted of 14,000 gallons (80% complete as to material, 55% complete as to labor). Cordon added
213,000 gallons into the process during April. On April 30th there were 18,000 gallons still in process (60%
complete as to material, 45% complete as to labor).
Required:
(a) Calculate the equivalent units of production for each input, assuming Cordon uses weighted-average.
(b) Calculate the equivalent units of production for each input, assuming Cordon uses FIFO.

8-36
107. Ralston Fine Hardwoods uses a process costing system to account for its wood processing plant. Beginning
inventory consisted of 4,000 board feet of lumber (100% complete as to material, 35% complete as to
labor). Ralston added 132,000 board feet into the process during April. On April 30th there were 10,000
board feet still in process (100% complete as to material, 22% complete as to labor).
Required:
(a) Calculate the equivalent units of production for each input, assuming Ralston uses weighted-average.
(b) Calculate the equivalent units of production for each input, assuming Ralston uses FIFO.

8-37
108. Manning Corporation uses the weighted-average method in its process costing. The following data pertain
to its Processing Department for September.
Percent Complete
Material
Units Conversion
s
Work-in-process,
700 65% 45%
September 1
Units started into
September
Units completed during
September and transferred 7,300
to the next department
Work-in-process,
1,700 90% 40%
September 30
Required:
Compute the equivalent units of production for both materials and conversion costs for the Processing
Department for September using the weighted-average method.

8-38
109. The following data have been provided by Florrisant Corporation, which uses the weighted-average
method in its process costing. The data are for the company's Assembly Department for October.
Percent Complete
Material
Units Conversion
s
Work-in-process, October
900 55% 50%
1
Units started into
8,200
production during October
October and transferred to
7,100
the next department
Work-in-process, October
2,000 85% 35%
31
Required:
Compute the equivalent units of production for both materials and conversion costs for the Assembly
Department for October using the weighted-average method.

8-39
110. Markov Inc. uses the weighted-average method in its process costing system. The following data concern
the operations of the company's first processing department, Sculpting, for a recent month.
Work-in-process, beginning:
Units in process 200
Work-in-process, ending:
Required:
Using the weighted-average method, determine the equivalent units of production for materials and
conversion costs.

8-40
111. Roubideaux Corporation uses process costing. The following data pertain to its Packing Department for
February.
Units in process, February 1: materials 85%

500
complete, conversion 70% complete
Units started into production during February 6,900
Units completed and transferred to the next
6,200
department
1,200
Required:
Determine the equivalent units of production for the Packing Department for February using the weighted-
average method.

8-41
112. Highlite Corporation uses the weighted-average method in its process costing. The following data pertain
to its Formulation Department for November.
Units in process, November 1: materials 85%

700
Units started into production during November 5,500
4,700
department
1,500
Required:
Determine the equivalent units of production for the Formulation Department for November using the
weighted-average method.

8-42
113. Everglades Furniture uses a process cost system to account for its chair factory. Beginning inventory
consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800
materials and $104,500 conversion. 58,000 units were started into production during the month with
material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was
100% complete as to materials and 40% complete as to labor. Everglades uses weighted-average costing.
Required:
(HINT: use 4 decimal places in your calculations)
a. Compute the equivalent units of production for each input.

b. Compute the cost per unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.

8-43
114. Toxo Chemicals produces a solvent in its Glendale plant. Three chemicals are combined at the start of the
process and blended under pressure for a period of time. At the 75% point of completion, an additional
chemical is added. The following information has been gathered:
Chemical Additional Conversion

Gallons
Mix Chemical Cost
BWIP $5,000 -0- $3,000 10,000
Added 65,000 15,000 35,000 100,000
Toxo completed 98,000 gallons during the month. The process engineer informs you that the beginning
WIP was at the 30% completion point, the ending WIP is at 70%. Toxo uses weighted-average costing.
Required:


8-44
115. Tracker Sports is a manufacturer of sportswear. Tracker produces its products in two departments.
The information for the current month for Department #2 is as follows:
Beginning work-in-process 20,000 units

Units transferred in from Dept #1 40,000 units
Units completed 50,000 units
Ending work-in-process 10,000 units
Beginning WIP transferred in costs $50,000
Beginning WIP direct materials $12,000
Beginning WIP direct labor $3,200
Beginning WIP overhead $1,600
Costs transferred in from Dept #1 $100,000
Direct material added during month $60,000
Direct manufacturing labor during
$20,000
month
Manufacturing overhead applied ???
Beginning WIP was half complete as to conversion costs. Direct materials for Department #2 are added
when the process is 25% complete. Factory overhead is applied at a rate equal to 50 percent of direct
manufacturing labor. Ending WIP was 60 percent complete. Tracker Sports uses weighted-average costing.
Required:


8-45
116. Malcom Industries manufactures a silicone paste wax that goes through three processing departments:
cracking, blending, and packing. All raw materials are introduced at the start of work in the cracking
department, with conversion costs being incurred uniformly in each department. The Work-in-Process T-
account for the cracking department for July is:
Work-in-Process Inventory (Cracking Department)

Balance, July 1 (35,000 lbs, 4/5 done) $63,700
Direct materials (280,000 lbs) 397,600
Conversion costs 189,700
Balance, July 31 (45,000 lbs, 2/3 done) ??
Costs transferred to Blending Dept ??
The beginning balance inventory consists of $43,400 in materials cost. Malcom uses the weighted-average
method to account for its operations.
Required (use 4 decimal places for computations):
(a) What would be the Cracking Department inventory balance on July 31?
(b) What would be the cost transferred to the Blending Dept. in July?

8-46
117. The Safety Chemical Company produces a special kind of body oil that is widely used by professional
sports trainers. The oil is produced in three processes: Refining, Blending, and Mixing. Raw oil materials
are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the
blending process when processing is 50% completed.
The following Work-in-Process account for the Blending Department is available for the month of July.
The July 1 Work-in-Process inventory contains $5,920 in material costs, and $1.56/unit in costs transferred
in from the Refining Department.
Work-in-Process: Blending
Beginning balance (8,000 gal, 30% complete) $22,850
Costs transferred in from Refining (29,000 gal.) 48,200
Materials 20,810
Direct labor 5,748
Overhead 11,600
Ending balance (4,000 gal, 40% complete)
The Safety Chemical Company uses weighted-average costing.
(a) Compute the equivalent units of production for Blending.

(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)
(c) Compute the costs transferred out to the Mixing Department for July.
(d) Compute the July 31 Work-in-Process Inventory balance.

8-47
The following Work-in-Process account for the Refining Department is available for the month of July.
The July 1 Work-in-Process Inventory contains $1,500 in material costs.
Work-in-Process: Refining
Materials (30,000 gal.) 12,300
Direct labor 14,500
Overhead 21,750
Ending balance (6,000 gal., 2/3 complete)
(a) Compute the equivalent units of production for Refining for July.
(b) Compute the material cost per unit and the conversion cost per unit for July.
(c) Compute the costs transferred to the Blending Department for July.

8-48
119. The Rosa Lee Manufacturing Company produces a single product in a single processing department. The
material is added when 25% of the conversion costs have been added.
The Work-in-Process Inventory account on April 30th includes the following information:
Beginning balance $1,682 ($600 is materials)

Material 5,325
Labor 10,863
Overhead 15,012
During the month, the company finished and transferred 72,000 units out of the Work-in-Process
Inventory. 9,000 units were in process at the beginning of the month and were 40% complete. 8,000 units
were in process at the end of the month, and were 70% complete. The company uses weighted-average
process costing.
(a) Compute the equivalent units of production (EUP) for materials and conversion costs in April.
(b) Compute the unit conversion costs and unit material costs for April.
(c) Compute the total cost transferred out of the Work-in-Process Inventory during the month of April.
(d) Compute the cost of the ending inventory for April.

8-49
120. Pattern Corporation uses the FIFO method in its process costing. The following data pertain to its Cutting
Department for August.
Percent Complete
Material
Units Conversion
s
Work-in-process, August
500 50% 45%
1
Units started into
8,100
production during August
August and transferred to 7,200
the next department
Work-in-process, August
1,400 75% 30%
31
Required:
Compute the equivalent units of production for both materials and conversion costs for the Cutting
Department for August using the FIFO method.

8-50
121. The following data pertain to the Grinding Department of Dancer Corporation for July. The company uses
the FIFO method in its process costing.
Percent Complete
Material
Units Conversion
s
Work-in-process, July 1 900 60% 25%
Units started into
6,700
production during July
July and transferred to the 5,700
next department
Work-in-process, July 31 1,900 70% 30%
Required:
Compute the equivalent units of production for both materials and conversion costs for the Grinding
Department for July using the FIFO method.

8-51
122. Mobility, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Shaping - for a recent month.
Required:
Using the FIFO method, determine the equivalent units of production for materials and conversion costs.

8-52
123. Galaxy Corporation uses the FIFO method in its process costing. The following data pertain to its
Assembly Department for June.
Units in process, June 1: materials 55% complete,

800
conversion 15% complete
Units started into production during June 5,200
4,300
department
1,700
Required:
Determine the equivalent units of production for the Assembly Department for June using the FIFO
method.

8-53
124. The following data have been provided by Brice Corporation for the 3-D Printing Department. The
company uses the FIFO method in its process costing.
Units in process, August 1: materials 60%

900
Units started into production during August 8,400
Units started and completed during August 6,500
7,400
department during August
1,900
Required:
Determine the equivalent units of production for the 3-D Printing Department for August using the FIFO
method.

8-54
125. The Microprocessor Manufacturing Company produces a single product in a single processing department.
The material is added when 25% of the conversion costs have been added.
Beginning balance $1,382

Material 5,325
Labor 10,863
Overhead 15,012
Inventory. 9,000 units were in process at the beginning of the month, which were 40% complete. 8,000
units were in process at the end of the month, which were 70% complete. The company uses first-in, first-
out (FIFO) process costing.

8-55
Direct labor 14,500
Overhead 21,750
The July 1 Work-in-Process inventory contains $5,920 in material costs, and $1.56/unit in costs transferred
in from the Refining Department.
Costs transferred in from Refining ???
Materials 20,810
Direct labor (725 hours) 5,748
Overhead 11,600
Ending balance (4,000 gal., 40% complete)
The Safety Chemical Company uses first-in, first-out (FIFO) costing for the Refining Department and
weighted-average costing for the Blending Department.
Part 1: Refining Department
(a) Compute the equivalent units of production for July.

Part 2: Blending Department
(e) Compute the equivalent units of production.

(f) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)
(g) Compute the costs transferred out for July.
(h) Compute the July 31 Work-in-Process Inventory balance.

8-56

Beginning balance (5,000 gallons, 80% complete) $7,500
Materials (30,000 gallons) 12,300
Direct Labor 14,500
Overhead 21,750
Ending balance (6,000 gallons, 2/3 complete)
The Safety Chemical Company uses first-in, first-out (FIFO) costing.

8-57
The July 1 Work-in-Process inventory contains $10,370 in conversion costs, and $1.56/unit in costs
transferred in from the Refining Department.
Work-in-Process:

Blending
Beginning balance (8,000
$22,850
gal, 30% complete)
Costs transferred in from
48,200
Refining (29,000 gal.)
Materials 20,810
Direct labor 5,748
Overhead 11,600
Ending balance (4,000 gal.,

40% complete)

(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three.)

8-58

$20,000
month
manufacturing labor. Ending WIP was 60 percent complete. Tracker Sports uses first-in, first-out (FIFO)
costing.
Required:


8-59

The beginning balance inventory consists of $43,400 in materials cost. Malcom uses the first-in, first-out
(FIFO) method to account for its operations.

8-60
consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800
materials and $104,500 conversion. 58,000 units were started into production during the month with
material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was
100% complete as to materials and 40% complete as to labor. Everglades uses first-in, first-out (FIFO)
costing.
Required:


8-61
132. Toxo Chemicals produces a solvent in its Glendale plant. Three chemicals are combined at the start of the
process and blended under pressure for a period of time. At the 75% point of completion, an additional
chemical is added. The following information has been gathered:
Additiona
Chemical Conversion
l Gallons
Mix Cost
Chemical
BWIP $5,000 -0- $3,000 10,000
Added 65,000 15,000 35,000 100,000
WIP was at the 40% completion point, the ending WIP is at 70%. Toxo uses first-in, first out (FIFO)
costing.
Required:


8-62
133. Racquet Master (RM) Sports manufactures and distributes two types of tennis rackets: Dominant Drive
(DD) and Major Smash (MS). Both types of rackets go through Operations 1 and 3. MS also goes through
Operation 2, which adds a layer of graphite for additional strength. All material is added at the beginning
of their respective operations.
The following information relates to a work order from Discount Warehouse, Inc. for 30,000 units of DD
(Work order #286) and 8,000 units of MS (Work order #354).
Work order #286 Work order #354

Direct materials:
Operation 1 $120,000 $80,000
Operation 2 --- 20,000
Operation 3 45,000 30,000
Conversion costs:
Operation 1 30,000 15,000
Operation 3 14,793 14,896
Required:
Assume that there are 3,000 units of DD and 2,000 units of MS in Operation 3 at the end of the reporting
period 45% and 65% complete respectively. Compute the ending inventory for Operation #3.

8-63
134. Martin Enterprises uses three operations in sequence to manufacture an assortment of flower pots. In each
operation, the same procedures, time, and costs are used to perform that operation, regardless of the type of
pot being produced. During March, a batch of 500 Clay Pots and a batch of 800 Porcelain Pots were put
through the first operation. All materials for a batch are introduced at the beginning of the operation for
that batch. The costs shown below were incurred in March for the first operation:
Direct Labor $4,450

Manufacturing Overhead 3,600
Direct Materials:
Clay Pots $1,200
Porcelain Pots $2,400
There were no inventories at the beginning of the month; 400 units of Clay Pots and 600 units of Porcelain
Pots were transferred to the next operation. The ending inventories were 30% and 60% complete for Clay
and Porcelain, respectively.
Required:
What is the total cost of the ending inventory in process for operation #1?

8-64
135. Carmen Products makes four models of guitars. All of the models go through the same assembly line but
they differ as to the materials used and the degree of finishing. The Basic model has a low gloss finish and
goes immediately to Packaging upon completion in Assembly. The Super model and the Premium model
go through a Buffing process upon completion in Assembly. They then go on to Packaging. The Deluxe
model is the top of the line and goes first to Buffing from the Assembly, then to Special Polishing, then to
Packaging.
Carmen uses operations costing and allocates conversion costs based on the number of units processed in
each department.
Premiu Delux
Total Basic Super
m e
Units 1,000 500 250 50
Materials $97,500 $40,000 $30,000 $20,000 $7,500
Conversion

costs:
Assembly $54,000
Buffing 32,000
Special
3,000
Polish
Packaging 9,000
Total $98,000
Required:
What is the cost per unit of each of the completed guitars?

8-65
136. Sparkle Inc. is a company that produces liquid cleaning products. Sparkle's management is trying to decide
whether to install a job or process costing system. The manufacturing vice president has stated that job
costing gives the best control because it is possible to assign costs to specific lots of goods. The controller,
however, has stated that job costing requires too much record keeping. Would a process costing system
meet the manufacturing vice president's control objectives? Explain.

137. What would happen to the equivalent units, production cost per unit and costs transferred out for a
company using weighted-average if the degree of completion of the ending inventory were
underestimated?

138. Describe the five steps in preparing a production cost report.

8-66
139. Explain the major differences between weighted-average costing and FIFO costing.

140. Is cost accumulation easier under a process costing system or a job-order costing system?

141. What characteristics of the production process would lead a company to use process costing rather than job
costing?

8-67
142. The more important individual unit costs are for making decisions, the more likely it is that process costing
will be preferred to job costing. Do you agree?

143. Carlton Electronics manufactures three cell phone models, General, Premium, and Deluxe, which differ in
the components included. Production takes place in two departments, Assembly and Special Packaging.
Batches of General phones are made to service government military contracts. Premium model production
phones are specific to corporate contracts. Deluxe model phones are sold commercially through big-box
stores. Explain why operation costing might be a consideration for Carlton.

8-68
144. Production and cost data for the month of February for Process A of the Packer manufacturing Company
follow:
Units in process, February 1

(100% complete with respect to materials;
25% complete with respect to conversion cost) 2,000
New units started in process 8,000
1/3 complete with respect to conversion cost) 3,000
Work-in-process inventory, February 1:
Materials $600
Conversion $100
Costs incurred in February:
Materials issued $2,560
Conversion $1,500
The company uses the weighted-average cost method in its process costing system.
Required:
a. Calculate the equivalent units and cost per equivalent unit for February for materials and for conversion
costs. (Carry calculations out to the nearest tenth of a cent.)
b. Determine the cost transferred to finished goods.
c. Determine the amount of cost that should be assigned to the ending work-in-process.

8-69
145. Tiny Villages Inc. uses the weighted-average method in its process costing system. The following data
concern the operations of the company's first processing department - Extruding - for a recent month.
Costs in the beginning inventory:
Materials cost $1,368
Conversion cost $8,064
Units completed and transferred out 11,000
Costs added to production during the month:
Required:
a. Determine the equivalent units of production.

b. Determine the costs per equivalent unit.
c. Determine the cost of ending work-in-process inventory.
d. Determine the cost of the units transferred to the next department.

8-70
146. Paradise Inc. uses the weighted-average method in its process costing system. The following data concern
the operations of the company's first processing department - Cutting - for a recent month.
Materials cost $525
Required:
Using the weighted-average method:

a. Determine the equivalent units of production for materials and conversion costs.
b. Determine the cost per equivalent unit for materials and conversion costs.
c. Determine the cost of units transferred out of the department during the month.
d. Determine the cost of ending work-in-process inventory in the department.

8-71
147. In October, one of the processing departments at Radiance Corporation had beginning work-in-process
inventory of $29,000 and ending work-in-process inventory of $23,000. During the month, the cost of units
transferred out from the department was $311,000.
Required:
Construct a cost reconciliation report for the department for the month of November.

148. In May, one of the processing departments at Patton Corporation had beginning work-in-process inventory
of $31,000. During the month, $369,000 of costs were added to production and the cost of units transferred
out from the department was $368,000.
Required:
Construct a cost reconciliation report for the department for the month of March.

8-72
149. Dickerson Company uses a process costing system. The following information relates to one month's
activity in the company's Mixing Department.
Conversion Percent
Units
Complete
Beginning work-in-
10,000 20%
process inventory
Units started 21,000
Units completed and
26,000
transferred out
5,000 80%
inventory
The conversion cost of the beginning inventory was $6,500. During the month, $112,000 in additional
conversion cost was incurred.
Required:
a. Assume that the company uses the FIFO method. Compute:
1. The equivalent units of production for conversion for the month.

2. The cost per equivalent unit for conversion for the month.
3. The total cost transferred out during the month.
4. The cost assigned to the ending work-in-process inventory.
b. Assume that the company uses the weighted-average cost method. Compute:


8-73

150. Vacumatic, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Assembly - for a recent month.
Materials cost $595
Required:
Using the FIFO method:

d. Determine the cost of units transferred out of the department during the month.

8-74
151. Emerson, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Mixing - for a recent month.
Required:


8-75
152. Hsu Corporation uses the FIFO method in its process costing system. The following data concern the
company's Grinding Department for the month of August.
Cost in beginning work-in-process inventory $1,090

Units started and completed this month 2,670
Material
Conversion
s
Cost per equivalent unit $17.80 $34.50
Equivalent units required to
complete the units in beginning
180 160
work-in-process inventory
Equivalent units in ending work-
120 99
in-process inventory
Required:
Determine the cost of ending work-in-process inventory and the cost of units transferred out of the
department during August using the FIFO method.

8-76
153. The following data has been provided by Radiotronics Inc., a company that uses the FIFO method in its
process costing system. The data concern the company's Wiring Department for the month of March.

Material
Conversion
s
300 230
Equivalent units in ending work-
380 297
in-process inventory
Required:
Determine the cost of ending work-in-process inventory and the cost of the units transferred out of the
department during March using the FIFO method.

8-77
Chapter 08 Process Costing Answer Key
True / False Questions

1. Process costing assumes all units are homogeneous and follow the same path through the production
process.

TRUE
This statement is a basic concept of process costing; whereas, job costing assumes differing units.

AACSB: Analytical Thinking
AICPA: FN Measurement
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 08-01 Explain the concept and purpose of equivalent units.
Topic: Determining Equivalent Units

2. The equivalent unit concept refers to the actual amount of work during the period stated in terms of the
work required to complete an equal number of whole units.

TRUE
This is a definition of equivalent units.

Blooms: Remember
Difficulty: 2 Medium
Gradable: automatic

3. The number of units in the beginning Work-in-Process Inventory plus the units transferred out during
the period equals the number of units started during the period plus the number of units in the ending
Work-in-Process Inventory.

FALSE
Beginning WIP + started = Transferred out + Ending WIP

8-78
Blooms: Remember
Gradable: automatic
Learning Objective: 08-02 Assign costs to products using a five-step process.
Topic: Using Product Costing in a Process Industry

4. If materials are added continuously throughout the production process, then the equivalent units for
materials will always equal the equivalent units for the conversion costs.

TRUE
Conversion costs are added continuously; if materials are as well there is no need to separately compute
equivalent units since they would be the same.

Blooms: Understand
Gradable: automatic

materials in the ending Work-in-Process Inventory is always 100%.

TRUE
All the materials would be there, otherwise the units would not be in process. This is the most likely
scenario in process costing.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

materials in the ending Work-in-Process Inventory will be the same as the degree of completion for the
conversion costs.

FALSE
This would be true if materials are added continuously.

8-79
Blooms: Remember
Gradable: automatic

7. If materials are only added at the end of the production process, then the degree of completion for
materials of units in the ending Work-in-Process Inventory is always 0%.

TRUE
None of the materials would be there. Once the materials are added, the units are complete.

Blooms: Remember
Difficulty: 3 Hard
Gradable: automatic

8. In the weighted-average approach, the number of physical units transferred out cannot be greater than
the equivalent number of units produced during the period.

TRUE
EUP = transferred out + % completed × ending inventory. The number transferred can equal EUP, but
can never be greater.

Blooms: Remember
Difficulty: 3 Hard
Gradable: automatic

9. The weighted-average approach to process costing combines the work and costs done in prior periods
with the work and costs done in the current period.

TRUE
This is the basic concept of weighted-average.

Blooms: Remember
Difficulty: 1 Easy
8-80
Gradable: automatic
Learning Objective: 08-03 Assign costs to products using weighted-average costing.

10. In a weighted-average process costing system, the costs in the beginning Work-in-Process Inventory are
not used to compute the costs transferred-out.

FALSE
In weighted-average, the beginning WIP costs are combined with the current period costs to determine
cost per unit.

Blooms: Remember
Difficulty: 3 Hard
Gradable: automatic

11. First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before

TRUE
This is a basic concept of FIFO.

Blooms: Remember
Gradable: automatic
Learning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing.
Topic: Assigning Costs Using First-In, First-Out (FIFO) Process Costing

12. If the beginning Work-in-Process inventory is zero, first-in, first-out (FIFO) and weighted-average
process costing will assign the same amount to the units transferred out.

TRUE
It is the beginning WIP costs that creates differences between weighted-average and FIFO. If there is no
beginning WIP, there will be no difference.

Blooms: Remember
Difficulty: 3 Hard
Gradable: automatic
8-81

13. In general, the ending Work-in-Process Inventory value computed using first-in, first-out (FIFO) will be
the same as the ending value computed using weighted-average process costing.

FALSE
The two approaches will have different unit costs, so the costs assigned to ending WIP will differ.

Blooms: Remember
Difficulty: 3 Hard
Gradable: automatic

14. It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-
in-Process Inventory.

TRUE
If the time to complete a unit is longer than a month, it may be possible that not all units in beginning
WIP would be completed during the month.

Blooms: Apply
Gradable: automatic

15. The more prices change, the greater the difference between the costs assigned to units transferred out
using weighted-average costing and the costs assigned to units transferred out using first-in, first-out
(FIFO).

TRUE
Weighted-average combines several periods' costs, so the larger the change, the greater the difference.

Blooms: Apply
Gradable: automatic
Learning Objective: 08-06 Analyze the accounting choice between FIFO and weighted-average costing.
Topic: Determining Which is Better: FIFO or Weighted-Average?

8-82
16. In general, weighted-average costing is simpler to use while first-in, first-out (FIFO) costing provides
greater decision-making benefits to managers.

TRUE
Weighted-average is simpler since there is less attention paid to when units are completed. FIFO does a
better job for cost control since it identifies the period better.

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

17. The degree of completion associated with prior department costs is always 100%.

TRUE
It is the same as a material added at the start of the process. All the effort is there.

Blooms: Remember
Gradable: automatic
Topic: Using Costs Transferred in from Prior Departments

18. Job costing requires more detailed recordkeeping than process costing.

TRUE
Job costing traces costs to jobs or units while process costing averages costs.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 08-07 Know when to use process or job costing.

8-83
19. Operation costing is used in manufacturing goods that have some common characteristics and some
individual characteristics.

TRUE
The common characteristics are normally conversion costs; individual characteristics are the materials.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 08-08 Compare and contrast operation costing with job costing and process costing.
Topic: Operation Costing

20. Operation costing accounts for material costs like job costing and conversion costs like process costing.

TRUE
Materials vary and can be traced; conversion costs are consistent and can be averaged.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

Multiple Choice Questions

8-84
21. In process 2, material G is added when a batch is 60% complete. Ending work-in-process units, which
are 50% complete, would be included in the computation of equivalent units for: (CPA adapted)
Conversion Costs Material G

A. Yes No
B. No Yes
C. No No
D. Yes Yes

A. Option A
B. Option B
C. Option C
D. Option D
The addition point for the material has not yet been reached, so material G is 0% in ending WIP.

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-85
22. The following examples briefly describe the manufacture of two different products. Which costing
method (job-order or process) would be the best method to use for each project?
I. Steven Lawless manufactures Lawless Fine Wine Coolers. Steven once made the statement, "People
can have any flavor of Lawless Fine Wine Coolers they want as long it's strawberry."
II. Northridge Spacetronics is manufacturing three space shuttles for the country of Xanadu. Each
shuttle is slightly different and production will last approximately two years.
I II
A. Process Process
B. Job-Order Job-Order
C. Process Job-Order
D. Job-Order Process

A. Option A
B. Option B
C. Option C
D. Option D
Steven's product is homogenous; whereas, Northridge's product is heterogeneous.

Blooms: Apply
Gradable: automatic

23. Which of the following statements is(are) true regarding product costing?
(A) Twenty cans of paint that are 25% full are equivalent to four cans of paint that are completely full.
(B) The equivalent unit concept refers to the actual amount of work during the period stated in terms of
whole units.

A. Only A is true.

B. Only B is true.
This is a basic description of equivalent units. 20 × 25% = 5 equivalent units.

8-86
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

24. A company should use process costing, rather than job order costing, if:

A. production is only partially completed during the accounting period.

B. the product is manufactured in batches only as orders are received.
C. the product is composed of mass-produced homogeneous units.
D. the product goes through several steps of production.
Process costing has homogenous output and job costing has heterogeneous output.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

25. Which of the following characteristics applies to process costing, but does not apply to job order
costing?

A. the need for averaging.

B. the use of equivalent units of production.
C. separate, identifiable jobs.
D. the use of predetermined overhead rates.
Calculating equivalent units is a unique and necessary condition of process costing.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-87
26. Equivalent units for a process costing system, using the weighted-average method, would be equal to:

A. units completed during the period and transferred out.

B. units started and completed during the period plus equivalent units in the ending work-in-process
inventory.
C. units completed during the period less equivalent units in the beginning inventory, plus equivalent
units in the ending work-in-process inventory.
D. units completed during the period plus equivalent units in the ending work-in-process inventory.
Weighted-average combines the beginning inventory for the period and the units started during the
period. This is equivalent to the units completed during the period and the ending inventory.

Blooms: Understand
Gradable: automatic

27. The Fremont Company uses the weighted-average method in its process costing system. The company
recorded 29,500 equivalent units for conversion costs for November in a particular department. There
were 6,000 units in the ending work-in-process inventory on November 30, 75% complete with respect
to conversion costs. The November 1 work-in-process inventory consisted of 8,000 units, 50% complete
with respect to conversion costs. A total of 25,000 units were completed and transferred out of the
department during the month. The number of units started during November in the department was:

A. 24,500 units.

B. 23,000 units.
C. 27,000 units.
D. 21,000 units.
See calculation below.
Units started = Units completed and transferred out + Units in ending work-in-process - Units in
beginning work-in-process
= 25,000 + 6,000 - 8,000
= 23,000 units started

Blooms: Apply
Gradable: automatic

8-88
28. In a process costing system, the application of factory overhead usually would be recorded as an
increase in: (CPA adapted)

A. Finished goods inventory control.

B. Factory overhead control.
C. Cost of goods sold.
D. Work-in-process inventory control.
Same as for job costing—the application of overhead increases the WIP account.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

29. Sigman Co.'s inventories in process were at the following stages of completion at April 30:
No. of Units Percent Complete

100 90
50 80
200 10
Equivalent units of production in ending inventory amounted to: (CPA adapted)

A. 150.
B. 180.
C. 330.
D. 350.
(100*.9) + (50*.8) + (200*.1) = 150

Blooms: Apply
Gradable: automatic

8-89
30. An error was made by Marrow Company in computing the percentage-of-completion of the current
year's ending Work-in-Process Inventory. The error resulted in the assignment of a lower percentage of
completion to each component of the inventory than actually was the case. There was no beginning
Work-in-Process Inventory. What is the effect of this error on (1) cost assigned to cost of goods
completed for the period and (2) the computation of costs per equivalent unit?

A. Understated; Understated

B. Understated; Overstated
C. Overstated; Understated
D. Overstated; Overstated
The cost per equivalent unit will be overstated since the denominator will be too small. Since the cost
per unit is overstated, the cost of goods completed will be overstated as well.

Blooms: Analyze
Difficulty: 3 Hard
Gradable: automatic

31. Which of the following organizations would most likely use a process costing system?

A. Gasoline refinery.

B. Automobile retailer.
C. Airplane manufacturer.
D. Public accounting firm.
(b) is a retailer, (c) and (d) would use job costing.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-90
32. An equivalent unit of conversion costs is equal to the amount of conversion costs required to:

A. start a unit.

B. start and complete a unit.
C. transfer a unit in.
D. transfer a unit out.
This is a basic definition of equivalent units.

Blooms: Remember
Gradable: automatic

33. Of the following process costing steps, which must be done last?

A. Compute the equivalent units of production.

B. Compute the costs per equivalent unit of production.
C. Measure the physical flow of resources.
D. Identify the product costs to account for.
One needs to know the costs and the equivalent units before you can calculate cost per unit.

Blooms: Remember
Gradable: automatic

8-91
34. The Phantom Corporation started and completed 4,800 units during February. Phantom started the
month with 700 units in process (40% complete) and ended the month with 400 units in process (40%
complete). How many units were transferred to the Finished Goods Inventory during February?

A. 5,500.
B. 5,380.
C. 5,100.
D. 4,400.
700 + 4,800 - 400 = 5,100 units

Blooms: Apply
Gradable: automatic

35. If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-
Process Inventory, then the units transferred out are:

A. more than the units started during the period.

B. equal to the equivalent units of production.
C. less than the units started during the period.
D. equal to the actual work done during the period.
BWIP + TI - TO = EWIP; BWIP - EWIP = TO - TI. If BWIP > EWIP then TO > TI

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-92
36. Phantom Company has beginning and ending Work-in-Process Inventories that are 45% and 10%
complete, respectively. Materials are added at the beginning of the process. If first-in, first-out (FIFO)
process costing is used, the total equivalent units for materials will equal the number of units:


D. started into the process plus the units in the ending inventory.
Beginning WIP has all the materials. The equivalent units will be started & completed plus the ending
WIP = units started.

Blooms: Apply
Gradable: automatic

37. Which of the following statements concerning a process cost accounting system is false?

A. The units in beginning inventory plus the units transferred out during the month should equal the
units in the ending inventory plus the units transferred in during the month.
B. If material is used evenly throughout a process, the number of equivalent material units will equal
the number of equivalent units for the conversion (processing) costs.
C. Actual costing may be used in a process costing system to assign indirect overhead costs to
departments.
D. The units in beginning inventory plus the units transferred in during the month should equal the
units in the ending inventory plus the units transferred out during the month.
(b) is true, (c) actual costing MAY be used but is not necessary, (d) is the correct formula

Blooms: Remember
Gradable: automatic

8-93
38. The weighted-average method of process costing differs from the FIFO method of process costing in
that the weighted-average method:

A. can be used under any cost flow assumption.

B. does not require the use of predetermined overhead rates.
C. keeps costs in the beginning inventory separate from current period costs.
D. does not consider the degree of completion of units in the beginning work-in-process inventory
when computing equivalent units of production.
Weighted-average adds equivalent units to the current month product and calculating average unit and
total cost allocations.

Blooms: Understand
Gradable: automatic

39. The Miracle Company had 20,000 units in process on December 31, 2016 which was 80% complete as
to materials but only 40% complete as to conversion costs. The company's records show 40,000 units
were transferred to the Finished Goods Inventory during January 2017. On January 31, 2017, 15,000
units were on hand which were 30% complete as to conversion costs and 60% complete as to materials.
What are the equivalent units of production for the conversion costs in January, assuming Miracle uses
first-in, first-out (FIFO)?

A. 34,000.
B. 35,000.
C. 36,500.
D. 41,500.
Beginning inventory (20,000 × .60) + started and completed (20,000) + ending inventory (15,000 × .30)
= 36,500

Blooms: Apply
Gradable: automatic

8-94
September:
with respect to the conversion costs).
• 60,000 units were started into production.
• 50,000 units were completed and transferred to the next department.
• The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect
to conversion costs.
What are the equivalent units of production (EUP) for materials in the month of September assuming
Townson uses weighted-average process costing?

A. 52,000
B. 64,500
C. 66,000
D. 61,500
See calculations.
6,000 (BI) + 60,000 (TI) = 66,000 (Available) - 16,000 (EI) = 50,000 (TO)
EUPs for materials (weighted-average)

TO 50,000 × 100% = 50,000
EI 16,000 × 100% = 16,000
EUPS = 66,000

Blooms: Apply
Gradable: automatic

8-95
September:
with respect to the conversion costs)
• 60,000 units were started into production
• 50,000 units were completed and transferred to the next department
• The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect
to conversion costs.
What are the equivalent units of production (EUP) for the conversion costs in the month of September
assuming Townson uses weighted-average process costing?

A. 64,500
B. 56,000
C. 61,500
D. 54,000
See calculations.
6,000 (BI) + 60,000 (TI) = 66,000 (Available) - 16,000 (EI) = 50,000 (TO)
EUPs for conversion costs (weighted-average)

TO 50,000 × 100% = 50,000
EI 16,000 × 37.5% = 6,000
EUPS = 56,000

Blooms: Apply
Gradable: automatic

8-96
42. Haberdashery Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete).
During the period, 110,000 units were started and the ending Work-in-Process Inventory consisted of
20,000 units (80%). What are the equivalent units for conversion costs using weighted-average process
costing?

A. 110,000.
B. 115,000.
C. 121,000.
D. 131,000.
Started and completed (115,000) + Ending inventory (.80 × 20,000) = 131,000

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-97
43. Seaside Company uses the weighted-average method in its process costing system. The Sanding
Department started the month with 8,000 units in its beginning work-in-process inventory that were
70% complete with respect to conversion costs. An additional 69,000 units were transferred in from the
prior department during the month to begin processing in the Sanding Department. There were 5,000
units in the ending work-in-process inventory of the Sanding Department that were 20% complete with
respect to conversion costs.
What were the equivalent units for conversion costs in the Sanding Department for the month?

A. 67,400.
B. 73,000.
C. 72,000.
D. 66,000.
Total Conversion
Transferred to next department* 72,000 72,000
Conversion 5,000 units × 20% 5,000 1,000
Equivalent units of production 77,000 73,000
*Units transferred to the next department = Units in beginning work-in-process + Units started into
production - Units in ending work-in-process
= 8,000 + 69,000 - 5,000
= 72,000 units transferred to next department

Blooms: Apply
Gradable: automatic

8-98
44. The Marshall Company has a process cost system. All materials are added when the process is first
begun. At the beginning of September, there were no units of product in process. During September
50,000 units were started; 5,000 of these were still in process at the end of September and were 3/5
finished. The equivalent units of material in September were:

A. 40,000.
B. 45,000.
C. 48,000.
D. 50,000.
Started and completed (50,000 - 5,000) + ending WIP 5,000 = 50,000

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

45. The Chart Company has a process cost system. All materials are added when the process is first begun.
At the beginning of September, there were no units of product in process. During September 50,000
units were started; 5,000 of these were still in process at the end of September and were 3/5 finished.
The equivalent units for the conversion costs in September were:

A. 40,000.
B. 45,000.
C. 48,000.
D. 50,000.
45,000 + 5,000(.60) = 48,000 equivalent units.

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-99
46. Department B had a beginning inventory of 400 units, 1/4 completed; an ending inventory of 300 units,
2/3 completed, and received 900 units during the period from Department A. What was the equivalent
unit production of Department B, assuming weighted-average process costing?

A. 800 units.

B. 900 units.
C. 1,100 units.
D. 1,200 units.
1,000 + (300 × 2/3) = 1,200 equivalent units

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-100
47. Madison Corporation's production cycle starts in the Processing Department. The following information
is available for April:
Units
Total units in process during April 280,000
Materials are added at the beginning of the process in the Processing Department. What are the
equivalent units of production for the month of April, assuming Madison uses the weighted-average
method?
Materials Conversion Costs

A. 240,000 260,000
B. 255,000 235,000
C. 280,000 270,000
D. 315,000 285,000

A. Option A
B. Option B
C. Option C
D. Option D
Materials: 255,000 (started and completed) + 25,000 (ending inventory) = 280,000; Conversion costs:
255,000 + 25,000(.60) = 270,000

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

8-101
48. Department A had no Work-in-Process at the beginning of the period, 1,000 units were completed
during the period, 200 units were 50% completed at the end of the period, and the following
manufacturing costs were debited to the departmental Work-in-Process account during the period:
Direct materials (1,200 at $10) $12,000

Direct labor 5,500
Factory overhead 4,400
Assuming that all direct materials are added at the beginning of production and Department A uses
weighted-average process costing, what is the total cost of the departmental Work-in-Process Inventory
at the end of the period?

A. $3,650.
B. $2,900.
C. $2,000.
D. $1,825.
Materials: $12,000/1,200 = $10.00 per unit; Conversion costs: ($5,500 + 4,400)/1,100 = $9.00; Ending
inventory: 200($10.00) + 100($9.00) = $2,900

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

49. DriveTrain, Inc. instituted a new process in October 2016. During October, 10,000 units were started in
Department A. Of the units started, 8,000 were transferred to Department B, and 2,000 remained in
Work-in-Process at October 31, 2016. The Work-in-Process at October 31, 2016, was 100% complete
as to material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion
costs of $36,000 were charged to Department A in October. What were the total costs transferred to
Department B assuming Department A uses weighted-average process costing?

A. $46,900.
B. $53,600.
C. $56,000.
D. $57,120.
[($27,000/10,000) × 8,000] + [($36,000/9,000) × 8,000] = $21,600 + 32,000 = $53,600

Blooms: Apply
8-102
Difficulty: 3 Hard
Gradable: automatic

50. In a process costing system, manufacturing overhead applied is usually recorded as a debit to:

A. Finished goods.

B. Work-in-process.
C. Manufacturing overhead.
D. Cost of goods sold.
The standard entry is to debit Work-in-Process and credit Manufacturing Overhead Applied.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

51. The Lakeside Company uses a weighted-average process costing system. The following data are
available:

4,000
labor and overhead)
Equivalent units of production for material are:

A. 16,000.
B. 17,000.
C. 19,000.
D. 20,000.
16,000 + 4,000 = 20,000

Blooms: Apply
8-103
Difficulty: 1 Easy
Gradable: automatic

available:

4,000
labor and overhead)
Equivalent units of production for labor and overhead are:

A. 16,000.
B. 17,000.
C. 19,000.
D. 20,000.
16,000 + 4,000(.25) = 17,000

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-104
available:

4,000
labor and overhead)
Unit cost of material is:

A. $2.20.
B. $2.07.
C. $1.85.
D. $1.76.
$35,200 ÷ 20,000 = $1.76

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-105
available:

4,000
labor and overhead)
Unit cost of labor and overhead is:

A. $2.34.
B. $2.20.
C. $1.97.
D. $1.87.
$37,400 ÷ 17,000 = $2.20

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-106
available:

4,000
labor and overhead)
Total cost of the 16,000 units finished is:

A. $63,360.
B. $67,320.
C. $72,640.
D. $65,120.
16,000 × (1.76 + 2.20) = $63,360

Blooms: Apply
Gradable: automatic

8-107
available:

4,000
labor and overhead)
Total cost of the 4,000 units of the ending inventory:

A. $15,840.
B. $14,520.
C. $9,240.
D. $8,910.
4,000(1.76) + 1,000(2.20) = $9,240

Blooms: Apply
Gradable: automatic

8-108
57. The following information pertains to Oklahoma Co.'s Tulsa Division for the month of April:
Units Materials
Beginning Work-in-Process 15,000 $5,500
Started in April 40,000 $18,000
Ending Work-in-Process 12,500
All materials are added at the beginning of the process. Using the weighted-average method, the cost
per equivalent unit of materials is: (CPA adapted)

A. $0.59.
B. $0.55.
C. $0.45.
D. $0.43.
($5,500 + 18,000)/(42,500 + 12,500) = $0.43

Blooms: Apply
Gradable: automatic

8-109
58. Nebraska Company uses the weighted-average method in its process costing system. The first
processing department, the Welding Department, started the month with 18,000 units in its beginning
work-in-process inventory that were 30% complete with respect to conversion costs. The conversion
cost in this beginning work-in-process inventory was $44,820. An additional 90,000 units were started
into production during the month. There were 21,000 units in the ending work-in-process inventory of
the Welding Department that were 10% complete with respect to conversion costs. A total of $677,970
in conversion costs were incurred in the department during the month.
places.)

A. $8.112.
B. $8.300.
C. $7.533.
D. $6.108.
Total Conversion
= 18,000 + 90,000 - 21,000
Beginning work-in-process
$44,820
inventory
Cost added during the
677,970
period
Total cost (a) $722,790
Equivalent units of
89,100
production (b)
Cost per equivalent unit, (a)
$8.112
÷ (b)

Blooms: Apply
Gradable: automatic
8-110

8-111
59. Kansas Company uses the weighted-average method in its process costing system. Operating data for
the first processing department for the month of June appear below:
Percent Complete with

Units Respect to Conversion
Beginning work-in-
11,000 50%
process inventory
Started into
June
Ending work-in-
21,000 80%
process inventory
$46,915 at the beginning of June. Additional conversion costs of $825,183 were incurred in the
What was the cost per equivalent unit for conversion costs for the month? (Round to three decimal
places.)

A. $8.420.
B. $6.934.
C. $8.530.
D. $8.322.
Total Conversion
= 11,000 + 98,000 - 21,000
Beginning work-in-process inventory $46,915

Cost added during the period 825,183
Equivalent units of production (b) 104,800
Cost per equivalent unit, (a) ÷ (b) $8.322

8-112
Blooms: Apply
Gradable: automatic

60. Fanciful Structures Company uses the weighted-average method in its process costing system. The first
processing department, the Welding Department, started the month with 22,000 units in its beginning
work-in-process inventory that were 20% complete with respect to conversion costs. The conversion
cost in this beginning work-in-process inventory was $23,320. An additional 97,000 units were started
into production during the month and 101,000 units were completed in the Welding Department and
transferred to the next processing department. There were 18,000 units in the ending work-in-process
inventory of the Welding Department that were 40% complete with respect to conversion costs. A total
of $529,380 in conversion costs were incurred in the department during the month.
places.)

A. $5.300.
B. $5.458.
C. $4.603.
D. $5.108.
Total Conversion
Transferred to next department 101,000 101,000


Blooms: Apply
Gradable: automatic

8-113
61. Holcomb Company uses the weighted-average method in its process costing system. The Shaping
Department is the second department in its production process. The data below summarize the
department's operations in January.
Percent Complete
with Respect to
Units
Conversion
Beginning work-in-
3,800 90%
process inventory
Transferred in from the
prior department during 53,000
January
Completed and
transferred to the next
51,300
department during
January
5,500 30%
inventory
The accounting records indicate that the conversion cost that had been assigned to beginning work-in-
process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department
during January.
What was the cost per equivalent unit for conversion costs for January in the Shaping Department?
(Round to three decimal places.)

A. $1.654.
B. $1.752.
C. $1.490.
D. $1.499.
Total Conversion


8-114
Blooms: Apply
Gradable: automatic

62. In the computation of the manufacturing cost per equivalent unit, the weighted-average method of
process costing considers:

A. current costs only.

B. current costs plus cost of beginning Work-in-Process Inventory.
C. current costs plus cost of ending Work-in-Process Inventory.
D. current costs less cost of beginning Work-in-Process Inventory.
This is the basic concept of weighted-average. FIFO considers current costs only.

Blooms: Remember
Gradable: automatic

63. Morgenstern Company had Work-in-Process Inventories that were 45% complete at the start of the
month. Work-in-Process at the end of the month was 10% complete. Materials were added at the
beginning of the process. If weighted-average process costing is used, the total equivalent units for
materials will equal the number of units:


D. transferred out during the process plus the units in the ending inventory.
When all the material is added at the start of the process it doesn't matter when the units were started or
where they are, they all contain 100% material even if they are spoiled.

Blooms: Apply
Gradable: automatic

8-115
64. Materials are added at the beginning of a process in a process costing system. The beginning Work-in-
Process Inventory was 30% complete as to conversion costs. Using first-in, first-out (FIFO) process
costing, the total equivalent units for material are:

A. beginning inventory this period for this process.

B. units started this period in this process.
C. units started this period in this process plus the beginning inventory.
D. units started this period in this process plus 70% of the beginning inventory this period.
When all the material is added at the start of the process it doesn't matter when the units were started or
where they are, they all contain 100% material even if they are spoiled.

Blooms: Apply
Gradable: automatic

65. Parkway Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the
Work-in-Process Inventory on July 1 had materials assigned to them of $32,000, even though they were
only 5% complete as to materials. No additional units were started during July, and there were no
unfinished units on hand on July 31. What is the material cost per unit for July, assuming Parkway uses
weighted-average process costing?

A. $10.50.
B. $11.59.
C. $13.17.
D. $15.49.
($126,000 + 32,000)/12,000 = $13.17

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-116
66. Cranford Company completed and transferred out 2,300 units in May 2016. There were 200 units in the
Work-in-Process Inventory on May 31, 2016, 30% complete as to conversion costs and 100% complete
as to materials. The month's charges for conversion costs and material costs were $9,440 and $6,250,
respectively. There was no beginning inventory on May 1, 2016. What is the cost of the work
transferred-out during May?

A. $8,510.
B. $14,950.
C. $15,690.
D. $16,250.
Started and completed units = 2,300; EUP (mat'l) = 2,300 + 200 = 2,500; EUP (conversion costs) =
2,300 + 60 = 2,360; Unit cost (mat'l) = $6,250/2,500 = $2.50; EUP (CC) = $9,440/2,360 = $4.00; 2,300
($2.50 + 4.00) = $14,950

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

67. A form prepared periodically for each processing department summarizing (1) the units for which the
department is accountable and the disposition of these units and (2) the costs charged to the department
and the allocation of these costs is called a:

A. schedule of Cost of Goods Manufactured.

B. production cost report.
C. job order cost sheet.
D. schedule of Cost of Goods Sold.
This is the description of a production cost report. A job order cost sheet is used in job costing and
contains mostly tracing rather than allocation.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 08-04 Prepare and analyze a production cost report.
Topic: Reporting This Information to Managers: The Product Cost Report

8-117
68. The FIFO method provides a major advantage over the weighted-average method in that:

A. the calculation of equivalent units is less complex under the FIFO method.
B. the FIFO method treats units in the beginning inventory as if they were started and completed
during the current period.
C. the FIFO method provides measurements of work done during the current period.
D. the weighted-average method ignores units in the beginning and ending work-in-process
inventories.
FIFO ignores beginning inventory and focuses on the production of the current period.

Blooms: Understand
Gradable: automatic

69. The computation of equivalent units under the FIFO method:

A. treats units in the beginning work-in-process inventory as if they were started and completed during
the current period.
B. treats units in the beginning work-in-process inventory as if they represent a batch of goods separate
and distinct from goods started and completed during the current period.
C. treats units in the ending work-in-process inventory as if they were started and completed during the
current period.
D. ignores units in the beginning and ending work-in-process inventories.
Under FIFO, beginning units form a separate pool from the current month's production.

Blooms: Understand
Gradable: automatic

8-118
70. Tori Company uses the FIFO method in its process costing system. The first processing department, the
Soldering Department, started the month with 17,000 units in its beginning work-in-process inventory
that were 70% complete with respect to conversion costs. The conversion cost in this beginning work-
in-process inventory was $101,150. An additional 68,000 units were started into production during the
month. There were 23,000 units in the ending work-in-process inventory of the Soldering Department
that were 80% complete with respect to conversion costs. A total of $565,125 in conversion costs were
incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs? (Round off to three decimal places.)

A. $8.500.
B. $8.311.
C. $8.250.
D. $7.839.
Quantity Schedule
Units to be accounted for:
Work-in-process beginning 17,000
Started into production 68,000
Total units to be accounted for 85,000
Conversion
To complete beginning work-in-process:
Conversion 17,000 units × 30% 5,100
Units started and completed 45,000
Equivalent units of production 68,500
Conversion cost for EUP: $565,125 ÷ 68,500 = $8.250

Blooms: Apply
Gradable: automatic

8-119
71. Sarfina Corporation uses the FIFO method in its process costing system. Operating data for the Casting
Department for the month of September appear below:
Percent Complete with Respect

Units to Conversion
Beginning work-in-process inventory 15,000 20%
Transferred in from the prior department during
89,000
September
Ending work-in-process inventory 24,000 90%
$15,660 at the beginning of September. Additional conversion costs of $526,524 were incurred in the
What would be the cost per equivalent unit for conversion costs for September? (Round off to three
decimal places.)

A. $5.916.
B. $5.340.
C. $5.220.
D. $5.213.
Quantity

Schedule
Work-in-process beginning 15,000
Transferred in from the prior
89,000
department
Conversion
Conversion
Cost added during the period $526,524
Cost per equivalent unit (a) ÷ (b) $5.34
8-120

Blooms: Apply
Gradable: automatic

8-121
8-122

Units in beginning work-in-process
600
inventory
Percent complete with respect to
10%
conversion
Units started into production during the
7,000
month
10%
conversion
answer that is the closest to the answer you computed. To reduce rounding error, carry out all
computations to at least three decimal places.
How many units were started AND completed during the month in the first processing department?

A. 6,100.
B. 5,500.
C. 7,600.
D. 7,000.
Quantity

Schedule
Work-in-process beginning 600
Complete beginning work-in-
600
process
Ending work-in-process 1,500
8-123
Total units accounted for 7,600

Blooms: Apply
Gradable: automatic

8-124
8-125

600
inventory
10%
conversion
7,000
month
10%
conversion

A. $42.49.
B. $43.96.
C. $45.00.
D. $41.87.
Conversion
To complete beginning

work-in-process:
Conversion 600 units ×
540
90%
Conversion 1,500 units ×
150
10%
Equivalent units of 6,190
8-126
production
Conversion
Cost per equivalent unit $41.87

Blooms: Apply
Gradable: automatic

8-127
8-128

900
inventory
25%
conversion
7,300
month
Units transferred to the next department
6,100
during the month
35%
conversion
What are the equivalent units for materials for the month in the first processing department?

A. 1,680.
B. 7,150.
C. 8,200.
D. 5,200.
Quantity Schedule
Work-in-process beginning 900
Material
8-129
Material 900 units × 30% 270
Material 2,100 units × 80% 1,680

Blooms: Apply
Gradable: automatic

8-130
8-131

900
inventory
25%
conversion
7,300
month
Units transferred to the next department
6,100
during the month
35%
conversion

A. $40.57.
B. $45.33.
C. $39.31.
D. $37.44.
Conversion
Conversion 900 units × 75% 675
Conversion 2,100 units × 35% 735
8-132
Conversion
Cost per equivalent unit $37.44

Blooms: Apply
Gradable: automatic

76. Which of the following statements regarding first-in, first-out (FIFO) process costing is(are) true?
(A) First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before
(B) First-in, first-out process costing requires one additional step in assigning costs to the units
transferred out and the ending Work-in-Process Inventory.

A. Only A is true.

B. Only B is true.
Transferring beginning units in inventory (physically and value-wise) is a basic tenant of the FIFO
concept.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-133
77. In order to compute equivalent units of production using the FIFO method of process costing, work for
the period must be broken down to units:

A. completed during the period and units in ending inventory.

B. started during the period and units transferred out during the period.
C. completed from beginning inventory, started and completed during the month, and units in ending
inventory.
D. processed during the period and units completed during the period.
In theory the physical flow dictates the cost flow: (1) complete the units in beginning inventory, (2) start
and complete new units, and (3) start, but don't complete the balance of new units.

Blooms: Remember
Gradable: automatic

78. The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory
which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were
received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units
which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing
Department uses first-in, first-out (FIFO) process costing.
How many units were transferred-out during the period?

A. 12,000.
B. 13,000.
C. 18,000.
D. 20,000.
5,000 + 15,000 - 2,000 = 18,000

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-134
How many units were started and completed during the period?

A. 12,000.
B. 13,000.
C. 18,000.
D. 20,000.
15,000 - 2,000 = 13,000

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

What are the equivalent units of production for materials during the period?

A. 12,000.
B. 13,000.
C. 14,000.
D. 15,000.
Beginning inventory (0) + started and completed (13,000) + ending inventory .50(2,000) = 14,000

Blooms: Apply
Gradable: automatic

8-135
What are the equivalent units of production for the conversion costs during the period?

A. 14,500.
B. 15,100.
C. 16,500.
D. 17,100.
5,000(.70) + 13,000 + 2,000(.30) = 17,100

Blooms: Apply
Gradable: automatic

82. In computing the current period's manufacturing cost per equivalent unit, the FIFO method of process
costing considers: (CPA adapted)

A. only current period costs.

B. current period costs plus cost of beginning work-in-process inventory.
C. current period costs less cost of beginning work-in-process inventory.
D. current period costs plus the cost of ending work-in-process inventory.
FIFO includes only the current period costs. Beginning WIP is segregated.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-136
83. The debits to Work-in-Process for Department #2 for the month of April of the current year, together
with information concerning production, are presented below. All direct materials come from
Department #1. The units completed include the 1,200 in process at the beginning of the period.
Department #2 uses FIFO costing.
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
What are the total costs to be accounted for on the production cost report for Department #2 for the
period?

A. $16,400.
B. $17,600.
C. $11,600.
D. $12,660.
$1,200 + 3,600 + 8,000 + 4,800 = $17,600

Blooms: Apply
Difficulty: 1 Easy
Gradable: automatic

8-137
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
What are the equivalent units of production for conversion costs?

A. 500.
B. 5,500.
C. 5,900.
D. 6,400.
1,200(.75) + 5,000 + 1,000(.50) = 6,400

Blooms: Apply
Gradable: automatic

8-138
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The conversion costs per equivalent unit is:

A. $1.00.
B. $1.50.
C. $2.00.
D. $2.55.
($8,000 + 4,800)/6,400 = $2.00

Blooms: Apply
Gradable: automatic

8-139
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The unit cost of Product X started in the prior period and completed in the current period is:

A. $2.00.
B. $3.60.
C. $2.55.
D. $3.45.
($1,200 ÷ 1,200 = $1.00) + ($3,600 ÷ 6,000 = $.60) + ($12,800 ÷ 6,400 EU = $2.00) = $3.60

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

8-140
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The unit cost of Product X started and completed in the current period is:

A. $2.00.
B. $2.50.
C. $2.55.
D. $2.60.
($3,600/6,000) + $2.00 = $2.60

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

8-141
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The cost of goods transferred to finished goods is:

A. $17,660.
B. $16,000.
C. $13,000.
D. $12,800.
[$1,200 + 900(2.00)] + [5,000 × ($2.60)] = $16,000

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

8-142
$1,200 ????
completed units
From Dept. 1, 6,000
3,600
units
Direct Labor 8,000
Factory OH 4,800
1,000 units, ½
????
complete
The cost of the ending Work-in-Process Inventory is:

A. $2,600.
B. $1,600.
C. $600.
D. $1,000.
1,000($.60) + 500($2.00) = $1,600

Blooms: Apply
Gradable: automatic

90. In a production cost report using process costing, transferred-in costs are most similar to:

A. material added at the beginning of the process.

B. conversion costs added during the process.
C. costs transferred-out to the next process.
D. costs included in beginning inventory.
Transferred-in costs are similar to material added at the start of the process; all costs of the transferred-
in units are there at the start.

Blooms: Remember
8-143
Gradable: automatic

91. A process costing system was used for a department that began operations in January 2016.
Approximately the same number of physical units, at the same degree of completion, were in work-in-
process at the end of both January and February. Monthly conversion costs are allocated between
ending work-in-process and units completed. Compared to the FIFO method, would the weighted-
average method use the same or a greater number of equivalent units to calculate the monthly
allocations? (CPA adapted)
Equivalent Units for Weighted Average compared to

FIFO
January February
A. Same Same
B. Greater Same
C. Greater Greater
D. Same Greater

A. Option A
B. Option B
C. Option C
D. Option D
January would be the same since there is no beginning WIP; Weighted-average would be greater in
February since the work already in the Feb 1 inventory is included in the equivalent units (but excluded
for FIFO).

Blooms: Analyze
Gradable: automatic

8-144
92. Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the
mining industry. The following information pertains to operations for November. (CMA Exam adapted)
Units
st
The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs.
The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.
Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead,
$15,240.
overhead, $391,160.
What is the equivalent unit cost for materials assuming Bentley uses first-in, first-out (FIFO) process
costing?

A. $4.12.
B. $4.50.
C. $4.60.
D. $4.80.
$468,000/[(16,000 × .40) + 76,000 + (24,000 × .90)] = $4.50

Blooms: Apply
Gradable: automatic

8-145
Units
st
$15,240.
overhead, $391,160.
What is the equivalent unit cost for the conversion costs assuming Bentley uses first-in, first-out (FIFO)
process costing?

A. $5.65.
B. $5.83.
C. $6.00.
D. $6.20.
($182,880 + 391,160)/[(16,000 × .80) + 76,000 + (24,000 × .40)] = $5.83

Blooms: Apply
Gradable: automatic

8-146
Units
st
$15,240.
overhead, $391,160.
What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses first-in, first-
out (FIFO) process costing?

A. $153,168.
B. $154,800.
C. $155,328.
D. $156,960.
[21,600 ($4.50)] + [9,600 ($5.83)] = $153,168

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

8-147
Units
st
$15,240.
overhead, $391,160.
What is the equivalent unit cost for materials assuming Bentley uses weighted-average process costing?
A. $4.12.
B. $4.50.
C. $4.60.
D. $4.80.
($54,560 + 468,000)/[92,000 + (24,000 × .90)] = $4.60

Blooms: Apply
Gradable: automatic

8-148
Units
st
$15,240.
overhead, $391,160.
What is the equivalent unit cost for the conversion costs assuming Bentley uses weighted-average
process costing?

A. $5.65.
B. $5.83.
C. $6.00.
D. $6.20.
($20,320 + 15,240 + 182,880 + 391,160)/[92,000 + (24,000 × .40)] = $6.00

Blooms: Apply
Gradable: automatic

8-149

Units
$15,240.
overhead, $391,160.
What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses weighted-
average process costing?

A. $86,400.
B. $153,960.
C. $154,800.
D. $156,960.
[21,600 ($4.60)] + [9,600 ($6.00)] = $156,960

Blooms: Apply
Difficulty: 3 Hard
Gradable: automatic

98. A process costing system:

A. uses a separate Work-in-process account for each processing department.

B. uses a single Work-in-process account for the entire company.
C. uses a separate Work-in-process account for each type of product produced.
D. does not use a Work-in-process account in any form.
Separate production (WIP) departments is a basic tenant of process costing (e.g., department production
report).

8-150
Blooms: Understand
Gradable: automatic

99. Additional materials are added in the second department of a four-department production process.
However, this addition does not increase the number of units being produced in the second department,
but will:

A. increase the equivalent units of production.

B. increase the total cost per unit.
C. decrease the value of the transferred-in costs.
D. decrease the total costs to account for.
Absolute units will remain the same, or shrink, due to spoilage, but the total cost per unit will increase.

Blooms: Remember
Gradable: automatic

100. Under which of the following conditions will the FIFO method produce the same cost of goods
manufactured as the weighted-average method?

A. There is no ending inventory.

B. There is no beginning inventory.
C. The beginning and ending inventories are equal.
D. The beginning and ending inventories are both 50% complete.
Weighted-average and FIFO are the same when there is no beginning WIP.

Blooms: Apply
Gradable: automatic

8-151
101. Which of the following statements is(are) true?
I. For cost control, the FIFO method of process costing is better than the weighted-average method.
II. The weighted-average method of process costing assigns more cost to units completed (transferred
out) than the FIFO method.

A. Only I is true.

B. Only II is true.
C. Both I and II are true.
D. Neither I nor II is true.
I is true; II may be true in certain circumstances, but not in every situation.

Blooms: Analyze
Difficulty: 1 Easy
Gradable: automatic

102. Which of the following statements is(are) false?
(A) Operations costing accounts for material costs like job costing and conversion costs like process
costing.
(B) An automobile manufacturer is more likely to use an operations costing system than a process
costing system.

A. Only A is false.

B. Only B is false.
C. Both A and B are false.
D. Neither A nor B is false.
Both of these statements are true.

Blooms: Apply
Gradable: automatic

8-152
103. Operations costing systems are used when the products have:

A. used a standardized method that is repeatedly performed.

B. common characteristics and no individual characteristics.
C. individual characteristics and no common characteristics.
D. some common characteristics and some individual characteristics.
There must be some individual characteristics and some common characteristics.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

104. An operations costing system is:

A. identical to a process costing system except that actual cost is used for manufacturing overhead.
B. the same as a process costing system except that materials are allocated on the basis of batches of
production.
C. the same as a job order costing system except that materials are accounted for in the same way as
they are in a process costing system.
D. the same as a job order costing system except that no overhead allocations are made since actual
costs are used throughout.
This statement is a description of operations costing.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

8-153
105. Predetermined manufacturing overhead rates can be used in all of the following costing systems except:

A. job costing.

B. process costing.
C. operations costing.
D. actual costing.
Actual costing would not use a predetermined overhead rate.

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Topic: Comparing Job, Process, and Operation Costing

Essay Questions

106. Cordon Processing uses a process costing system to account for its solvent plant. Beginning inventory
consisted of 14,000 gallons (80% complete as to material, 55% complete as to labor). Cordon added
213,000 gallons into the process during April. On April 30th there were 18,000 gallons still in process
(60% complete as to material, 45% complete as to labor).
Required:
(a) Calculate the equivalent units of production for each input, assuming Cordon uses weighted-average.
(b) Calculate the equivalent units of production for each input, assuming Cordon uses FIFO.

(a) Mat: 219,800; Conv: 217,100

(b) Mat: 208,600; Conv: 209,400
Feedback: Transferred out: 14,000 + 213,000 - 18,000 = 209,000; started & completed: 213,000 -
18,000 = 195,000
(a) EUP Mat: 209,000 + (60% × 18,000) = 219,800
EUP Conv: 209,000 + (45% × 18,000) = 217,100
(b) Mat: (20% × 14,000) + 195,000 + (60% × 18,000) = 208,600
Conv: (45% × 14,000) + 195,000 + (45% × 18,000) = 209,400

8-154
Blooms: Apply
Gradable: manual

107. Ralston Fine Hardwoods uses a process costing system to account for its wood processing plant.
Beginning inventory consisted of 4,000 board feet of lumber (100% complete as to material, 35%
complete as to labor). Ralston added 132,000 board feet into the process during April. On April 30th
there were 10,000 board feet still in process (100% complete as to material, 22% complete as to labor).
Required:
(a) Calculate the equivalent units of production for each input, assuming Ralston uses weighted-average.
(b) Calculate the equivalent units of production for each input, assuming Ralston uses FIFO.

(a) Mat: 136,000; Conv: 128,200

(b) Mat: 132,000; Conv: 126,800
Feedback: Transferred out: 4,000 + 132,000 - 10,000 = 126,000; started & completed: 132,000 - 10,000
= 122,000
(a) EUP Mat: 126,000 + (100% × 10,000) = 136,000
EUP Conv: 126,000 + (22% × 10,000) = 128,200
(b) Mat: (0% × 4,000) + 122,000 + (100% × 10,000) = 132,000
Conv: (65% × 4,000) + 122,000 + (22% × 10,000) = 126,800

Blooms: Apply
Gradable: manual

8-155
108. Manning Corporation uses the weighted-average method in its process costing. The following data
pertain to its Processing Department for September.
Percent Complete
Material
Units Conversion
s
Work-in-process,
700 65% 45%
September 1
Units started into
September
September and
7,300
transferred to the next
department
Work-in-process,
1,700 90% 40%
September 30
Required:
Compute the equivalent units of production for both materials and conversion costs for the Processing
Department for September using the weighted-average method.

Weighted-average method:
Material
Conversion
s
Units transferred to the next
7,300 7,300
department
Work-in-process, September

30:
1,700 units × 90% 1,530
1,700 units × 40% 680

Blooms: Apply
Difficulty: 1 Easy
Gradable: manual

8-156
109. The following data have been provided by Florrisant Corporation, which uses the weighted-average
method in its process costing. The data are for the company's Assembly Department for October.
Percent Complete
Material
Units Conversion
s
Work-in-process,
900 55% 50%
October 1
Units started into
October
October and transferred
7,100
Work-in-process,
2,000 85% 35%
October 31
Required:
Compute the equivalent units of production for both materials and conversion costs for the Assembly
Department for October using the weighted-average method.

Material
Conversion
s
Units transferred to the next
7,100 7,100
department
Work-in-process, October 31:
2,000 units × 85% 1,700
2,000 units × 35% 700

Blooms: Apply
Difficulty: 1 Easy
Gradable: manual

8-157
110. Markov Inc. uses the weighted-average method in its process costing system. The following data
concern the operations of the company's first processing department, Sculpting, for a recent month.
Required:
Using the weighted-average method, determine the equivalent units of production for materials and
conversion costs.

Material
Conversion
s
Materials: 500 units × 80% 400
Conversion: 500 × 10% units 50

Blooms: Apply
Difficulty: 1 Easy
Gradable: manual

8-158
111. Roubideaux Corporation uses process costing. The following data pertain to its Packing Department for
February.

500
Units started into production during February 6,900
6,200
department
1,200
Required:
Determine the equivalent units of production for the Packing Department for February using the

Material
Conversion
s
Materials: 1,200 units × 50% 600
Conversion: 1,200 units ×
240
20%

Blooms: Apply
Difficulty: 1 Easy
Gradable: manual

8-159
112. Highlite Corporation uses the weighted-average method in its process costing. The following data
pertain to its Formulation Department for November.

700
Units started into production during November 5,500
4,700
department
1,500
Required:
Determine the equivalent units of production for the Formulation Department for November using the

Material
Conversion
s
Materials: 1,500 units × 70% 1,050
375
25%

Blooms: Apply
Difficulty: 1 Easy
Gradable: manual

8-160
consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of
$124,800 materials and $104,500 conversion. 58,000 units were started into production during the
month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of
6,000 chairs was 100% complete as to materials and 40% complete as to labor. Everglades uses
weighted-average costing.
Required:


(a) EUP Mat: 63,000; Conv: 59,400

(b) Mat: $26.3778; Conv: $37.5231; Total $63.9009
(c) $3,642,351
(d) $248,322
Feedback: transferred out: 5,000 + 58,000 - 6,000 = 57,000
(a) Mat EUP: 57,000 + (100% × 6,000) = 63,000

Conv EUP: 57,000 + (40% × 6,000) = 59,400
(b) Mat: ($124,800 + 1,537,000)/63,000 = $26.3778
Conv: ($104,500 + 2,124,375)/59,400 = $37.5231
(c) Transferred out: 57,000 × ($26.3778 + $37.5231) = $3,642,351
(d) EWIP:
Mat: 6,000 × $26.3778 = 158,267

Conv: 2,400 × $37.5231 = 90,055
Total EWIP $248,322

Blooms: Apply
Gradable: manual

8-161
114. Toxo Chemicals produces a solvent in its Glendale plant. Three chemicals are combined at the start of
the process and blended under pressure for a period of time. At the 75% point of completion, an
additional chemical is added. The following information has been gathered:
Chemical Additional Conversion

Gallons
Mix Chemical Cost
BWIP $5,000 -0- $3,000 10,000
Added 65,000 15,000 35,000 100,000
WIP was at the 30% completion point, the ending WIP is at 70%. Toxo uses weighted-average costing.
Required:


(a) Mix: 110,000; Added Chem: 98,000; Conversion: 106,400

(b) Mix: $0.6363; Added Chem: $0.1531; Conversion: $0.3571
(c) $112,357
(d) $10,635
Feedback: (a) Chem Mix: (100% × 98,000) + (100% × 12,000) = 110,000

Added Chemical: (100% × 98,000) + (0% × 12,000) = 98,000
Conversion: (100% × 98,000) + (70% × 12,000) = 106,400
(b) Chem Mix: ($5,000 + 65,000)/110,000 = $0.6363
Added Chemical: $15,000/98,000 = $0.1531
Conversion: ($3,000 + 35,000)/106,400 = $0.3571
(c) 98,000 × $1.1465 = $112,357
(d) (12,000 × $0.6363) + (8,400 × $0.3571) = $10,635

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-162
8-163

$20,000
month
manufacturing labor. Ending WIP was 60 percent complete. Tracker Sports uses weighted-average
costing.
Required:


(a) EUP TI: 60,000; Mat: 60,000; Conv: 56,000

(b) TI: $2.50; Mat: $1.20; Conv: $0.6214; Total $4.3214
(c) $216,070
(d) $40,728
Feedback: Overhead applied = 50% × $20,000 = $10,000
(a) TI EUP: 50,000 + (100% × 10,000) = 60,000

Mat EUP: 50,000 + (100% × 10,000) = 60,000
Conv EUP: 50,000 + (60% × 10,000) = 56,000
(b) TI: ($50,000 + 100,000)/60,000 = $2.5000
Mat: ($12,000 + 60,000)/60,000 = $1.2000
Conv: ($3,200 + 1,600 + 20,000 + 10,000)/56,000 = $0.6214
(c) Transferred out: 50,000 × ($2.5000 + 1.2000 + 0.6214) = $216,070
8-164
(d) EWIP:
Trans-in: 10,000 × $2.50 = $25,000

Mat: 10,000 × $1.20 = 12,000
Conv: 6,000 × $0.6214 = 3,728
Total EWIP $40,728
Total EWIP $40,728

Blooms: Apply
Gradable: manual

8-165
department, with conversion costs being incurred uniformly in each department. The Work-in-Process
T-account for the cracking department for July is:

The beginning balance inventory consists of $43,400 in materials cost. Malcom uses the weighted-
average method to account for its operations.

(a) $84,000
(b) $567,000
Feedback: Transferred-out = 35,000 + 280,000 - 45,000 = 270,000

EUP: Mat: 270,000 + (100% × 45,000) = 315,000; Conv: 270,000 + (2/3 × 45,000) = 300,000
Unit costs:
Mat: ($43,400 + 397,600)/315,000 = $1.40
Conv: [($63,700 - 43,400) + 189,700]/300,000 = $0.70
(a) EWIP: Mat 45,000 × 1.40 + Conv 30,000 × $0.70 = $84,000

(b) 270,000 × ($1.40 + $0.70) = $567,000

Blooms: Apply
Gradable: manual

8-166
8-167
sports trainers. The oil is produced in three processes: Refining, Blending, and Mixing. Raw oil
materials are introduced at the beginning of the refining process. A "mountain-air scent" material is
added in the blending process when processing is 50% completed.
The July 1 Work-in-Process inventory contains $5,920 in material costs, and $1.56/unit in costs
Costs transferred in from Refining (29,000
48,200
gal.)
Materials 20,810
Direct labor 5,748
Overhead 11,600
Ending balance (4,000 gal, 40% complete)

(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)

(a) Trans-in EUP: 37,000; Mat EUP: 33,000; Conv EUP: 34,600
(b) Trans-in: $1.64; Mat: $0.81; Conv: $0.63
(c) $101,640
(d) $7,568
Feedback: Transferred out: 8,000 + 29,000 - 4,000 = 33,000

(a) Trans-in EUP: (100% × 33,000) + (100% × 4,000) = 37,000
Mat EUP: (100% × 33,000) + (0% × 4,000) = 33,000
Conv EUP: (100% × 33,000) + (40% × 4,000) = 34,600
(b) Trans-in: [($1.56 × 8,000) + 48,200]/37,000 = $1.64
Mat: ($5,920 + 20,810)/33,000 = $0.81
Conv: [($22,850 - 5,920 - 12,480) + 5,748 + 11,600]/34,600 = $0.63
(c) 33,000 × ($1.64 + .81 + .63) = $101,640
(d) EWIP:
Trans-in: (4,000 × $1.64) $6,560

Mat: -0-
8-168
Conv: (1,600 × $0.63) 1,008 $7,568

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-169
Direct labor 14,500
Overhead 21,750

(a) Mat EUP: 35,000; Conv EUP: 33,000

(b) Mat: $0.3943; Conv: $1.25
(c) $47,685
(d) $7,366
Feedback: Transferred out: 5,000 + 30,000 - 6,000 = 29,000
(a) Mat EUP = (100% × 29,000) + (100% × 6,000) = 35,000

Conv EUP: (100% × 29,000) + (2/3 × 6,000) = 33,000
(b) Mat: ($1,500 + 12,300)/35,000 = $0.3943; Conv: [($6,500 - 1,500) + $14,500 + 21,750]/33,000 =
$1.25
(c) 29,000 × ($0.3943 + 1.25) = $47,685
(d) Ending WIP
Mat: (6,000 × .3943) 2,366

Conv: (4,000 × 1.25) 5,000 7,366

Blooms: Apply
8-170
Gradable: manual

119. The Rosa Lee Manufacturing Company produces a single product in a single processing department.
The material is added when 25% of the conversion costs have been added.
Beginning balance $1,682 ($600 is materials)

Material 5,325
Labor 10,863
Overhead 15,012
Inventory. 9,000 units were in process at the beginning of the month and were 40% complete. 8,000
units were in process at the end of the month, and were 70% complete. The company uses weighted-
average process costing.

(a) Mat: 80,000; Conversion: 77,600

(b) Mat: $0.0741; Conversion: $0.3474
(c) $30,348
(d) $2,538
Feedback: (a) EUP Materials: 72,000 + (100% × 8,000) = 80,000

EUP Conversion: 72,000 + (70% × 8,000) = 77,600
(b) Materials: ($600 + 5,325)/80,000 = $0.0741; Conversion: ($1,082 + 10,863 + 15,012)/77,600 =
$0.3474
(c) Transferred out: 72,000 × ($0.0741 + 0.3474) = $30,348
(d)
Materials: 8,000 × $0.0741 = $593
1,945
Conversion: 5,600 × $0.3474 =
Ending WIP = $2,538

Blooms: Apply
8-171
Gradable: manual

120. Pattern Corporation uses the FIFO method in its process costing. The following data pertain to its
Cutting Department for August.
Percent Complete
Material
Units Conversion
s
Work-in-process,
500 50% 45%
August 1
Units started into
August
August and transferred 7,200
Work-in-process,
1,400 75% 30%
August 31
Required:
Compute the equivalent units of production for both materials and conversion costs for the Cutting
Department for August using the FIFO method.

FIFO method:
Material
Conversion
s
Work-in-process, August 1:
500 units × (100% - 50%) 250
500 units × (100% - 45%) 275
Units started and completed in
6,700 6,700
August
1,400 units × 75% 1,050
1,400 units × 30% 420

Blooms: Apply
Gradable: manual
8-172

121. The following data pertain to the Grinding Department of Dancer Corporation for July. The company
uses the FIFO method in its process costing.
Percent Complete
Material
Units Conversion
s
Work-in-process, July 1 900 60% 25%
Units started into
6,700
production during July
July and transferred to 5,700
the next department
Work-in-process, July
1,900 70% 30%
31
Required:
Compute the equivalent units of production for both materials and conversion costs for the Grinding
Department for July using the FIFO method.

FIFO method:
Material
Conversion
s
Work-in-process, July 1:
900 units × (100% - 60%) 360
900 units × (100% - 25%) 675
Units started and completed in
4,800 4,800
July
Work-in-process, July 31:
1,900 units × 70% 1,330
1,900 units × 30% 570

Blooms: Apply
Gradable: manual

8-173
122. Mobility, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Shaping - for a recent month.
Required:
Using the FIFO method, determine the equivalent units of production for materials and conversion
costs.

FIFO method:
Material
Conversion
s
To complete the beginning

work-in-process:
Materials: 500 units × (100% -
150
70%)
Conversion: 500 units × (100%
300
- 40%)
Units started and completed
27,900 27,900
(28,000 - 100)
Ending work-in-process:
Conversion: 100 units × 30% 30

Blooms: Apply
Gradable: manual

8-174
123. Galaxy Corporation uses the FIFO method in its process costing. The following data pertain to its
Assembly Department for June.

800
Units started into production during June 5,200
4,300
department
Units in process, June 30: materials 50%
1,700
Required:
Determine the equivalent units of production for the Assembly Department for June using the FIFO
method.

FIFO method:
Material
Conversion
s

work-in-process:
Materials: 800 units × (100%
360
- 55%)
Conversion: 800 units ×
680
(100% - 15%)
Units started and completed
3,500 3,500
(4,300 - 800)
Materials: 1,700 units × 50% 850
680
40%

Blooms: Apply
Gradable: manual

8-175
124. The following data have been provided by Brice Corporation for the 3-D Printing Department. The
company uses the FIFO method in its process costing.

900
Units started into production during August 8,400
Units started and completed during August 6,500
7,400
department during August
1,900
Required:
Determine the equivalent units of production for the 3-D Printing Department for August using the
FIFO method.

FIFO method:
Material
Conversion
s

work-in-process:
Materials: 900 units × (100%
360
- 60%)
630
(100% - 30%)
Units started and completed 6,500 6,500
Materials: 1,900 units × 65% 1,235
475
25%

Blooms: Apply
Gradable: manual

8-176
125. The Microprocessor Manufacturing Company produces a single product in a single processing
department. The material is added when 25% of the conversion costs have been added.
Beginning balance $1,382

Material 5,325
Labor 10,863
Overhead 15,012
Inventory. 9,000 units were in process at the beginning of the month, which were 40% complete. 8,000
units were in process at the end of the month, which were 70% complete. The company uses first-in,
first-out (FIFO) process costing.

(a) Mat: 71,000; Conversion: 74,000

(b) Mat: $0.075; Conversion: $0.3497
(c) $30,026
(d) $2,558
Feedback: (a) EUP Materials: BWIP (0% × 9,000) + (100% × 63,000) + (100% × 8,000) = 71,000
EUP Conversion: BWIP (60% × 9,000) + (100% × 63,000) + (70% × 8,000) = 74,000
(b) Materials: $5,325/71,000 = $0.075; Conversion: ($10,863 + 15,012)/74,000 = $0.3497
(c) Beginning Inventory $1,382

to complete: 5,400 × .3497 = 1,888 $3,270
Start & complete: 63,000 × .4297 = 26,756
Total transferred out $30,026
(d) Materials: 8,000 × .075 $600
Conversion: 5,600 × .3497 1,958
Ending WIP $2,558

Blooms: Apply
Gradable: manual
8-177

8-178
8-179
Direct labor 14,500
Overhead 21,750
The July 1 Work-in-Process inventory contains $5,920 in material costs, and $1.56/unit in costs
Costs transferred in from Refining ???
Materials 20,810
Direct labor (725 hours) 5,748
Overhead 11,600
Ending balance (4,000 gal., 40% complete)
The Safety Chemical Company uses first-in, first-out (FIFO) costing for the Refining Department and
weighted-average costing for the Blending Department.
Part 1: Refining Department
(a) Compute the equivalent units of production for July.

Part 2: Blending Department
(e) Compute the equivalent units of production.

(f) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)
(g) Compute the costs transferred out for July.
(h) Compute the July 31 Work-in-Process Inventory balance.

8-180
(a) Mat EUP: 30,000; Conv EUP: 29,000
(b) Mat: $0.41; Conv: $1.25
(c) $47,590
(d) $7,460
(e) Trans-in EUP: 37,000; Mat EUP: 33,000; Conv EUP: 34,600
(f) Trans-in: $1.6235; Mat: $0.81; Conv: $0.63
(g) $101,096
(h) $7,502
Feedback: Refining started & completed: 30,000 - 6,000 = 24,000; transferred out: 5,000 + 30,000 -
6,000 = 29,000; Blending transferred out: 8,000 + 29,000 - 4,000 = 33,000
(a) Mat EUP = (0% × 5,000) + (100% × 24,000) + (100% × 6,000) = 30,000
Conv EUP: (20% × 5,000) + (100% × 24,000) + (2/3 × 6,000) = 29,000
(b) Mat: $12,300/30,000 = $0.41; Conv: ($14,500+ 21,750)/29,000 = $1.25
(c) Beginning WIP $6,500

Conversion cost to complete
1,250 $7,750
(1,000 × $1.25)
Started & completed 24,000
39,840
× ($0.41 + 1.25)
(d) Ending WIP
Mat (6,000 × .41) 2,460
Conv: (4,000 × 1.25) 5,000 7,460
(e) Trans-in EUP: (100% × 33,000) + (100% × 4,000) = 37,000

Mat EUP: (100% × 33,000) + (0% × 4,000) = 33,000
Conv EUP: (100% × 33,000) + (40% × 4,000) = 34,600
(f) Trans-in: [($1.56 × 8,000) + 47,590]/37,000 = $1.6235
Mat: ($5,920 + 20,810)/33,000 = $0.81
Conv: [($22,850 - 5,920 - 12,480) + 5,748 + 11,600]/34,600 = $0.63
(g) 33,000 × ($1.6235 + .81 + .63) = $101,096
(h) EWIP:
Trans-in: (4,000 × $1.6235) $6,494

Mat: -0-
Conv: (1,600 × $0.63) 1,008 $7,502

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual
8-181

8-182
8-183
Beginning balance (5,000 gallons, 80%
$7,500
complete)
Materials (30,000 gallons) 12,300
Direct Labor 14,500
Overhead 21,750
Ending balance (6,000 gallons, 2/3 complete)

(a) Mat EUP: 30,000; Conv EUP: 29,000

(b) Mat: $0.41; Conv: $1.25
(c) $48,590
(d) $7,460
Feedback: Started & completed: 30,000 - 6,000 = 24,000; transferred out: 5,000 + 30,000 - 6,000 =
29,000
(a) Mat EUP = (0% × 5,000) + (100% × 24,000) + (100% × 6,000) = 30,000
Conv EUP: (20% × 5,000) + (100% × 24,000) + (2/3 × 6,000) = 29,000
(b) Mat: $12,300/30,000 = $0.41; Conv: ($14,500 + 21,750)/29,000 = $1.25

Conversion cost to complete
1,250 $8,750
(1,000 × $1.25)
Started & completed 24,000
39,840
× ($0.41 + 1.25)
(d) Ending WIP
8-184
Mat (6,000 × .41) 2,460
Conv: (4,000 × 1.25) 5,000 7,460

Blooms: Apply
Gradable: manual

8-185
8-186
The July 1 Work-in-Process inventory contains $10,370 in conversion costs, and $1.56/unit in costs
Work-in-Process:

Blending
Beginning balance (8,000
$22,850
gal, 30% complete)
Costs transferred in from
48,200
Refining (29,000 gal.)
Materials 20,810
Direct labor 5,748
Overhead 11,600
Ending balance (4,000 gal.,

40% complete)

(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three.)

(a) Trans-in EUP: 29,000; Mat EUP: 33,000; Conv EUP: 32,200
(b) Trans-in: $1.6621; Mat: $0.6306; Conv: $0.5388
(c) $101,700
(d) $7,510
Feedback: Blending started & completed: 29,000 - 4,000 = 25,000; transferred out: 8,000 + 29,000 -
4,000 = 33,000
(a) Tran-in EUP = (0% × 8,000) + (100% × 25,000) + (100% × 4,000) = 29,000
Mat EUP = (100% × 8,000) + (100% × 25,000) + (0% × 4,000) = 33,000
Conv EUP: (70% × 8,000) + (100% × 25,000) + (40% × 4,000) = 32,200
(b) Trans-in: $48,200/29,000 = $1.6621; Mat: $20,810/33,000 = $0.6306; Conv: ($5,748 +
11,600)/32,200 = $0.5388
8-187
Materials to complete
5,045
(8,000 × $0.6306)
Conversion cost to
complete (5,600 × 3,017 $30,912
$0.5388)
Started & completed
25,000 × ($1.6621 + 70,788
0.6306 + 0.5388)
(d) Ending WIP
Trans-in (4,000 ×
$6,648
$1.6621)
Conv: (1,600 × 0.5388) 862 7,510

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-188
8-189

$20,000
month
manufacturing labor. Ending WIP was 60 percent complete. Tracker Sports uses first-in, first-out
(FIFO) costing.
Required:


(a) EUP TI: 40,000; Mat: 40,000; Conv: 46,000

(b) TI: $2.50; Mat: $1.50; Conv: $0.6522; Total $4.6522
(c) $212,888
(d) $43,913
Feedback: Overhead applied = 50% × $20,000 = $10,000; started & completed: 40,000 - 10,000 =
30,000
(a) TI EUP: (0% × 20,000) + 30,000 + (100% × 10,000) = 40,000
Mat EUP: (0% × 20,000) + 30,000 + (100% × 10,000) = 40,000
Conv EUP: (50% × 20,000) + 30,000 + (60% × 10,000) = 46,000
(b) TI: $100,000/40,000 = $2.5000
Mat: $60,000/40,000 = $1.5000; Conv: ($20,000 + $10,000)/46,000 = $0.6522
8-190
(c) BWIP $66,800
Conv: 10,000 × $0.6522 = 6,522
$73,322
Start & complete:
30,000 × ($2.50 + 1.50 +
139,566
0.6522)
Total $212,888
(d) EWIP:
Trans-in: 10,000 × $2.50 = $25,000
Mat: 10,000 × $1.50 = 15,000
Conv: 6,000 × $0.6522 = 3,913
Total EWIP $43,913

Blooms: Apply
Gradable: manual

8-191

The beginning balance inventory consists of $43,400 in materials cost. Malcom uses the first-in, first-out
(FIFO) method to account for its operations.

(a) $84,822
(b) $566,171
Feedback: Started & completed: 280,000 - 45,000 = 235,000

EUP: Mat: (0% × 35,000) + (100% × 235,000) + (100% × 45,000) = 280,000; Conv: (1/5 × 35,000) +
(100% × 235,000) + (2/3 × 45,000) = 272,000
Unit costs:
Mat: $397,600/280,000 = $1.42
Conv: $189,700/272,000 = $0.6974
(a) EWIP: Mat (45,000 × $1.42) + Conv (30,000 × $0.6974) = $84,822
(b)
$68,582
BWIP + Conversion to complete = $63,700 + (7,000 × $0.6974) =
497,589
Start & complete [235,000 × ($1.42 + $0.6974)] =
Transferred Out = $566,171

8-192
Blooms: Apply
Gradable: manual

8-193
consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of
$124,800 materials and $104,500 conversion. 58,000 units were started into production during the
month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of
6,000 chairs was 100% complete as to materials and 40% complete as to labor. Everglades uses first-in,
first-out (FIFO) costing.
Required:


(a) EUP Mat: 58,000; Conv: 56,650

(b) Mat: $26.50; Conv: $37.50; Total $64.00
(c) $3,641,675
(d) $249,000
Feedback: Started & completed: 58,000 - 6,000 = 52,000
(a) Mat EUP: (0% × 5,000) + 52,000 + (100% × 6,000) = 58,000

Conv EUP: (45% × 5,000) + 52,000 + (40% × 6,000) = 56,650
(b) Mat: $1,537,000/58,000 = $26.50
Conv: $2,124,375/56,650 = $37.50
(c) BWIP $229,300

Conv: 2,250 × $37.50 = 84,375
$313,675
Start & Complete:
52,000 × ($26.50 + $37.50) 3,328,000
Total $3,641,675
(d) EWIP:
Mat: 6,000 × $26.50 = 159,000
Conv: 2,400 × $37.50 = 90,000
Total EWIP $249,000

Blooms: Apply
Gradable: manual
8-194

132. Toxo Chemicals produces a solvent in its Glendale plant. Three chemicals are combined at the start of
the process and blended under pressure for a period of time. At the 75% point of completion, an
additional chemical is added. The following information has been gathered:
Additiona
Chemical Conversion
l Gallons
Mix Cost
Chemical
BWIP $5,000 -0- $3,000 10,000
Added 65,000 15,000 35,000 100,000
WIP was at the 40% completion point, the ending WIP is at 70%. Toxo uses first-in, first out (FIFO)
costing.
Required:


(a) Mix: 100,000; Added Chem: 98,000; Conversion: 102,400

(b) Mix: $0.6500; Added Chem: $0.1531; Conversion: $0.3418
(c) $112,333
(d) $10,671
Feedback: Started & completed: 100,000 started - 12,000 EWIP = 88,000
(a) Chem Mix: (0% × 10,000) + (100% × 88,000) + (100% × 12,000) = 100,000
Added Chemical: (100% × 10,000) + (100% × 88,000) + (0% × 12,000) = 98,000
Conversion: (60% × 10,000) + (100% × 88,000) + (70% × 12,000) = 102,400
(b) Chem Mix: $65,000/100,000 = $0.6500
Added Chemical: $15,000/98,000 = $0.1531
Conversion: $35,000/102,400 = $0.3418
(c) BWIP $8,000 + Added (10,000 × $0.1531) + (6,000 × $0.3418) + (88,000 × $1.1449) = $112,333
(d) (12,000 × $0.65) + (8,400 × $0.3418) = $10,671

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual
8-195

133. Racquet Master (RM) Sports manufactures and distributes two types of tennis rackets: Dominant Drive
(DD) and Major Smash (MS). Both types of rackets go through Operations 1 and 3. MS also goes
through Operation 2, which adds a layer of graphite for additional strength. All material is added at the
beginning of their respective operations.
The following information relates to a work order from Discount Warehouse, Inc. for 30,000 units of
DD (Work order #286) and 8,000 units of MS (Work order #354).
Work order Work order

#286 #354
Direct materials:
Operation 1 $120,000 $80,000
Operation 3 45,000 30,000
Conversion costs:
Operation 1 30,000 15,000
Operation 3 14,793 14,896
Required:
Assume that there are 3,000 units of DD and 2,000 units of MS in Operation 3 at the end of the
reporting period 45% and 65% complete respectively. Compute the ending inventory for Operation #3.

Job 286: $18,633; Job 354: $42,276
Feedback: Job 286:

Materials: ($120,000 + 45,000)/30,000 = $5.50/unit
EUP: (30,000 - 3,000) + (3,000 × 45%) = 27,000 + 1,350 = 28,350
Conversion cost: ($30,000 + 14,793)/28,350 = $1.58
Ending Inv: (3,000 × $5.50) + (1,350 × $1.58) = $16,500 + 2,133 = $18,633
Job 354:
Materials: ($80,000 + 20,000 + 30,000)/8,000 = $16.25/unit
EUP: (8,000 - 2,000) + (2,000 × 65%) = 6,000 + 1,300 = 7,300
Conversion cost: ($15,000 + 25,000 + 14,896)/7,300 = $7.52
Ending Inv: (2,000 × $16.25) + (1,300 × $7.52) = $32,500 + 9,776 = $42,276

Blooms: Apply
Gradable: manual

8-196
134. Martin Enterprises uses three operations in sequence to manufacture an assortment of flower pots. In
each operation, the same procedures, time, and costs are used to perform that operation, regardless of
the type of pot being produced. During March, a batch of 500 Clay Pots and a batch of 800 Porcelain
Pots were put through the first operation. All materials for a batch are introduced at the beginning of the
operation for that batch. The costs shown below were incurred in March for the first operation:
Direct Labor $4,450

Manufacturing Overhead 3,600
Direct Materials:
Clay Pots $1,200
Porcelain Pots $2,400
There were no inventories at the beginning of the month; 400 units of Clay Pots and 600 units of
Porcelain Pots were transferred to the next operation. The ending inventories were 30% and 60%
complete for Clay and Porcelain, respectively.
Required:
What is the total cost of the ending inventory in process for operation #1?

Clay: $450 + Porcelain: $1,440 = $1,890
Feedback: EUP Clay: 400 + [(500 - 400) × 30%] = 400 + 30 = 430

EUP Porcelain: 600 + [(800 - 600) × 60%] = 600 + 120 = 720
Conversion cost: ($4,450 + 3,600)/(430 + 720) = $7.00
Clay:
Materials: $1,200/500 = $2.40/unit
Ending Inv: (100 × $2.40) + (30 × $7) = $240 + 210 = $450
Porcelain:
Materials: $2,400/800 = $3/unit
Ending Inv: (200 × $3) + (120 × $7) = $600 + 840 = $1,440

Blooms: Apply
Gradable: manual

8-197
135. Carmen Products makes four models of guitars. All of the models go through the same assembly line
but they differ as to the materials used and the degree of finishing. The Basic model has a low gloss
finish and goes immediately to Packaging upon completion in Assembly. The Super model and the
Premium model go through a Buffing process upon completion in Assembly. They then go on to
Packaging. The Deluxe model is the top of the line and goes first to Buffing from the Assembly, then to
Special Polishing, then to Packaging.
Carmen uses operations costing and allocates conversion costs based on the number of units processed
in each department.
Premiu Delux
Total Basic Super
m e
Units 1,000 500 250 50
$97,50 $40,00 $30,00
Materials $20,000 $7,500
0 0 0
Conversion

costs:
$54,00
Assembly
0
Buffing 32,000
Special
3,000
Polish
Packagin
9,000
g
$98,00
Total
0
Required:
What is the cost per unit of each of the completed guitars?

Basic: $75/unit; Super: $135/unit; Premium: $155/unit; Deluxe: $285/unit
Feedback: Assembly: $54,000/(1,000 + 500 + 250 + 50) = $30/unit

Buffing: $32,000/(500 + 250 + 50) = $40/unit
Sp Polish: $3,000/50 = $60/unit
Packaging: $9,000/1,800 = $5/unit
Basic: $40,000/1,000 + $30 + $5 = $75/unit
Super: $30,000/500 + $30 + $40 + $5 = $135/unit
Premium: $20,000/250 + $30 + $40 + $5 = $155/unit
Deluxe: $7,500/50 + $30 + $40 + $60 + $5 = $285/unit

Blooms: Apply
Gradable: manual
8-198

136. Sparkle Inc. is a company that produces liquid cleaning products. Sparkle's management is trying to
decide whether to install a job or process costing system. The manufacturing vice president has stated
that job costing gives the best control because it is possible to assign costs to specific lots of goods. The
controller, however, has stated that job costing requires too much record keeping. Would a process
costing system meet the manufacturing vice president's control objectives? Explain.

Assignment of costs to specific barrels of liquid cleaning products or similarly mass-produced items
requires a considerable amount of record keeping. However, assuming products are all the same, a
process costing system provides sufficient information for control purposes. Record keeping is
simplified since all costs in a given month are accumulated in one account and assigned at the end of the
period.

Blooms: Analyze
Gradable: manual

137. What would happen to the equivalent units, production cost per unit and costs transferred out for a
company using weighted-average if the degree of completion of the ending inventory were
underestimated?

If the degree of completion of ending inventory were underestimated, the equivalent units would be
understated. Since equivalent units are the denominator for the cost per unit, this would be overstated
since the denominator is too small. Since the cost per unit is overstated, the costs transferred out would
also be overstated.
Feedback: Although it is not requested, the ending inventory cost would be understated due to the
understatement of the equivalent units in ending inventory.

Blooms: Analyze
Gradable: manual

8-199
138. Describe the five steps in preparing a production cost report.

Step 1: Measure the physical flow of the resources. Step 2: Compute the equivalent units of production.
Step 3: Identify the product costs for which to account. Step 4: Compute the cost per equivalent unit.
Step 5: Assign the product cost to batches of work.

Blooms: Remember
Gradable: manual

139. Explain the major differences between weighted-average costing and FIFO costing.

Weighted-average combines the effort that is present in the beginning work-in-process with the effort
added this period. FIFO keeps the beginning costs and efforts segregated from the current period. This
results in differences in the equivalent units, the costs included in the unit cost calculations, and the
computation of costs transferred out to the next department.

Blooms: Remember
Gradable: manual

140. Is cost accumulation easier under a process costing system or a job-order costing system?

Job costing requires more recordkeeping (e.g., detailed subsidiary ledgers for each individual job) while
process costing requires more estimates (e.g., degree of completion, cost flow assumption, and
equivalent units of production).

Blooms: Remember
Gradable: manual

8-200
141. What characteristics of the production process would lead a company to use process costing rather than
job costing?

Process costing assumes that each unit produced is relatively uniform or is essentially identical. This
implies that the inputs (materials, labor, and overhead) are relatively uniform and the production process
is consistent.

Blooms: Remember
Gradable: manual

142. The more important individual unit costs are for making decisions, the more likely it is that process
costing will be preferred to job costing. Do you agree?

Student answers may vary, but they should disagree with this concept; this is because the more
important individual unit costs are for decisions, the more likely it is that a company will want to use a
costing system that separates costs by units. Job costing allows a company to treat every unit as a
separate job.

Blooms: Remember
Gradable: manual

8-201
143. Carlton Electronics manufactures three cell phone models, General, Premium, and Deluxe, which differ
in the components included. Production takes place in two departments, Assembly and Special
Packaging. Batches of General phones are made to service government military contracts. Premium
model production phones are specific to corporate contracts. Deluxe model phones are sold
commercially through big-box stores. Explain why operation costing might be a consideration for
Carlton.

Operation costing is a hybrid of job and process costing. Essentially, the costs of resources that are
applied to products in a roughly uniform way are assigned to products using process costing methods.
The costs of resources that are applied in a unique way to products (differing components and contract
specifications) are assigned to the individual products as in job order costing. Operation costing is used
in manufacturing goods that have some common characteristics plus some individual characteristics, as
do Carlton's product lines.

Blooms: Remember
Gradable: manual
Topic: Comparing Job, Process, and Operation Costing

8-202
8-203
144. Production and cost data for the month of February for Process A of the Packer manufacturing
Company follow:

25% complete with respect to conversion
2,000
cost)
New units started in process 8,000
1/3 complete with respect to conversion cost) 3,000
Work-in-process inventory, February 1:
Materials $600
Conversion $100
Costs incurred in February:
Materials issued $2,560
Conversion $1,500
The company uses the weighted-average cost method in its process costing system.
Required:
a. Calculate the equivalent units and cost per equivalent unit for February for materials and for
conversion costs. (Carry calculations out to the nearest tenth of a cent.)
b. Determine the cost transferred to finished goods.
c. Determine the amount of cost that should be assigned to the ending work-in-process.

a. Equivalent units:
Materials:
Completed 7,000
Work-in-process, Feb. 28 3,000
Conversion:
Completed 7,000
Work-in-process, Feb. 28 (3,000 × 1/3) 1,000
Materia
Conversion
l
Work-in-process, Feb. 1 $600 $100
Cost added in February 2,560 1,500
8-204
Total cost $3,160 $1,600
b. Units completed and transferred: 7,000 × $0.516 = $3,612
c. Work-in-process inventory, February 28:

Material cost: 3,000 units × 100% × $0.316 $948
Conversion cost: 3,000 units × 1/3 × $0.20 200
Total $1,148

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-205
8-206
145. Tiny Villages Inc. uses the weighted-average method in its process costing system. The following data
concern the operations of the company's first processing department - Extruding - for a recent month.
70%
conversion
11,000
month
10%
conversion
Required:
a. Determine the equivalent units of production.

b. Determine the costs per equivalent unit.
d. Determine the cost of the units transferred to the next department.

Material
a. Conversion
s
Units transferred to next
11,000 11,000
department
Equivalent units of
11,240 11,030
production
8-207
Material
b. Conversion
s
Cost of beginning work-in-
$1,368 $8,064
process
Cost added during the month 64,948 412,179
Total cost $66,316 $420,243
Equivalent units 11,240 11,030
Material
c. Conversion Total
s
Ending work-in-

process:
Equivalent units of
240 30
production
Cost per equivalent
$5.90 $38.10
unit
Cost of ending
work-in-process $1,416 $1,143 $2,559
inventory
Material
d. Conversion Total
s
Units completed
and transferred 11,000 11,000
out
Cost per
$5.90 $38.10
equivalent unit
Cost of units
$64,900 $419,100 $484,000
transferred out

Blooms: Apply
Gradable: manual

8-208
8-209
146. Paradise Inc. uses the weighted-average method in its process costing system. The following data
concern the operations of the company's first processing department - Cutting - for a recent month.
80%
conversion
Materials cost $525
11,000
month
20%
conversion
Required:
Using the weighted-average method:

c. Determine the cost of units transferred out of the department during the month.
d. Determine the cost of ending work-in-process inventory in the department.

Material
a. Conversion
s
Units transferred to next
10,700 10,700
department
Equivalent units of
10,900 10,780
production
8-210
Material
b. Conversion
s
Cost of beginning work-in-
$525 $1,696
process
Cost added during the month 83,405 223,606
Total cost $83,930 $225,302
Equivalent units 10,900 10,780

Blooms: Apply
Gradable: manual

147. In October, one of the processing departments at Radiance Corporation had beginning work-in-process
inventory of $29,000 and ending work-in-process inventory of $23,000. During the month, the cost of
units transferred out from the department was $311,000.
Required:
Construct a cost reconciliation report for the department for the month of November.

Costs to be accounted for:

Cost of beginning work-in-process
$29,000
inventory
Costs added to production during the
305,000
month*
Total cost to be accounted for $334,000
Costs accounted for as follows:
Cost of ending work-in-process inventory $23,000
Cost of units transferred out 311,000
Total cost accounted for $334,000
*Plug figure

Blooms: Apply
Gradable: manual

8-211
148. In May, one of the processing departments at Patton Corporation had beginning work-in-process
inventory of $31,000. During the month, $369,000 of costs were added to production and the cost of
units transferred out from the department was $368,000.
Required:
Construct a cost reconciliation report for the department for the month of March.

Costs to be accounted for:

Cost of beginning work-in-process
$31,000
inventory
Costs added to production during the
369,000
month
Total cost to be accounted for $400,000
Costs accounted for as follows:
Cost of ending work-in-process inventory* $32,000
Cost of units transferred out 368,000
Total cost accounted for $400,000
*Plug figure

Blooms: Apply
Gradable: manual

8-212
8-213
149. Dickerson Company uses a process costing system. The following information relates to one month's
activity in the company's Mixing Department.
Conversion Percent
Units
Complete
Beginning work-in-
10,000 20%
process inventory
Units started 21,000
Units completed and
26,000
transferred out
5,000 80%
inventory
The conversion cost of the beginning inventory was $6,500. During the month, $112,000 in additional
conversion cost was incurred.
Required:
a. Assume that the company uses the FIFO method. Compute:

b. Assume that the company uses the weighted-average cost method. Compute:


a. FIFO method:
1. Units transferred out 26,000

Deduct: equivalent units in the beginning
2,000
inventory
24,000
Add: equivalent units in the ending inventory 4,000
2. $112,000 ÷ 28,000 EUs = $4 per EU
8-214
3. Beginning inventory:
Cost in the beginning inventory $6,500
Completion of the units in the beginning
32,000
inventory: $4 × 10,000 × 80%
Units started and completed during the
64,000
period: $4 × 16,000 units
Total cost transferred out $102,500
4. 5,000 × 80% × $4 per EU = $16,000
b. Weighted-average method:
1. Units transferred out 26,000

Add: equivalent units in the ending
4,000
inventory 5,000 × 80%
2. Cost in the opening inventory $6,500
Cost incurred during the period 112,000
Total cost $118,500
$118,500 ÷ 30,000 EUs = $3.95 per EU
3. 26,000 units × $3.95 per EU = $102,700
4. 5,000 × 80% × $3.95 per EU = $15,800

Blooms: Apply
Gradable: manual

8-215
8-216
150. Vacumatic, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Assembly - for a recent month.
10%
conversion
Materials cost $595
14,000
month
60%
conversion
Required:


FIFO method:
Material
a. Conversion
s
To complete the beginning work-in-process:
Materials: 700 units × (100% - 50%) 350
Conversion: 700 units × (100% - 10%) 630
Units started and completed (14,600 - 700) 13,900 13,900
8-217
Material
b. Conversion
s
Cost added during the month $21,465 $440,618
Equivalent units of
14,310 14,590
production
Material
c. Conversion Total
s
Ending work-in-

process:
Equivalent units of
60 60
production
Cost per equivalent
$1.50 $30.20
unit
Cost of ending
$90 $1,812 $1,902
work-in-process
Material
d. Conversion Total
s
Cost from the
beginning $595 $2,093 $2,688
inventory
Cost to complete
the units in

beginning
inventory:
Equivalent
350 630
units to complete
Cost per
$1.50 $30.20
equivalent unit
Cost to
$525 $19,026 $19,551
complete
Cost of units
started and
completed:
Units started
13,900 13,900
and completed
Cost per
$1.50 $30.20
equivalent unit
Cost of units
started and $20,850 $419,780 $440,630
completed
Total cost of
units transferred $462,869
out
8-218

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-219
8-220
151. Emerson, Inc. uses the FIFO method in its process costing system. The following data concern the
operations of the company's first processing department - Mixing - for a recent month.
30%
conversion
16,000
month
20%
conversion
Required:


FIFO method:
Material
a. Conversion
s

work-in-process:
Materials: 500 units ×
150
(100% - 70%)
350
(100% - 30%)
Units started and
15,500 15,500
completed (16,000 - 500)
8-221
Materials: 500 units ×
250
50%
100
20%
Equivalent units of
15,900 15,950
production
Material
b. Conversion
s
Cost added during the month $98,580 $468,930
Equivalent units of
15,900 15,950
production
Material
c. Conversion Total
s
Ending work-in-

process:
Equivalent units of
250 100
production
Cost per equivalent
$6.20 $29.40
unit
Cost of ending
$1,550 $2,940 $4,490
work-in-process
Material
d. Conversion Total
s
Cost from the
beginning $2,240 $4,365 $6,605
inventory
Cost to complete
the units in

beginning
inventory:
Equivalent
150 350
units to complete
Cost per
$6.20 $29.40
equivalent unit
Cost to
$930 $10,290 $11,220
complete
Cost of units
started and
completed:
Units started and
15,500 15,500
completed
Cost per
$6.20 $29.40
equivalent unit
8-222
Cost of units
started and $96,100 $455,700 $551,800
completed
Total cost of
units transferred $569,625
out

Blooms: Apply
Difficulty: 3 Hard
Gradable: manual

8-223
152. Hsu Corporation uses the FIFO method in its process costing system. The following data concern the
company's Grinding Department for the month of August.

Material
Conversion
s
180 160
Equivalent units in ending
120 99
Required:
Determine the cost of ending work-in-process inventory and the cost of units transferred out of the
department during August using the FIFO method.

FIFO method:
Transferred to the next department:

From the beginning work-in-process

inventory:
Cost in beginning work-in-process
$1,090
inventory
Cost to complete these units:
Materials, 180 EUs at $17.80 per EU 3,204
Conversion, 160 EUs at $34.50 per EU 5,520
Total cost from beginning inventory 9,814
Units started and completed this month,
139,641
2,670 units at $52.30 per unit
Total cost transferred to the next department $149,455
Materials, 120 EUs at $17.80 per EU $2,136
Total work-in-process, August 31 $5,552

Blooms: Apply
Gradable: manual
8-224

153. The following data has been provided by Radiotronics Inc., a company that uses the FIFO method in its
process costing system. The data concern the company's Wiring Department for the month of March.

Material
Conversion
s
300 230
Equivalent units in ending
380 297
Required:
Determine the cost of ending work-in-process inventory and the cost of the units transferred out of the
department during March using the FIFO method.

FIFO method:
Transferred to the next department:

From the beginning work-in-process

inventory:
Cost in beginning work-in-process
$2,260
inventory
Cost to complete these units:
Materials, 300 EUs at $33.30 per EU 9,990
Total cost from beginning inventory 17,126
Units started and completed this month,
253,425
4,650 units at $54.50 per unit
Total cost transferred to the next department $270,551
Work-in-process, March 31:
Materials, 380 EUs at $33.30 per EU $12,654
Total work-in-process, March 31 $18,950

8-225
Blooms: Apply
Gradable: manual

8-226

Process Costing: True / False Questions

Uploaded by

Copyright:

Available Formats

Process Costing: True / False Questions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Process Costing: True / False Questions

Uploaded by

Copyright:

Available Formats

Chapter 08

True / False Questions

Multiple Choice Questions

Conversion Costs Material G

A. production is only partially completed during the accounting period.

A. the need for averaging.

A. units completed during the period and transferred out.

A. Finished goods inventory control.

No. of Units Percent Complete

Equivalent units of production in ending inventory amounted to: (CPA adapted)

A. Compute the equivalent units of production.

A. more than the units started during the period.

A. transferred out during the period.

A. can be used under any cost flow assumption.

Materials Conversion Costs

Direct materials (1,200 at $10) $12,000

Beginning inventory -0-

Equivalent units of production for material are:

Beginning inventory -0-

Equivalent units of production for labor and overhead are:

Beginning inventory -0-

Unit cost of material is:

Beginning inventory -0-

Unit cost of labor and overhead is:

Beginning inventory -0-

Total cost of the 16,000 units finished is:

Beginning inventory -0-

Total cost of the 4,000 units of the ending inventory:

Percent Complete with

A. current costs only.

A. transferred out during the period.

A. beginning inventory this period for this process.

A. schedule of Cost of Goods Manufactured.

Percent Complete with Respect

Beginning work-in-process inventory:

Beginning work-in-process inventory:

Beginning work-in-process inventory:

Beginning work-in-process inventory:

A. completed during the period and units in ending inventory.

How many units were transferred-out during the period?

A. only current period costs.

What are the equivalent units of production for conversion costs?

The conversion costs per equivalent unit is:

The cost of goods transferred to finished goods is:

The cost of the ending Work-in-Process Inventory is:

A. material added at the beginning of the process.

Equivalent Units for Weighted Average compared to

A. uses a separate Work-in-process account for each processing department.

A. increase the equivalent units of production.

A. There is no ending inventory.

A. used a standardized method that is repeatedly performed.

Units in process, February 1: materials 85%

Units in process, November 1: materials 85%

(HINT: use 4 decimal places in your calculations)

a. Compute the equivalent units of production for each input.

Chemical Additional Conversion

(HINT: use 4 decimal places in your calculations)

a. Compute the equivalent units of production for each input.

Beginning work-in-process 20,000 units

(100.9) + (50.8) + (200*.1) = 150