PROCESS COSTING

PROCESS COSTING
1. A cost center in a process cost system is a:

a. Unit to which costs are accumulated.
b. Job.
c. Specific product.
d. Employee.
2. Process costing techniques should be used in assigning costs to products:
a. If the product is manufactured on the basis of each order received.
b. In all manufacturing situations.
c. When production is only partially completed during the accounting period.
d. If the product is composed of mass-produced homogeneous units.
3. A true process costing system could make use of each of the following except:
a. Predetermined factory overhead rates.
b. Individual jobs.
c. Cost centers.
d. General ledger control accounts.
4. Which of the following firms is least likely to use process costing?
a. A yogurt manufacturer.
b. A refiner of petroleum products.
c. A computer manufacturer.
d. A manufacturer of concrete products.
5. Which of the following characteristics applies to process costing?
a. Differentiated products are provided on a special order basis.
b. Cost are accumulated by department.
c. Cost are accumulated by jobs.
d. Direct labor workers must keep detailed records as to the jobs on which they worked.
6. Daniel LLC incurred cost of P 43,000 for material, P 26,000 for labor, and P 23,000 for factory
overhead. There was no beginning or ending work in process. 5,000 units were completed and
transferred out. The unit cost for labor is:
a. P 8.60
b. P 5.20
c. P 18.40
d. P 4.60
7. The production report for Phillips Industries, which had no beginning inventory at the beginning of the
month, included the following information for September:
Number of Units Completion

Units started in production 81,000
transferred to finished goods 72,000
If the equivalent units for September’s production were 77,400, how many units were in process at the
end of the month, and how complete were they?
a. 9,000; 30%
b. 9,000; 60%
c. 3,000; 90%
d. 6,000; 90%
8. Vital Industries manufactured 2400 units of its product Huge in the month of April. It incurred a total
cost of P132,000 during the month. Out of this P132,000, P45,700 comprised of direct materials used in
the product and the rest was incurred because of the conversion cost involved in the process. Ryan had
no opening or closing inventory. What will be the total cost per unit of the product, assuming conversion
costs contained P10,000 of indirect labor?
a. P 55
b. P 50
c. P 39
d. P 60
9. Shell Pharma places 800 units in production during the month of January. All 800 units are completed
during the month. It had no opening inventory. Direct material costs added during January was P74,000
and conversion costs added during January was P8400. What is the total cost per unit of the product
produced during January?
a. P 103
b. P 80
c. P 10
d. P 93
10. Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost
categories, direct materials and conversion costs. Each product must pass through Department A and
Department B. Direct materials are added at the beginning of production. Conversion costs are allocated
evenly throughout production.
Data for Department A for February 2023 are:
in process, beginning inventory, 30% converted 200 units
Units started during February 800 units
Work in process, ending invento1y 240 units
Costs for Department A for February 2023 are:
Work in process, beginning inventory
Direct materials P 150,000
Conversion costs P 210,000
Direct materials costs added during February P 603,000
Conversion costs added during February P 429,000
How many units were completed and transferred out of Department A during February?
a. 800 units
b. 760 units
c. 1000 units
d. 440 units
11. Department 1 had put 95,000 units into process during the period and had ending units in process of
21,000 units. What is the number of units transferred to finished goods inventory, if Department 2’s
ending units in process are 12,000?
a. 104,000
b. 95,000
c. 74,000
d. 62,000
12. The cost of materials put into production in a department during the month totaled P 188,400. By
the end of the month, these materials had been used for 32,000 units, of which 29,000 were completed
and transferred out and 3,000 were in process. 80% of materials were added to the units in process.
What is the equivalent unit production for materials?

a. 31,400
b. 32,000
c. 29,600
d. 31,000
13. The cost of materials put into production in a department during the month totaled P 188,400. By
the end of the month, these materials had been used for 32,000 units, of which 29,000 were completed
and transferred out and 3,000 were in process. 80% of materials were added to the units in process.
What is the cost per equivalent unit for materials?

a. P 6.00
b. P 5.89
c. P 6.50
d. P 6.36
14. The following data for the Finishing Department of the LowKey Company in January:
Beginning Inventory -0-
Units transferred in during the month 4,700
Units transferred to Finished Goods during
the month 4,300
Ending work in process (25% complete
as to labor) 400
Labor Cost incurred for the month P 14,080
What is the equivalent [production for labor during the month?

a. 4,400
b. 4,300
c. 4,600
d. 4,700
15. Using the same information in the previous number, what is the labor cost in the ending work in
process?
a. P 320
b. P 306
c. P 1,208
d. P 960

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1. A cost center in a process cost system is a:

Number of Units Completion

What is the equivalent unit production for materials?

What is the cost per equivalent unit for materials?

What is the equivalent [production for labor during the month?

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