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The correct answer for each question is indicated by a .

1 CORRECT Which of the following statements is (are) true?


A)A manufacturer of ink cartridges would ordinarily use process
costing rather than job-order costing.
B)The output of a processing department must be homogeneous
in order to use process costing.
C)If a company uses a process costing system it accumulates
costs by processing department rather than by job.
D)All of the above are true statements.

In a process costing system, the journal entry used to record the transfer of units
2 CORRECT from Department A, a processing department, to Department B, the next processing
department includes a debit to:
A)Work in Process - Department A and a credit to Work in Process
- Department B.
Work in ProcessB)
- Department B and a credit to Work in Process - Department A.
C)Work in Process - Department B and a credit to Materials.
D)Finished Goods and a credit to Work in Process - Department B.

The Renaissance Company uses the weighted-average method in its process costing
system. The May 1 work in process inventory in a particular department consisted
of 16,000 units, which were 50% complete with respect to conversion costs. The
company recorded 59,000 equivalent units of production for conversion costs for
3 CORRECT May in that department. There were 12,000 units in that department's ending work
in process inventory on May 31, which were 75% complete with respect to
conversion costs. A total of 50,000 units were completed and transferred out of the
department during the month. The number of units started during May in the
department was:
A)42,000 units.
B)46,000 units.
C)29,000 units.
D)54,000 units.
Feedback:
To determine the units started during May, account for all units in the
processing department:
Completed
Beginning inventory 16,000 (given) 50,000 (given)
(transferred out)
Started (transferred in) 46,000 (C) Ending inventory 12,000 (given)
Total units to be Total units
62,000 (B) 62,000 (A)
accounted for accounted for
Calculations:
(A) Units completed + Units in ending inventory = Total units accounted for
50,000 + 12,000 = 62,000
(B) Total units to be accounted for = Total units accounted for
62,000 = 62,000 (fromA)
(C) Units in beginning inventory + Units started = Total units to be accounted
for
16,000 + Units started = 62,000
Units started = 46,000
Paist Company uses the weighted-average method in its process costing system. The
following data were taken from the company's accounting records:
Beginning work in process inventory
(100% complete as to materials;
70% complete as to conversion) 60,000 units
4 CORRECT
Started in process during the period 180,000 units
Ending work in process inventory
(100% complete as to materials;
60% complete as to conversion) 40,000 units
The equivalent units of production for conversion costs was:
A)200,000 units.
B)204,000 units.
C)222,000 units.
D)224,000 units.

Feedback:
First, account for all units in the processing department in order to determine
the units in ending inventory (which is required in order to compute the
equivalent units).
Beginning inventory 60,000 (given) Completed (transferred out) 200,000 (C)
Started (transferred in) 180,000 (given) Ending inventory 40,000 (given)
Total units to be Total units
240,000 (A) 240,000 (B)
accounted for accounted for
Calculations:
(A) Units in beginning inventory + Units started = Total units accounted to be
for
60,000 + 180,000 = 240,000
(B) Total units to be accounted for = Total units accounted for
240,000 (fromA) = 240,000
(C) Units completed + Units in ending inventory = Total units accounted for
Units completed + 40,000 = 240,000
Units completed = 200,000
Then, compute the equivalent units.
Units completed and transferred out 200,000
Units in ending inventory (40,000 x .6) 24,000
Equivalent units 224,000

Bandana Company, a manufacturer of handkerchiefs, uses the weighted-average


method in its process costing system. The company sold 250,000 units during the
month of April. There is only one processing department. The following data were
taken from the company's accounting records:
Inventory at April 1:
Work in process None
5 CORRECT Finished goods 75,000 units
Inventory at April 30:
Work in process (75% complete
as to conversion costs) 16,000 units
Finished goods 60,000 units
What were the equivalent units of production for conversion costs for April?
A)153,000
B)235,000
C)247,000
D)251,000
Feedback:
First, account for all units in the finished goods department in order to
compute the number of units that were transferred to finished goods from the
processing department during April (which is required in order to compute the
equivalent units in the processing department).
Beginning inventory 75,000 (given) Sold (transferred out) 250,000 (given)
Transferred in
235,000 (C) Ending inventory 60,000 (given)
(from Processing Dept.)
Total units to be Total units
310,000 (B) 310,000 (A)
accounted for accounted for
Calculations:
(A) Units sold + Units in ending inventory = Total units accounted for
250,000 + 60,000 = 310,000
(B) Total units to be accounted for = Total units accounted for
310,000 (fromA) = 310,000
(C) Units in beginning inventory + Units transferred in = Units accounted to be
for
75,000 + Units transferred in = 310,000
Units transferred in (that is, from the processing department) = 235,000
Then, calculate the equivalent units in the processing department:
Units completed and transferred out
235,000
(to the finished goods department)
Units in ending inventory (16,000 x .75) 12,000
Equivalent units 247,000

The Vincennes Company uses the weighted-average method in its process costing
system. For a particular department, the company had 108,000 equivalent units of
production with respect to conversion costs in March. There were 15,000 units in
6 CORRECT the department's beginning work in process inventory, two thirds complete with
respect to conversion costs. During March, 105,000 units were started and 100,000
were completed and transferred out of the department. The ending work in process
inventory in the department:
A)consisted of 5,000 units.
B)consisted of 10,000 units.
C)was 40% complete with respect to conversion costs.
D)was 65% complete with respect to conversion costs.
Feedback:
First, account for all units in the processing department in order to determine
the units in the ending inventory.
Beginning inventory 15,000 (given) Completed (transferred out) 100,000 (given)
Started (transferred in) 105,000 (given) Ending inventory 20,000 (C)
Total units to be Total units
120,000 (A) 120,000 (B)
accounted for accounted for
Calculations:
(A) Units in beginning inventory + Units started = Total units to be accounted
for
15,000 + 105,000 = 120,000
(B) Total units to be accounted for = Total units accounted for
120,000 (fromA) = 120,000
(C) Units completed + Units in ending inventory = Total units accounted for
100,000 + Units in ending inventory = 120,000
Units in ending inventory = 20,000
Since the units in the ending inventory does not match answers a or b, the
equivalent units in the ending inventory must be computed to decide between
answers c or d.
Equivalent units in ending inventory + Units completed = Equivalent units
Equivalent units in ending inventory + 100,000 (given) = 108,000 (given)
Equivalent units in ending inventory = 8,000
Finally, use the formula to calculate the number of equivalent units in ending
inventory in order to determine the percent complete:
Units in ending inventory x percent complete = Equivalent units in ending
inventory
20,000 (from above) x percent complete = 8,000 (given)
Percent complete = .4 or 40%

100,000 + Units in ending inventory = Total


Conway Company uses the weighted-average method in its process costing system.
The following information pertains to Processing Department A for the month of
April:
Number Cost of
of units materials
7 CORRECT Beginning work in process 60,000 $20,000
Started in April 160,000 $54,000
Units completed 170,000
Ending work in process 50,000
All materials are added at the beginning of the process. The cost per equivalent unit
for materials is closest to:
A)$0.25. C)$0.44.
B)$0.34. D)$1.48.
Feedback:
Equivalent unit calculation:
Units completed 170,000
Units in ending inventory (50,000 x 100%) 50,000
Equivalent units 220,000

Cost per equivalent unit:


Beginning inventory $20,000
Started (materials transferred in) 54,000
Total costs 74,000
Divided by equivalent units ÷ 220,000
Cost per equivalent unit $ 0.34
Pierce Company uses the weighted-average method in its process costing system.
The Cutting Department is the second department in its production process. The
data below summarize the department's operations in May.
Percentage
Units complete
Beginning work in process inventory 14,200 70%
8 CORRECT
Transferred in from the prior
department during May 122,000
Ending work in process inventory 9,200 30%
The Cutting Department's production report indicates that the cost per equivalent
unit for conversion cost for May was $8.24. How much conversion cost was
assigned to the units transferred out of the Cutting Department during May?
A)$964,574.40
B)$1,005,280.00
C)$1,046,480.00
D)$1,122,288.00
Feedback:
First, account for all units in the processing department in order to determine
the units completed (and transferred out).
Beginning inventory 14,200 (given) Completed (transferred out) 127,000 (C)
Started (transferred in) 122,000 (given) Ending inventory 9,200 (given)
Total units to be Total units
136,200 (A) 136,200 (B)
accounted for accounted for
Calculations:
(A) Units in beginning inventory + Units started = Total units to be accounted
for
14,200 + 122,000 = 136,200
(B) Total units to be accounted for = Total units accounted for
136,200 (fromA) = 136,200
(C) Units completed + Units in ending inventory = Total units accounted for
Units completed + 9,200 = 136,200
Units completed (and transferred out) = 127,000
Then, compute the conversion cost assigned to the units transferred out.
127,000 x $8.24 = $1,046,480.00

The Batavia Company uses the weighted-average method in its process costing
system. The company has only a single processing department. The company's
ending work in process inventory on April 30 consisted of 36,000 units. The units in
9 CORRECT the ending work in process inventory were 100% complete with respect to materials
and 60% complete with respect to labor and overhead. If the cost per equivalent unit
for April was $5.50 for materials and $8.50 for labor and overhead, the total cost
assigned to the ending work in process inventory was:

A)$302,400.
B)$320,400.
C)$504,000.
D)$381,600.
Feedback: Work in Process, April 30:
Materials (36,000 units x 100% x $5.50 per unit) $198,000
Labor and overhead (36,000 units x 60% x $8.50 per unit) 183,600
Total cost of work in process, April 30 $381,600

Fox Valley Manufacturing Company's beginning work in process inventory consisted


of 10,000 units, 100% complete with respect to materials cost and 40% complete
with respect to conversion costs. The total cost in the beginning inventory was
10 CORRECT $60,000. During the month, 100,000 units were transferred out. The equivalent
unit cost was computed to be $4.00 for materials and $7.40 for conversion costs
under the weighted-average method. Given this information, the total cost of the
units completed and transferred out was:
A)$960,000.
B)$1,020,000.
C)$1,080,000.
D)$1,140,000.
Feedback: Units transferred out:
Materials (100,000 units x $4.00 per unit) $ 400,000
Labor and overhead (100,000 units x $7.40 per unit) 740,000
Total cost of units transferred out $1,140,000

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