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Sample Test

CHAPTER 3

PROCESS COSTING

Summary of Questions by Learning Objectives and Bloom’s Taxonomy

Item	LO	BT	Item	LO	BT	Item	LO	BT	Item	LO	BT	Item	LO	BT
True-False Statements
1.	1	K	9.	2	K	17.	4	K	25.	4	K	33.	2	C
2.	1	K	10.	2	K	18.	4	C	^a26.	5	K	34.	2	K
3.	1	C	11.	2	K	19.	4	K	^a27.	5	K	35.	3	K
4.	1	C	12.	3	C	20.	4	K	^a28.	5	K	36.	4	K
5.	1	K	13.	3	K	21.	4	C	^a29.	5	K	^a37.	5	K
6.	1	K	14.	3	K	22.	4	K	^a30.	5	K
7.	1	K	15.	3	K	23.	4	K	31.	1	K
8.	2	C	16.	3	AP	24.	4	K	32.	1	K
Multiple Choice Questions
38.	1	C	60.	3	AP	82.	4	AP	104.	4	AP	126.	4	K
39.	1	C	61.	3	K	83.	4	AP	105.	4	AP	^a127.	5	AP
40.	1	K	62.	3	AP	84.	4	AP	106.	4	AP	^a128.	5	AP
41.	1	K	63.	3	AP	85.	4	AP	107.	4	AP	^a129.	5	AP
42.	1	K	64.	3	AP	86.	4	AP	108.	4	AP	^a130.	5	AP
43.	1	C	65.	3	C	87.	4	AP	109.	4	AP	^a131.	5	AP
44.	1	K	66.	3	AP	88.	4	AP	110.	4	AP	^a132.	5	AP
45.	1	C	67.	3	AP	89.	4	AP	111.	4	C	^a133.	5	AP
46.	1	K	68.	3	AP	90.	4	AP	112.	4	AP	^a134.	5	AP
47.	1	K	69.	3	AP	91.	4	AP	113.	4	AP	^st135.	1	K
48.	1	C	70.	3	AP	92.	4	AP	114.	4	AP	136.	1	K
49.	1	K	71.	3	AP	93.	4	AP	115.	4	AP	^st137.	1	K
50.	2	C	72.	3	AP	94.	4	AP	116.	4	AP	138.	3	K
51.	2	C	73.	3	AP	95.	4	AP	117.	4	AP	139.	3	K
52.	2	C	74.	3	AP	96.	4	AP	118.	4	AP	^st140.	3	K
53.	2	C	75.	3	AP	97.	4	AP	119.	4	AP	141.	4	AP
54.	2	K	76.	3	AP	98.	4	AP	120.	4	AP	^st142.	4	K
55.	2	C	77.	3	AP	99.	4	AP	121.	4	AP	143.	4	C
56.	3	AP	78.	3	AP	100.	4	C	122.	4	AP	144.	4	AP
57.	3	AP	79.	3	AP	101.	4	C	123.	4	AP	^st145.	4	K
58.	3	AP	80.	4	AP	102.	4	AP	124.	4	K	146.	4	K
59.	3	AP	81.	4	AP	103.	4	K	125.	4	K
Brief Exercises
147.	3	AP	150.	4	AP	153.	4	AP	156.	4	AP
148.	3	AP	151.	4	AP	154.	4	AP	^a157.	5	AP
149.	3	AP	152.	4	AP	155.	4	AP	^a158.	5	AP

^stThis question also appears in a self-test at the student companion website.

^a This topic is dealt with in an Appendix to the chapter.

Summary of Questions by learning Objectives and Bloom’s Taxonomy

Exercices
159.	2	AP	165.	3	AP	171.	3,4	AP	177.	3,4	AP	183.	4	AP
160.	2	AP	166.	3,4	AP	172.	3,4	AP	178.	4	AP	184.	4	AP
161.	2	AP	167.	3,4	AN	173.	3,4	AP	179.	4	AP	^a185.	5	AP
162.	2	AP	168.	3,4	AP	174.	3,4	AP	180.	4	AP	^a186.	5	AP
163.	2	AP	169.	3,4	AP	175.	3,4	AP	181.	4	AP
164.	2	AP	170.	3,4	AP	176.	3,4	AP	182.	4	AP
Completion Statements
187.	1	K	189.	1	K	191.	3	K	193.	3	AP	195.	4	K
188.	1	K	190.	2	K	192.	3	K	194.	4	K
Matching Statements
196.	1	K
Short-Answer Essay
197.	1	S	198.	4	S	199.	1	S	200.	4	S	201.	1	S

SUMMARY OF learning OBJECTIVES BY QUESTION TYPE

Item	Type	Item	Type	Item	Type	Item	Type	Item	Type	Item	Type	Item	Type
Learning Objective 1
1.	TF	6.	TF	39.	MC	44.	MC	49.	MC	187.	C	201.	SA
2.	TF	7.	TF	40.	MC	45.	MC	135.	MC	189.	C
3.	TF	31.	TF	41.	MC	46.	MC	136.	MC	196.	MA
4.	TF	32.	TF	42.	MC	47.	MC	137.	MC	197.	SA
5.	TF	38.	MC	43.	MC	48.	MC	138.	C	199.	SA
Learning Objective 2
8.	TF	11.	TF	50.	MC	53.	MC	138.	MC	161.	Ex	190.	C
9.	TF	33.	TF	51.	MC	54.	MC	159.	Ex	162.	Ex
10.	TF	34.	TF	52.	MC	55.	MC	160.	Ex	163.	Ex
Learning Objective 3
12.	TF	58.	MC	66.	MC	74.	MC	147.	BE	169.	Ex	177.	Ex
13.	TF	59.	MC	67.	MC	75.	MC	148.	BE	170.	Ex	191.	C
14.	TF	60.	MC	68.	MC	76.	MC	149.	BE	171.	Ex	192.	C
15.	TF	61.	MC	69.	MC	77.	MC	164.	Ex	172.	Ex	193.	C
16.	TF	62.	MC	70.	MC	78.	MC	165.	Ex	173.	Ex
35.	TF	63.	MC	71.	MC	79.	MC	166.	Ex	174.	Ex
56.	MC	64.	MC	72.	MC	139.	MC	167.	Ex	175.	Ex
57.	MC	65.	MC	73.	MC	140.	MC	168.	Ex	176.	Ex

Learning Objective 4
17.	TF		83.	MC	96.	MC	109.	MC	122.	MC	153.	BE	179.	Ex
18.	TF		84.	MC	97.	MC	110.	MC	123.	MC	154.	BE	180.	Ex
19.	TF		85.	MC	98.	MC	111.	MC	124.	MC	155.	BE	181.	Ex
20.	TF		86.	MC	99.	MC	112.	MC	125.	MC	156.	BE	182.	Ex
21.	TF		87.	MC	100.	MC	113.	MC	126.	MC	170.	Ex	183.	Ex
22.	TF		88.	MC	101.	MC	114.	MC	141.	MC	171.	Ex	184.	Ex
23.	TF		89.	MC	102.	MC	115.	MC	142.	MC	172.	Ex	194.	C
24.	TF		90.	MC	103.	MC	116.	MC	143.	MC	173.	Ex	195.	C
25.	TF		91.	MC	104.	MC	117.	MC	144.	MC	174.	Ex	198.	SA
36.	TF		92.	MC	105.	MC	118.	MC	145.	MC	175.	Ex	200.	SA
80.	MC		93.	MC	106.	MC	119.	MC	150.	BE	176.	Ex
81.	MC		94.	MC	107.	MC	120.	MC	151.	BE	177.	Ex
82.	MC		95.	MC	108.	MC	121.	MC	152.	BE	178.	Ex
Learning Objective ^a5
26.		TF	29.	TF	127.	MC	130.	MC	133.	MC	158.	BE	198.	C
27.		TF	30.	TF	128.	MC	131.	MC	134.	MC	185.	Ex	208.	SA
28.		TF	37.	TF	129.	MC	132.	MC	157.	BE	186.	Ex

Note: TF = True-False BE = Brief Exercise C = Completion

MC = Multiple Choice Ex = Exercise MA = Matching

SA = Short-Answer Essay

The chapter also contains one set of ten Matching questions and five Short-Answer Essay questions.

CHAPTER LEARNING OBJECTIVES

1. Discuss the uses of a process cost system and how it compares to a job order cost system. Companies that mass-produce similar products in a continuous fashion use process cost systems. Once production begins, it continues until the finished product emerges. Each unit of finished product is indistinguishable from every other unit. Job order cost systems are similar to process cost systems in three ways: (1) Both systems track the same cost elements—direct materials, direct labor, and manufacturing overhead. (2) Both accumulate cost in the same accounts—Raw Materials Inventory, Factory Labor, and Manufacturing Overhead. (3) Both assign accumulated costs to the same accounts—Work in Process, Finished Goods Inventory, and Cost of Goods Sold. However, the method of assigning costs differs significantly.

There are four main differences between the two cost systems: (1) A process cost system uses separate accounts for each department or manufacturing process, rather than only one work in process account used in a job order cost system. (2) A process cost system summarizes costs in a production cost report for each department. A job order cost system charges costs to individual jobs and summarizes them in a job cost sheet. (3) Costs are totaled at the end of a time period in a process cost system, but at the completion of a job in a job cost system. (4) A process cost system calculates unit cost as: Total manufacturing costs for the period ÷ Units produced during the period. A job order cost system calculates unit cost as: Total cost per job ÷ Units produced.

2. Explain the flow of costs in a process cost system and the journal entries to assign manufacturing costs. A process cost system assigns manufacturing costs for raw materials, labor, and overhead to work in process accounts for various departments or manufacturing processes. It transfers the costs of units completed from one department to another as those units move through the manufacturing process. The system transfers the costs of completed work to Finished Goods Inventory. Finally, when inventory is sold, the system transfers costs to Cost of Goods Sold.

Entries to assign the costs of raw materials, labor, and overhead consist of a credit to Raw Materials Inventory, Factory Labor, and Manufacturing Overhead, and a debit to Work in Process for each department. Entries to record the cost of good transferred to another department are a credit to Work in Process for the department whose work is finished and a debit to the department to which the goods are transferred. The entry to record units completed and transferred to the warehouse is a credit for the department whose work is finished and a debit to Finished Goods Inventory. The entry to record the sale of goods is a credit to Finished Goods Inventory and a debit to Cost of Goods Sold.

3. Compute equivalent units. Equivalent units of production measure work done during a period, expressed in fully completed units. Companies use this measure to determine the cost per unit of completed product. Equivalent units are the sum of units completed and transferred out plus equivalent units of ending work in process.

4. Complete the four steps to prepare a production cost report. The four steps to complete a production cost report are: (1) Compute the physical unit flow—that is, the total units to be accounted for. (2) Compute the equivalent units of production. (3) Compute the unit production costs, expressed in terms of equivalent units of production. (4) Prepare a cost reconciliation schedule, which shows that the total costs accounted for equal the total costs to be accounted for.

The production cost report contains both quantity and cost data for a production department. There are four sections in the report: (1) number of physical units, (2) equivalent units determination, (3) unit costs, and (4) cost reconciliation schedule.

^a5. Compute equivalent units using the FIFO method. Equivalent units under the FIFO method are the sum of the work performed to: (1) Finish the units of beginning work in process inventory, if any; (2) complete the units started into production during the period; and (3) start, but only partially complete, the units in ending work in process inventory.

TRUE-FALSE STATEMENTS

1. Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

2. Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine.

Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

3. A company that produces motion pictures would likely use a process cost system.

Ans: F, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

4. In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs.

Ans: T, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

5. In a process cost system, total costs are determined at the end of a month or year.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

6. Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

7. In a process cost system, materials, labor and overhead are only added in the first production department.

Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

8. The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system.

Ans: F, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

9. Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

10. In a process cost system, labor costs incurred may be captured on time tickets.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

11. A primary driver of overhead costs in continuous manufacturing operations is machine time used.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

12. Equivalent units of production are used to determine the cost per unit of completed products.

Ans: T, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

13. Equivalent units of production measure the work done during a period, expressed in fully completed units.

Ans: T, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

14. Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process.

Ans: F, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

15. The weighted-average method of computing equivalent units is the most widely used method in practice.

Ans: T, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

16. There are no units in process at the beginning of the period, 1,500 units in process at the end of the period that are 40% complete, and 15,000 units transferred out during the period. Based on this information, there were 14,400 equivalent units of production during the period.

Ans: F, LO: 3, Bloom: AP, Difficulty: Easy, Min: 2, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

17. The first step performed in preparing a production cost report is computing the equivalent units of production.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

18. Equivalent units of production must be calculated before the unit production costs can be computed.

Ans: T, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

19. The physical units in a department are another name for the equivalent units of production.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

20. Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

21. When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing.

Ans: T, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

22. The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Ans: T, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

23. A production cost report is an internal document for management that shows production quantity and cost data for a particular job.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

24. Production cost reports provide a basis for evaluating the productivity of a department.

Ans: T, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

25. Companies often use a combination of a process cost and a job order cost system, called operations costing.

Ans: T, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

^a26. The FIFO method is easier to understand and use than the weighted-average method.

Ans: F, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

^a27. The FIFO method is conceptually superior to the weighted-average method.

Ans: T, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

^a28. When comparing the FIFO with the weighted-average method, the FIFO method provides current cost information.

Ans: T, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

^a29. There are no units in ending work in process at the end of the period under the FIFO method.

Ans: F, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

^a30. Companies using the weighted-average method do not complete units left over from the previous accounting periods, they start new units.

Ans: F, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

31. In continuous process manufacturing, generally once the production begins, it continues until the finished product emerges.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

32. One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.

Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

33. The flow of costs in a process costing system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department.

Ans: F, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

34. When finished goods are sold, the entry to record the cost of goods sold is a debit to Finished Goods Inventory and a credit to Cost of Goods Sold.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

35. When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

Ans: T, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

36. In order to compute the physical unit flow, a company must first compute unit production costs.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

^a37. Under the FIFO method, it is assumed that the beginning work in process is completed before new work is started.

Ans: T, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

Answers to True-False Statements

Item

Ans.

Item

Ans.

Item

Ans.

Item

Ans.

Item

Ans.

Item

Ans.

Item

Ans.

13.

19.

25.

31.

37.

14.

20.

^a26.

32.

15.

21.

^a27.

33.

10.

16.

22.

^a28.

34.

11.

17.

23.

^a29.

35.

12.

18.

24.

^a30.

36.

MULTIPLE CHOICE QUESTIONS

38. A process cost accounting system is most appropriate when

39. a variety of different products are produced, each one requiring different types of materials, labor, and overhead.

40. the focus of attention is on a particular job or order.

41. similar products are mass-produced.

42. individual products are custom made to the specification of customers.

Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

39. A characteristic of products that are mass-produced in a continuous fashion is that

40. the products are identical or very similar in nature.

41. they are grouped in batches.

42. they are produced at the time an order is received.

43. their costs are accumulated on job cost sheets.

Ans: A, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

40. A process cost system would be used for all of the following products except

41. chemicals.

42. computer chips.

43. motion pictures.

44. soft drinks.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

41. In a process cost system,

42. a Work in Process account is maintained for each product.

43. a materials requisition must identify the job on which the materials will be used.

44. a Work in Process account is maintained for each process.

45. one Work in Process account is maintained for all the processes, similar to a job order cost system.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

42. Differences between a job order cost system and a process cost system include all of the following except the

43. documents used to track costs.

44. point at which costs are totaled.

45. unit cost computations.

46. flow of costs.

Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Applications

43. Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

44. The detail at which costs are calculated.

45. The time period each covers.

46. The number of work in process accounts.

47. The manufacturing cost elements included.

Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Applications

44. Which of the following is a true statement about process cost systems?

45. In process cost systems, costs are accumulated but not assigned.

46. A process cost system has one work in process account for each process.

47. In process cost systems, costs are summarized on job cost sheets.

48. Unit costs are not computed in process cost systems.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

45. Which of the following is correct regarding cost systems?

Job Order Process

1. Work in process account several one for each process

2. Work in process account one one

3. Work in process account one one for each process

4. Work in process account several one

Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

46. In a process cost system, unit costs are determined using a

47. numerator of costs of each job.

48. denominator of units produced during the period.

49. denominator of units produced for the job.

50. denominator of units produced for the day.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

47. In process cost accounting, manufacturing costs are summarized on a

48. job order cost sheet.

49. process order cost sheet.

50. production cost report.

51. manufacturing cost sheet.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

48. Which of the following manufacturing cost elements occurs in a process cost system?

49. Direct materials.

50. Direct labor.

51. Manufacturing overhead.

52. All of these.

Ans: D, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

49. In a process cost system, product costs are summarized:

50. on job cost sheets.

51. on production cost reports.

52. after each unit is produced.

53. when the products are sold.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

50. When manufacturing overhead costs are assigned to production in a process cost system, they are debited to

51. the Finished Goods Inventory account.

52. Cost of Goods Sold.

53. a Manufacturing Overhead account.

54. a Work in Process account.

Ans: D, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

51. A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed. Costs transferred out of the Baking Department will be transferred to:

52. Finished Goods Inventory.

53. Cost of Goods Sold.

54. Work in Process—Packaging Department.

55. Manufacturing Overhead.

Ans: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

52. Which of the following would not appear as a debit in the Work in Process account of a second department in a two stage production process?

53. Materials used.

54. Overhead applied.

55. Labor assigned.

56. Cost of products transferred out.

Ans: D, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

53. Materials requisitions are:

54. not used in process costing.

55. generally used more frequently in process costing than job order costing.

56. generally used less frequently in process costing than job order costing.

57. used more frequently by latter stage production departments.

Ans: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

54. A primary driver of overhead costs in continuous manufacturing operations is:

55. direct labor dollars.

56. direct labor hours.

57. machine hours.

58. machine maintenance dollars.

Ans: C, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

55. Price Company assigns overhead based on machine hours. The Milling Department logs 2,400 machine hours and Cutting Department shows 4,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show a

56. debit to Manufacturing Overhead for $32,000.

57. credit to Work in Process—Cutting Department for $20,000.

58. debit to Work in Process for $20,000.

59. credit to Manufacturing Overhead for $32,000.

Ans: D, LO: 2, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

56. Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending work in process at 80% completion and 32,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?

57. 42,000.

58. 40,000.

59. 8,000.

60. 30,000.

Ans: D, LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

57. 20,000 units in a process that are 70% complete are referred to as:

58. 20,000 equivalent units of production.

59. 8,000 equivalent units of production.

60. 14,000 equivalent units of production.

61. 6,000 equivalent units of production.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

58. A process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:

59. 85,000 equivalent units.

60. 135,000 equivalent units.

61. 100,000 equivalent units.

62. 70,000 equivalent units.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Business Economics

59. A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?

60. 98,000 equivalent units.

61. 82,000 equivalent units.

62. 70,000 equivalent units.

63. 90,000 equivalent units.

Ans: D, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

60. A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?

61. 70,000 equivalent units.

62. 82,000 equivalent units.

63. 78,000 equivalent units.

64. 90,000 equivalent units.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

61. Equivalent units are calculated by

62. multiplying the percentage of work done by the equivalent units of output.

63. dividing physical units by the percentage of work done.

64. multiplying the percentage of work done by the physical units.

65. dividing equivalent units by the percentage of work done.

Ans: C, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

62. Minor Company had the following department data:

Physical Units

Work in process, July 1 30,000

Completed and transferred out 165,000

Work in process, July 31 45,000

Materials are added at the beginning of the process. What is the total number of equivalent units for materials in July?

1. 165,000.

2. 180,000.

3. 240,000.

4. 210,000.

Ans: D, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

63. Corsi Company had the following department data:

Physical Units

Work in process, beginning -0-

Completed and transferred out 90,000

Work in process, ending 7,000

Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?

1. 90,000.

2. 9,000.

3. 97,000.

4. 83,000.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

64. Gantner Company had the following department information about physical units and percentage of completion:

Physical Units

Work in process, May 1 (60%) 60,000

Completed and transferred out 180,000

Work in process, May 31 (40%) 50,000

If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May?

1. 240,000.

2. 230,000.

3. 224,000.

4. 200,000.

Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

65. It is necessary to calculate equivalent units of production in a department because

66. a physical count of units is impossible.

67. some units worked on in the department are not fully complete.

68. the physical units in the department are always 100% complete.

69. at times a department may use a job order cost system and then switch to a process cost system.

Ans: B, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

66. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?

67. 90,000 units.

68. 80,000 units.

69. 100,000 units.

70. 110,000 units.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

67. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June were

68. 100,000 equivalent units.

69. 110,000 equivalent units.

70. 114,000 equivalent units.

71. 90,000 equivalent units.

Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

68. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

69. 90,000 equivalent units.

70. 104,000 equivalent units.

71. 100,000 equivalent units.

72. 110,000 equivalent units.

Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

69. A process with no beginning work in process, completed and transferred out 35,000 units during a period and had 14,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs?

70. 42,000 equivalent units.

71. 49,000 equivalent units.

72. 56,000 equivalent units.

73. 28,000 equivalent units.

Ans: A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

70. A process with 1,600 units of beginning work in process, completed and transferred out 25,000 units during a period. There were 10,000 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How much is equivalent units of production for the period for material costs?

71. 29,000 equivalent units.

72. 35,000 equivalent units.

73. 27,000 equivalent units.

74. 33,000 equivalent units.

Ans: D, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

71. Hanker Company had the following department data on physical units:

Work in process, beginning 3,000

Completed and transferred out 18,000

Work in process, ending 2,400

Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?

600. 18,600.

601. 2,400.

602. 20,400.

603. 15,000.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

72. Super-Tech Industries had the following department information about physical units and percentage of completion:

Physical Units

Work in process, June 1 (75%) 8,000

Completed and transferred out 22,000

Work in process, June 30 (50%) 12,000

If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during June?

1. 19,000.

2. 34,000.

3. 36,000.

4. 28,000.

Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

73. Gloria Company had no beginning work in process. During the period, 16,000 units were completed, and there were 1,200 units of ending work in process. How many units were started into production?

74. 17,200.

75. 16,000.

76. 14,800.

77. 1,200.

Ans: A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

74. Cohen Company is trying to determine the equivalent units for conversion costs with 5,000 units of ending work in process at 80% completion and 45,000 units that are 100% complete as to materials. There are no beginning units in the department. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the entire production period. What is the equivalent units of production for conversion costs for the current period?

75. 50,000.

76. 49,000.

77. 4,000.

78. 44,000.

Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

75. If beginning work in process is 4,000 units, ending work in process is 2,000 units, and the units accounted for equals 15,000 units, what must units started into production be?

76. 19,000.

77. 17,000.

78. 11,000.

79. 13,000.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

76. The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process 50,000 units (40% complete). Assuming materials are entered at the beginning of the process, equivalent units for materials are:

77. 500,000.

78. 425,000.

79. 450,000.

80. 525,000.

Ans: A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

77. The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process 50,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

78. 500,000.

79. 455,000.

80. 470,000.

81. 450,000.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

78. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete). Assuming materials are entered at the beginning of the process, equivalent units for materials are:

79. 770,000.

80. 650,000.

81. 690,000.

82. 810,000.

Ans: A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

79. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

80. 770,000.

81. 810,000.

82. 722,000.

83. 650,000.

Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

80. Crawford Company has the following equivalent units for July: materials 20,000 and conversion costs 18,000. Production cost data are:

Materials Conversion

Work in process, July 1 $ 6,400 $ 3,000

Costs added in July 50,400 42,000

The unit production costs for July are:

Materials Conversion Costs

2. $2.52 $2.50

3. 2.84 2.33

4. 2.52 2.33

5. 2.84 2.50

Ans: D, LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

81. In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, transferred out 24,000 units, and had an ending work in process of 3,000 units. How many units were started by Moyer during the month?

82. 18,000.

83. 21,000.

84. 24,000.

85. 27,000.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

82. In the Shaping Department of Rollins Company the unit materials cost is $5.00 and the unit conversion cost is $3.00. The department transferred out 40,000 units and had 5,000 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is

83. $8,000.

84. $25,000.

85. $28,000.

86. $40,000.

Ans: C, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

83. Holton Company has the following equivalent units for July: materials 20,000 and conversion 18,000. Production cost data are:

Materials Conversion

Work in process, July 1 $ 8,000 $ 3,750

Costs added in July 63,000 52,500

The unit production costs for July are:

Materials Conversion Costs

3. $3.15 $3.13

4. 3.55 2.92

5. 3.15 2.92

6. 3.55 3.13

Ans: D, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

84. In Kapler Company, the Cutting Department had beginning work in process of 8,000 units, transferred out 25,000 units, and had an ending work in process of 4,000 units. How many units were started by Kapler during the month?

85. 17,000.

86. 21,000.

87. 25,000.

88. 29,000.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

85. In the Shaping Department of Jenkins Company the unit materials cost is $3.00 and the unit conversion cost is $1.80. The department transferred out 8,000 units and had 2,000 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is

86. $1,920.

87. $6,000.

88. $6,720.

89. $9,600.

Ans: C, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

86. Cinder Company had the following department information for the month:

Total materials costs $ 60,000

Equivalent units of materials 10,000

Total conversion costs $90,000

Equivalent units of conversion costs 20,000

How much is the total manufacturing cost per unit?

10. $10.50.

11. $5.00.

12. $4.50.

13. $6.00.

Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

87. Materials costs of $600,000 and conversion costs of $642,600 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 100,000 units were started into production in September, and there were 8,000 units in ending work in process that were 40% complete at the end of September.

What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September?

1. $552,000.

2. $1,173,000.

3. $1,242,600.

4. $1,275,600.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

88. Materials costs of $600,000 and conversion costs of $642,600 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 100,000 units were started into production in September, and there were 8,000 units in ending work in process that were 40% complete at the end of September.

What was the total amount of manufacturing costs assigned to the 8,000 units in the ending work in process?

1. $48,000.

2. $21,600.

3. $40,800.

4. $69,600.

Ans: D, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

89. Charley Company’s Assembly Department has materials cost at $2 per unit and conversion cost at $4 per unit. There are 20,000 units in ending work in process, all of which are 70% complete as to conversion costs and 100% complete as to materials. How much are total costs to be assigned to inventory?

90. $56,000.

91. $96,000.

92. $84,000.

93. $120,000.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

90. Byrd Company decided to analyze certain costs for June of the current year. Units started into production equaled 14,000 and ending work in process equaled 2,000 units. With no beginning work in process inventory, how much is the conversion cost per unit if ending work in process was 25% complete and total conversion costs equaled $52,500?

91. $3.28.

92. $4.38.

93. $4.20.

94. $2.10.

Ans: C, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

91. Long Company has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 6,000 and ending work in process equaled 400 units. Long had no beginning work in process inventory. Conversion costs are applied equally throughout production, and materials are applied at the beginning of the process. How much is the materials cost per unit if ending work in process was 25% complete and total materials costs equaled $18,000?

92. $3.00.

93. $3.16.

94. $11.25.

95. $2.81.

Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

92. Conversion cost per unit equals $7.00. Total materials costs are $80,000. Equivalent units are 20,000. How much is the total manufacturing cost per unit?

93. $11.00.

94. $7.00.

95. $4.00.

96. $3.00.

Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

93. Physical units are 40,000. Total conversion costs are $158,000. There are 1,000 units in ending inventory which are 50% complete as to conversion costs. How much are conversion costs per unit?

94. $4.00.

95. $3.95.

96. $7.90.

97. $3.85.

Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

94. Madison Industries has equivalent units of 8,000 for materials and for conversion costs. Total manufacturing costs are $200,000. Total materials costs are $150,000. How much is the conversion cost per unit?

95. $2.50.

96. $6.25.

97. $25.00.

98. $5.00.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

95. Equivalent units for materials total 40,000. There were 32,000 units completed and transferred out. Equivalent units for conversion costs equal 36,000. How much are the physical units for conversion costs if ending work in process is 50% complete?

96. 36,000.

97. 40,000.

98. 8,000.

99. 32,000.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

96. If equivalent units are 15,000 for conversion costs and units transferred out equals 10,000, what stage of completion should the ending work in process be for the 20,000 units remaining?

97. 75%.

98. 25%.

99. 10%.

100. 20%.

Ans: B, LO: 4, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

97. In the month of April, a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $60,000 of materials costs and $45,000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 10,000 units were completed and transferred to the finished goods inventory and there were 2,000 units that were 25% complete in the ending work in process inventory on April 30. During April, manufacturing costs charged to the department were: Materials $1,380,000; Conversion costs $1, 530,000.

The cost assigned to the units transferred to finished goods during April was

1. $2,700,000.

2. $2,715,000.

3. $2,820,000.

4. $2,685,000.

Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

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Managerial Accounting Tools For Business And Decision Making 7th Edition by Jerry J. Weygandt -Kimmel – Test Bank

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PROCESS COSTING

Summary of Questions by Learning Objectives and Bloom’s Taxonomy

True-False Statements

Multiple Choice Questions

Brief Exercises

Summary of Questions by learning Objectives and Bloom’s Taxonomy

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Completion Statements

SUMMARY OF learning OBJECTIVES BY QUESTION TYPE

CHAPTER LEARNING OBJECTIVES

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