Test Bank - Chapter 4 Process Costing.doc

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Chapter 4

Systems Design: Process Costing

True/False 1.

T Easy

The following journal entry would be made in a processing costing system when units that have been completed with respect to the work done in Processing Department Z are transferred from Processing Department Z to Processing Department Y:

Work in Process, Department Y ... XXX Work in Process, Department Z ... XXX 2.

F Easy

The following journal entry would be made in a processing costing system when units that have been completed with respect to the work done in the final processing department are transferred to the finished goods warehouse:

Finished Goods ... XXX Materials ... XXX 3.

T Hard

Appendix) The "Quantity schedule" and the "Costs to be accounted for" sections of the production report are the same for the weighted-average method and the FIFO method of process costing.

4. F Easy

In process costing, the same equivalent units figure is used for both materials and conversion costs.

5. F Hard

(Appendix) The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no ending work in process inventory.

6. T Medium

(Appendix) The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work in process inventory. 7.

F Medium

When assigning costs to partially completed units in the ending work in process inventory, it is not necessary to consider the percentage completion of the units under the weighted-average method.

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8. T Medium

When computing the cost per equivalent unit, it is not necessary to consider the percentage completion of the units in beginning inventory under the weighted-average method.

9. T Easy

(Appendix) Under the FIFO process costing method, the equivalent units of production in the production report relate only to work done during the current period.

10. F Medium

(Appendix) The cost per equivalent unit under the FIFO method of process costing is equal to the cost of beginning work in process inventory plus the costs added during the period, all divided by the equivalent units of production for the period.

11. F Medium

The weighted-average method of process costing can only be used if materials are added at the beginning of the production process. 12.

T Medium

A manufacturer of blank CDs would ordinarily use process costing rather than job-order costing.

13. T Easy

In order to use process costing, the output of a processing department must be homogeneous.

14. T Easy

In process costing, costs are accumulated in processing departments, rather than by job.

15. F Easy

If all units go through all processing departments then the processing departments are arranged in a parallel, rather than sequential, fashion.

Multiple Choice 16.

C Hard

(Appendix) All of the following are correct in referring to a production report except:

a. The quantity schedule deals with whole units.

b. The total "Costs to be accounted for" must equal the total cost of the units completed and transferred out plus the cost of the ending work in process inventory.

c. The equivalent units in the ending work in process inventory will be different if the weighted-average method is used than it is if the FIFO method is used.

d. The total of the "Units to be accounted for" will equal the total of the "Units accounted for".

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17. D Hard CPA adapted

Assuming that there was no beginning work in process inventory, and the ending work in process inventory is 50% complete with respect to conversion costs, the number of equivalent units of production with respect to conversion costs under the weighted-average method would be:

a. the same as the units completed.

b. the same as the units started during the period. c. less than the units completed.

d. less than the units started during the period. 18.

B Hard

(Appendix) All production costs have been steadily rising in the Donner Company for several periods. The company maintains large work in process inventories. Donner Company's cost per equivalent unit computed using the FIFO method would be:

a. the same as that computed under the weighted-average method. b. higher than that computed under the weighted-average method. c. lower than that computed under the weighted-average method. d. could be the lower than, the same as, or higher than that

computed under the weighted-average method. 19.

C Medium

(Appendix) If a company uses two different unit cost figures to cost transfers from one department to another under a process costing system, then it is reasonable to assume that:

a. there was no beginning work in process inventory.

b. processing centers are arranged in a sequential pattern. c. the FIFO cost method is being used.

d. the weighted-average cost method is being used. 20.

A Easy

Process costing would be appropriate for each of the following except: a. custom furniture. b. oil refining. c. grain milling. d. newsprint production. 21. B Hard

An operation costing system is:

a. identical to a process costing system except that actual

manufacturing overhead costs are traced to units of product. b. the same as a process costing system except that direct materials costs are accounted for in the same way as in job order costing. c. the same as a job order system except that direct materials

costs are accounted for in the same way as in process costing.

d. identical to a job order costing system except that actual manufacturing overhead costs are traced to units of product.

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22. D Medium CMA adapted

Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:

Materials Units Cost Work in process on October 1 ... 6,000 P 3,000 Units started during October ... 50,000 P25,560 Units completed and transferred to

the next Department during October ... 44,000

What was the materials cost of work in process at October 31? a. P3,060 b. P5,520 c. P6,000 d. P6,120 23. A Medium

David Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units that were 80% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was P123,200. An additional 65,000 units were started into production during the month. There were 19,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of

P389,250 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 off to three decimal places.)

a. P7.547 b. P7.700 c. P4.634 d. P5.988

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24. A Medium

Larner 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:

Percentage Units complete Beginning work in process inventory ... 24,000 40% Started into production during June ... 86,000

Ending work in process inventory ... 19,000 20%

According to the company's records, the conversion cost in beginning work in process inventory was P68,064 at the beginning of June. Additional conversion costs of P585,324 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

a. P6.892 b. P6.806 c. P5.575 d. P7.090 25. C Hard CPA adapted

Glo Co., a manufacturer of combs, uses the weighted-average method in its process costing system. The company sold 125,000 units during the month of April. There is only one processing department. The following additional information is provided:

Inventory at April 1:

Work in process ... None Finished goods ... 37,500 units Inventory at April 30:

Work in process (75% complete

as to conversion costs)... 8,000 units Finished goods ... 30,000 units

What were the equivalent units of production for conversion costs for April?

a. 126,500 b. 125,500 c. 123,500 d. 117,500

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26. D Hard

The Morgan Company uses the weighted-average method in its process costing system. For a particular department, the company had 54,000 equivalent units of production with respect to conversion costs in March. There were 7,500 units in the department's beginning work in process inventory, two thirds complete with respect to conversion costs. During March, 52,500 units were started and 50,000 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 2,500 units.

c. was 65% complete with respect to conversion costs. d. was 40% complete with respect to conversion costs. 27.

B Medium

The following data were taken from the accounting records of the Hazel Corporation which uses the weighted-average method in its process costing system:

Beginning work in process inventory (100% complete as to materials;

70% complete as to conversion) ... 30,000 units Started in process during the period ... 90,000 units Ending work in process inventory

(100% complete as to materials;

60% complete as to conversion) ... 20,000 units The equivalent units of production for conversion costs was: a. 102,000 units. b. 112,000 units. c. 111,000 units. d. 100,000 units. 28. B Medium

Baker Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work in process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were

transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work in process inventory of the Assembly Department that were 90% complete with respect to conversion costs.

What were the equivalent units of production for conversion costs in the Assembly Department for the month?

a. 94,700 b. 101,900 c. 98,000 d. 92,000

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29. C Medium

Jawson Company uses the weighted-average method in its process costing system. Operating data for the Painting Department for the month of April appear below:

Percentage Units complete Beginning work in process inventory ... 6,300 10% Transferred in from the prior

department during April ... 65,600

What were the equivalent units of production for conversion costs in the Painting Department for April?

a. 67,300 b. 68,820 c. 70,520 d. 63,900 30. C Medium

Sarver Company uses the weighted-average method in its process costing system. The Fitting Department is the second department in its

production process. The data below summarize the department's operations in March.

department during March ... 61,000

The Fitting Department's production report indicates that the cost per equivalent unit for conversion cost for March was P8.24.

How much conversion cost was assigned to the units transferred out of the Fitting Department during March?

a. P482,287.20 b. P502,640.00 c. P523,240.00 d. P561,144.00

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31. B Medium

The Nichols Company uses the weighted-average method in its process costing system. The company recorded 29,500 equivalent units of production 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. 32. B Easy

The Assembly Department started the month with 35,000 units in its beginning work in process inventory. An additional units 472,000 were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 34,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month? a. 507,000 b. 473,000 c. 471,000 d. 541,000 33. A Medium CPA adapted

Huffer Company uses the weighted-average method in its process costing system. The following information pertains to Processing Department D for the month of May:

Number Cost of of units materials Beginning work in process .... 30,000 P11,000 Started in May ... 80,000 P36,000 Units completed ... 85,000

Ending work in process ... 25,000

All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:

a. P0.43. b. P0.45. c. P0.55. d. P0.59.

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34. D Medium

Harker Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 16,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was P29,440. An additional 59,000 units were started into production during the month and 61,000 units were completed in the Welding Department and transferred to the next processing department. There were 14,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of P246,400 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 off to three decimal places.)

a. P4.176 b. P4.600 c. P3.375 d. P4.421 35. A Medium

Paxton Company uses the weighted-average method in its process costing system. The Molding Department is the second department in its

production process. The data below summarize the department's operations in January.

department during January ... 57,000 Completed and transferred to the next

department during January ... 50,300

The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was P10,973 and a total of P268,107 in conversion costs were incurred in the department during January.

What was the cost per equivalent unit for conversion costs for January in the Molding Department? (Round off to three decimal places.)

a. P5.348 b. P4.038 c. P5.080 d. P4.704

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36. D Easy

The Richmond 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 August 31 consisted of 18,000 units. The units in 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 August was P2.75 for materials and P4.25 for labor and overhead, the total cost assigned to the ending work in process inventory was: a. P126,000. b. P 75,600. c. P 80,100. d. P 95,400. 37. D Hard CPA adapted

(Appendix) On November 1, Yankee Company had 20,000 units of work in process in Department No. 1 that were 100% complete with respect to material costs and 20% complete with respect to conversion costs. During November, 160,000 units were started in Department No. 1 and 170,000 units were completed and transferred to Department No. 2. The work in process on November 30, was 100% complete with respect to material costs and 40% complete with respect to conversion costs. By what amount would the equivalent units of production for conversion costs for the month of November differ if the FIFO method were used instead of the weighted-average method?

a. 20,000 decrease. b. 16,000 decrease. c. 8,000 decrease. d. 4,000 decrease. 38. D Easy

Fabian Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 90,000 units were

transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 87,000 units were completed in the Assembly Department and transferred to the next processing department. There were 12,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs.

a. 93,000 b. 83,100 c. 87,000 d. 89,400

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39. C Easy

Narver Company uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below:

department during October ... 40,100 Completed and transferred to the next

department during October ... 37,100

What were the equivalent units of production for conversion costs in the Lubricating Department for October?

a. 43,100 b. 37,100 c. 44,780 d. 47,780 40. B Hard

Black Company uses the weighted-average method in its process costing system. The company's ending work in process inventory consists of 5,000 units, 80% complete with respect to materials and 50% complete with respect to labor and overhead. If the total Peso value of the inventory is P60,000 and the cost per equivalent unit for labor and overhead is P8.00, the cost per equivalent unit for materials must be: a. P5.00.

b. P10.00. c. P8.00. d. P4.00.

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41. B Hard

Department 2 is the second of three sequential processes. All materials are added at the beginning of processing in Department 2. During October, Department 2 reported the following data:

Number of Conversion Costs Units Percentage Completed Units started ... 60,000

Completed and transferred 50,000 -Work in process, October 1 26,000 60% Work in process, October 31 36,000 20%

Costs for October: Transferred In Materials Conversion Costs Work in process,

October 1 ... P45,000 P 25,000 P 54,000 Added during

the month ... P81,000 P115,000 P315,000

The company uses the weighted-average method in its process costing system. The cost per equivalent unit on the production report for conversion costs would have been to the nearest cent:

a. P5.51. b. P6.45. c. P6.30. d. P7.38. 42. B Medium

Overland, Inc., uses the weighted-average method in its process costing system. The company’s work in process inventory on April 30 consists of 25,000 units. The units in the ending inventory are 100% complete with respect to materials and 75% complete with respect to conversion costs. If the cost per equivalent unit is P3.00 for

materials and P5.50 for conversion costs, the total cost in the April 30 work in process inventory is:

a. P212,500. b. P178,125. c. P159,375. d. P109,375.

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43. D Medium

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 P30,000. During the month, 50,000 units were transferred out. The equivalent unit cost was computed to be P2.00 for materials and P3.70 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:

a. P255,000. b. P270,000. c. P240,000. d. P285,000. 44. A Medium CPA adapted

Ogden Company uses the weighted-average method in its process costing system. Information for the month of January concerning Department A, the first stage of the company’s production process, follows:

Materials Conversion Cost Work in process, beginning ... P 8,000 P 6,000 Current added during January .... P40,000 P32,000 Equivalent units of production .. 100,000 95,000 Cost per equivalent unit ... P 0.48 P 0.40 Units completed and transferred

to the next department ... 90,000 units Work in process, ending ... 10,000 units

Materials are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. What cost would be recorded for the ending work in process inventory?

a. P6,800 b. P8,800 c. P3,400 d. P4,400 45. B Easy

Trapp Company uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,000 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as P10,000. During the period, 9,000 units were completed and transferred on to the next department. The costs per equivalent unit for the period were P2.00 for material and P3.00 for conversion costs. The cost of units transferred out during the month was:

a. P39,600. b. P45,000. c. P45,400. d. P35,400.

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46. B Hard

Strap Company uses the weighted-average method in its process costing system. The company has only one processing department. The ending work in process inventory consists of 10,000 units, 60% complete with respect to materials. The total Peso value of this inventory is P38,000. The costs per equivalent unit are P5.00 for materials and P4.00 for conversion costs for the period. With respect to conversion costs, the ending work in process inventory is:

a. 10% complete. b. 20% complete. c. 38% complete. d. 30% complete. 47. A Easy

Rariton Company uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's

operations in January.

department during January ... 78,000 Completed and transferred to the next

department during January ... 80,900

The Molding Department's production report indicates that the cost per equivalent unit for conversion cost for January was P5.37.

How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

a. P4,081.20 b. P10,203.00 c. P10,310.40 d. P6,121.80 48. D Medium

(Appendix) Ebis Company uses the FIFO method in its process costing system. The first processing department, the Welding Department, started the month with 13,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was P12,610. An additional 89,000 units were started into production during the month. There were 22,000 units in the ending work in process inventory of the Welding Department that were 30% complete with respect to conversion costs. A total of P806,085 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 on the department's production report? (Round off to three decimal places.) a. P8.026 b. P9.700 c. P9.057 d. P9.450 49. C Medium

(Appendix) Marten Company uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below:

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According to the company's records, the conversion cost in beginning work in process inventory was P83,600 at the beginning of September. Additional conversion costs of P427,682 were incurred in the

department during the month.

What would be the cost per equivalent unit for conversion costs for September on the Casting Department's production report? (Round off to three decimal places.)

a. P5.498 b. P5.779 c. P5.620 d. P5.500

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50. C Hard

(Appendix) Herston Company uses the FIFO method in its process costing system. The beginning work in process inventory in a particular department consisted of 6,000 units, two-thirds complete with respect to conversion costs. During the month, 42,000 units were started and 40,000 units were completed and transferred out of the department. The company had 40,000 equivalent units of production for conversion costs. The ending work in process inventory in the department consisted of:

a. 8,000 units, 25% complete with respect to conversion costs. b. 0 units.

c. 8,000 units, 50% complete with respect to conversion costs. d. 4,000 units, 100% complete with respect to conversion costs. 51.

B Medium

(Appendix) Carson Company uses the FIFO method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. An additional 74,000 units were

transferred in from the prior department during the month to begin processing in the Assembly Department. There were 8,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs.

a. 72,000 b. 75,600 c. 76,000 d. 76,800 52. A Medium

(Appendix) Karmen Company uses the FIFO method in its process costing system. Operating data for the Enameling Department for the month of May appear below:

department during May ... 87,000

What were the equivalent units of production for conversion costs in the Enameling Department for May?

a. 85,000 b. 85,960 c. 93,200 d. 80,800

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53. A Medium

(Appendix) Creer Company uses the FIFO method in its process costing system. Department A had 20,000 units in process at the beginning of January, that were 40% complete with respect to conversion costs. All materials are added at the beginning of the process in Department A. The January 1 work in process inventory in Department A contained P10,000 in materials cost and P11,600 in conversion cost. During January, materials costs were P0.50 per equivalent unit and conversion costs were P1.50 per equivalent unit. All of the units in the

beginning work in process inventory were completed and transferred out during the month. What was the total cost attached to these units when they were transferred to the next department?

a. P39,600. b. P33,600. c. P45,600. d. P37,600. 54. C Medium

(Appendix) Mukluk Company uses the FIFO method in its process costing system. The conversion cost for the month of April is P5.00 per equivalent unit and the material cost is P2.90 per equivalent unit. At the beginning of the month, 1,000 units were in process that were 100% complete with respect to materials and 30% complete with respect to conversion, with a total cost at that point of P2,400. If these units are fully complete by the end of the month, their total cost will be: a. P3,500. b. P3,900. c. P5,900. d. P8,000. 55. A Medium

(Appendix) Index Company uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 17,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was P9,010. An additional 76,000 units were started into production during the month and 83,000 units were completed and transferred to the next processing department. There were 10,000 units in the ending work in process inventory of the Forming Department that were 70% complete with respect to conversion costs. A total of P445,915 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 on the Forming Department's production report? (Round off to three decimal places.)

a. P5.050 b. P5.300 c. P5.867 d. P5.150

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56. A Medium

(Appendix) Qart Company uses the FIFO method in its process costing system. Operating data for the Cutting Department for the month of March appear below:

department during March ... 74,000 Completed and transferred to the next

According to the company's records, the conversion cost in beginning work in process inventory was P1,656 at the beginning of March. Additional conversion costs of P129,960 were incurred in the department during the month.

What would be the cost per equivalent unit for conversion costs for March on the Cutting Department's production report? (Round off to three decimal places.)

a. P1.710 b. P1.677 c. P1.756 d. P1.840 57. B Medium

(Appendix) Roger Company uses the FIFO method in its process costing system. The following data are taken from the accounting records of a particular department for June:

Beginning work in process inventory:

Cost ... P17,500 Units ... 20,000 units Percentage completion:

Materials ... 100% Conversion ... 60% Units completed and transferred out .... 75,000 units Cost per equivalent unit:

Material ... P1.75 Conversion ... P0.50

The cost of the 75,000 units transferred out of the department during June is:

a. P151,250. b. P145,250. c. P131,500. d. P168,750.

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58. A Medium

(Appendix) Winkle Company uses the FIFO method in its process costing system. At the beginning of March, the work in process inventory in the Blending Processing Center consisted of 5,000 units, 90% complete with respect to conversion costs. At the end of the month, the work in process inventory consisted of 2,000 units that were 60% complete with respect to conversion costs. If 10,000 units were transferred to the next processing center during the month, the equivalent units of production for conversion costs were:

a. 6,700 units. b. 11,700 units. c. 10,300 units. d. 13,000 units. 59. B Easy CPA adapted

(Appendix) Winder Company uses the FIFO method in its process costing system. Department One is the first stage of the company's production process. The following information pertains to conversion costs for April for Department One:

Units Work in process, beginning (40% complete) ... 40,000 Started in April ... 320,000 Completed in April and transferred to Department Two .. 340,000 Work in process, ending (60% complete) ... 20,000 The equivalent units of production for conversion costs are: a. 320,000. b. 336,000. c. 352,000. d. 360,000. 60. D Medium

(Appendix) Garson Company uses the FIFO method in its process costing system. The Grinding Department started the month with 18,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. An additional 98,000 units were

transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 115,000 units were completed in the Grinding Department and transferred to the next processing department. There were 1,000 units in the ending work in process inventory of the Grinding Department that were 20% complete with respect to conversion costs.

What were the equivalent units of production for conversion costs in the Grinding Department for the month?

a. 81,000 b. 115,200 c. 115,000 d. 113,400

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61. D Medium

(Appendix) Oxyrom Company uses the FIFO method in its process costing system. Operating data for the Brazing Department for the month of November appear below:

department during November ... 46,700 Completed and transferred to the next

department during November ... 43,200

What were the equivalent units of production for conversion costs in the Brazing Department for November?

a. 49,040 b. 50,200 c. 43,200 d. 48,280 62. C Medium

(Appendix) Tarten Company uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below:

department during March ... 57,000 Completed and transferred to the next

According to the company's records, the conversion cost in beginning work in process inventory was P7,470 at the beginning of March. The cost per equivalent unit for conversion costs for March was P8.20. How much conversion cost would be assigned to the units completed and transferred out of the department during March?

a. P525,530 b. P592,040 c. P533,090 d. P533,000

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Reference: 4-1

A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is applied. There was no beginning work in process inventory in the Forming Department in May. The Forming Department began manufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming Department for the month of May were as follows:

Direct materials ... P33,000 Conversion costs ... P17,000

A total of 8,000 bats were completed and transferred to the Finishing Department during May. The ending work in process inventory was 100% complete with respect to direct materials and 25% complete with respect to conversion costs. The company uses the weighted-average method of process costing.

63. D Medium CMA adapted Refer To: 4-1

The cost of the units transferred to the Finishing Department during May was: a. P50,000. b. P40,000. c. P53,000. d. P42,400. 64. A Medium CMA adapted Refer To: 4-1

The cost of the work in process inventory in the Finishing Department at the end of May was:

a. P7,600. b. P10,000. c. P2,500. d. P4,000.

Reference: 4-2

Adam Company uses the weighted-average method in its process costing system. The following information for the Assembly Department was obtained from the accounting records for September (all materials are added at the beginning of the process): Number Labor and Overhead

of Units Percent Completed Work in process inventory, Sept. 1 ... 60,000 15%

Transferred in during the month ... 105,000

Work in process inventory, Sept. 30 .. 40,000 20% Transferred Labor & In Materials Overhead Beginning work in

process inventory ... P 60,000 P30,000 P 16,000 Cost added during the month ... P115,500 P63,000 P320,000

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Reference: 4-3

Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work in process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labor and overhead. The cost per equivalent unit was P2.50 for materials and P6.25 for labor and overhead.

67. A Medium Refer To: 4-3

The total cost of the October 31 work in process inventory was: a. P41,250. b. P35,000. c. P43,750. d. P78,750. 68. B Medium Refer To: 4-3

The "Total cost to account for" section of the production report for October will show an amount equal to:

a. P110,000. b. P391,250. c. P350,000. d. P428,750. Reference: 4-4

(Appendix) The activity in Nolan Company's Blending Department for the month of April is given below:

Number Labor and Overhead of Units Percent Complete Work in process

inventory, April 1 ... 8,000 50% Started into process

during the month ... 50,000 Work in process

inventory, April 30 ... 10,000 70%

All materials are added at the beginning of processing in the Blending Department. 69.

A Medium Refer To: 4-4

(Appendix) The equivalent units of production for material for the month, using the FIFO method, are:

a. 50,000 units. b. 58,000 units. c. 54,000 units. d. 60,000 units. 70. B Medium Refer To: 4-4

(Appendix) The equivalent units of production for labor and overhead for the month, using the FIFO method, are:

a. 47,000 units. b. 51,000 units. c. 5,000 units. d. 54,000 units. 71. C Medium Refer To: 4-4

The equivalent units of production for material for the month, using the weighted-average method, are:

a. 48,000 units. b. 50,000 units. c. 58,000 units. d. 52,000 units. 72. D Medium Refer To:

The equivalent units of production for labor and overhead for the month, using the weighted-average method, are:

a. 50,000 units. b. 51,000 units.

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4-4 c. 47,000 units. d. 55,000 units. Reference: 4-5

Activities in the Challenger Company’s Assembly Department for the month of March follow:

Number Percent Complete Units Materials Conversion Work in process inventory, March 1 5,000 65% 30% Started into production during March 65,000

Work in process inventory, March 3 3,000 35% 25% 73.

C Medium Refer to: 4-5

The equivalent units of production for materials for March, using the weighted-average method, would be:

a. 65,000. b. 67,000. c. 68,050. d. 70,000. 74. A Hard Refer to: 4-5

(Appendix) The equivalent units of production for conversion for March using the FIFO method, would be:

a. 66,250. b. 67,000. c. 64,250. d. 67,750.

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Reference: 4-6

The following data relate to the Blending Department of Tru-Color Paint Company for a recent month:

Number Percent Complete of Units Conversion Costs Beginning work in process inventory ... 9,000 60%

Units started into production ... 45,000 Units completed and transferred out ... 46,000 -Ending work in process inventory ... 8,000 25%

All materials are added prior to the beginning of work in the Blending Department. 75.

B Hard Refer to: 4-6

(Appendix) Assuming that Tru-Color Paint Company uses the FIFO method, the equivalent units of production for materials would be:

a. 42,600. b. 45,000. c. 53,000. d. 46,000. 76. A Hard Refer to: 4-6

(Appendix) Assuming Tru-Color Paint Company uses the FIFO method, the equivalent units of production for conversion costs would be:

a. 42,600. b. 44,400. c. 46,000. d. 54,000. 77. C Medium Refer to: 4-6

Assuming that Tru-Color Paint Company uses the weighted-average method, the equivalent units of production for materials would be: a. 48,000. b. 46,000. c. 54,000. d. 45,000. 78. D Medium Refer to: 4-6

Assuming that Tru-Color Paint Company uses the weighted-average method, the equivalent units of production for conversion costs would be:

a. 44,400. b. 42,600. c. 46,000. d. 48,000.

(25)

Reference: 4-7

The information below was obtained from the records of the first processing department of Christine Corporation for the month of July. The company uses the weighted-average method in its process costing system.

Labor and Overhead Units Percent Completed Work in process inventory, July 1 ... 20,000 40% Started during the month ... 70,000

Completed during the month ... 80,000

Work in process inventory, July 31 ... ? 25% All materials are added at the beginning of the manufacturing process. 79.

B Medium Refer To: 4-7

The equivalent units of production for material for the month is: a. 70,000. b. 90,000. c. 80,000. d. 82,500. 80. D Medium Refer To: 4-7

The equivalent units of production for labor and overhead for the month is: a. 70,000. b. 90,000. c. 80,000. d. 82,500. Reference: 4-8

The information below was obtained from the records of the first processing department of Moore Company for the month of May. The company uses the weighted-average method in its process costing system.

Labor and Overhead Units Percentage Complete Work in process, May 1 ... 10,000 40%

Units started ... 64,000 Completed and transferred out ... 60,000

Work in process, May 31 ... 14,000 70% All materials are added at the beginning of the process. 81.

B Medium Refer To: 4-8

The equivalent units of production for materials for the month of May were:

a. 60,000 units. b. 74,000 units. c. 64,000 units. d. 69,800 units.

(26)

Beginning work in process inventory .... 11,000 35% Units started into production ... 120,000 Units completed and transferred out .... 114,000 -Ending work in process inventory ... 17,000 30%

The beginning work in process inventory included P11,000 of conversion cost. During the month, the Department incurred an additional P290,000 in conversion costs. 83.

A Medium Refer to: 4-9

Assuming that the company uses the weighted-average cost method, what are the equivalent units of production for conversion costs for the Blending Department for the month?

a. 119,100 b. 120,000 c. 114,000 d. 131,000 84. B Medium Refer to: 4-9

Assuming that the company uses the weighted-average cost method, what is the cost per equivalent unit for conversion costs for the month in the Blending Department to the nearest cent?

a. P2.55 b. P2.53 c. P2.50 d. P2.44 85. C Medium Refer to: 4-9

(Appendix) Assuming that the company uses the FIFO method, what are the equivalent units of production for conversion costs for the Blending Department for the month?

a. 119,100 b. 111,950 c. 115,250 d. 114,000

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86. A Hard Refer to: 4-9

(Appendix) Assuming that the company uses the FIFO method, what is the cost per equivalent unit for conversion costs for the month in the Blending Department to the nearest cent?

a. P2.52 b. P2.54 c. P2.44 d. P2.59 Reference: 4-10

(Appendix) Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May:

Units Beginning work in process inventory ... 16,000 Started into production during May ... 100,000 Completed during May ... 92,000 Ending work in process inventory ... 24,000

The beginning work in process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work in process

inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

Materials Conversion Beginning work in process inventory .... P54,560 P35,560 Costs incurred during May ... P468,000 P574,040 87. B Medium Type: CMA adapted Refer To: 4-10

(Appendix) Using the FIFO method, the equivalent units of production for May for materials are:

a. 82,400 units. b. 104,000 units. c. 107,200 units. d. 108,000 units. 88. D Medium CMA adapted Refer To: 4-10

(Appendix) Using the FIFO method, the equivalent units of production for May for conversion costs are:

a. 85,600 units. b. 88,800 units. c. 95,200 units. d. 98,400 units. 89. B Medium

(Appendix) Using the FIFO method, the cost per equivalent unit of materials for May is closest to:

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90. B Medium CMA adapted Refer To: 4-10

(Appendix) Using the FIFO method, the cost per equivalent unit of conversion cost for May is closest to:

a. P5.65. b. P5.83. c. P6.00. d. P6.20. 91. A Medium CMA adapted Refer To: 4-10

(Appendix) Using the FIFO method, the total cost of units in the ending work in process inventory is closest to:

a. P153,200. b. P154,800. c. P155,300. d. P157,000. 92. C Medium CMA adapted Refer To: 4-10

Using the weighted-average method, the cost per equivalent unit of materials for May is closest to:

a. P4.12. b. P4.50. c. P4.60. d. P5.03. 93. C Medium CMA adapted Refer To: 4-10

Using the weighted-average method, the cost per equivalent unit of conversion cost for May is closest to:

a. P5.65. b. P5.83. c. P6.00. d. P6.41. 94. A Medium CMA adapted Refer To: 4-10

Using the weighted-average method, the total cost of the units in ending work in process inventory is closest to:

a. P156,960. b. P86,400. c. P153,960. d. P154,800. Reference: 4-11

Reid Company uses a process costing system in which units go through several departments. In the Cutting Department for June, units in the beginning work in process inventory were 80% complete with respect to conversion costs. Units in the ending work in process inventory were 25% complete with respect to conversion costs. Other data for the department for June are as follows:

Units Conversion Cost Work in process inventory on June 1 ... 15,000 P 50,200 Units started into production ... 145,000

Conversion costs incurred during June ... P175,700 Units completed and transferred to the next

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95. B Hard Refer to: 4-11

(Appendix) Assuming that the company uses the FIFO cost method, what is the cost per equivalent unit for conversion costs for June to the nearest whole cent?

a. P1.80 b. P1.40 c. P1.64 d. P1.35 96. A Hard Refer to: 4-11

Assuming that the company uses the weighted-average method, what is the cost per equivalent unit for conversion costs for June to the nearest whole cent?

a. P1.64 b. P1.56 c. P1.74 d. P1.48 Reference: 4-12

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work in process inventory consisted of 50,000 units which were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows:

Units Conversion Costs Work in process inventory, May 1 ... 50,000 P 30,000 Units started into production ... 180,000

Conversion costs incurred during May ... P 690,000 Units completed and transferred out

during the month ... 190,000 97.

C Hard Refer to: 4-12

Assuming that Cherrington Company uses the weighted-average method, what is the cost per equivalent unit for conversion costs for May to the nearest whole cent?

a. P4.19 b. P4.00 c. P3.64 d. P3.83 98. D Hard Refer to: 4-12

(Appendix) Assuming that Cherrington Company uses the FIFO method, what is the cost per equivalent unit for conversion costs for May to the nearest cent?

a. P4.31 b. P3.49 c. P4.29 d. P4.11

(30)

Reference: 4-13

Nando Company uses the weighted-average method in its process costing system. Department J is the second of three sequential processes at the company. During October, Department J collected the following data:

Labor and Overhead Units Percentage Complete Work in process, October 1 ... 8,000 60%

Units started ... 25,000 Completed and transferred ... 20,000

Work in process, October 31 ... 13,000 20%

Labor and Costs for October: Transferred In Materials Overhead Work in process, October 1 .... P33,000 P16,500 P 31,200 Added during the month ... P59,400 P82,500 P194,800 All materials are added at the beginning of the process.

99. B Medium Refer To: 4-13

The total cost assigned to units transferred out during October was: a. P264,600. b. P316,000. c. P342,000. d. P358,400. 100. B Medium Refer To: 4-13

The total cost assigned to ending work in process inventory was: a. P75,400.

b. P101,400. c. P152,800. d. P59,000. Reference: 4-14

(Appendix) The following information was obtained from the records of the first processing department of Keith Manufacturing Company for the month of February. The company uses the FIFO method in its process costing system.

Labor and Overhead Units Percent Complete Work in process inventory, Feb. 1 ... 15,000 30%

Started in assembly during the month .... 60,000

Work in process inventory, Feb. 28 ... 20,000 20%

(31)

101. B Medium Refer To: 4-14

The equivalent units of production for material for the month is: a. 50,000. b. 60,000. c. 54,500. d. 75,000. 102. A Medium Refer To: 4-14

The equivalent units of production for labor and overhead for the month is: a. 54,500. b. 59,000. c. 95,000. d. 60,000. Essay 103. Hard

Able Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning:

Units in process ... 300 Stage of completion with respect to materials ... 60% Stage of completion with respect to conversion .. 30% Costs in the beginning inventory:

Materials cost ... P342 Conversion cost ... P2,394 Units started into production during the month .... 21,000 Units completed and transferred out ... 20,700 Costs added to production during the month:

Materials cost ... P44,136 Conversion cost ... P546,750 Work in process, ending:

Units in process ... 600 Stage of completion with respect to materials ... 80% Stage of completion with respect to conversion .. 30% Required:

Prepare a production report for the department using the weighted-average method.

(32)

Answer:

Weighted Average method:

Quantity schedule and equivalent units Quantity Schedule Units to be accounted for:

Work in process, beginning ... 300 Started into production ... 21,000 Total units ... 21,300

Equivalent units Materials Conversion Units accounted for as follows:

Transferred to next department 20,700 20,700 20,700 Work in process, ending ... 600 480 180 Total units ... 21,300 21,180 20,880 Costs per equivalent unit

Total

Cost Materials Conversion Cost to be accounted for:

Work in process, beginning.... P2,736 P342 P2,394 Cost added during the month...P590,886 P44,136 P546,750 Total cost (a) ...P593,622 P44,478 P549,144 Equivalent units (above) (b) ... 21,180 20,880 Cost per EU, (a) ÷ (b) ... P2.100 P26.300 Combined cost per EU ... P28.400

Cost reconciliation

Total Equivalent Units (above) Cost Materials Conversion Cost accounted for as follows:

Transferred out ... P587,880 20,700 20,700 Work in process, ending:

Materials ... P1,008 480

Conversion ... P4,734 180 Total work in process,

ending ... P5,742 Total cost ... P593,622

(33)

104.

Hard Barker Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Units in process ... 800 Stage of completion with respect to materials ... 50% Stage of completion with respect to conversion .. 20% Costs in the beginning inventory:

Materials cost ... P2,440 Conversion cost ... P4,928 Units started into production during the month .... 15,000 Units completed and transferred out ... 15,600 Costs added to production during the month:

Materials cost ... P96,470 Conversion cost ... 476,362 Work in process, ending:

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.

(34)

Answer:

a. through d. The answers to all of the questions can be found by filling out a production report as follows.

Equivalent units Materials Conversion d.

Units accounted for as follows:

Transferred to next department 15,600 15,600 15,600 Work in process, ending ... 200 100 180 Total units ... 15,800 15,700 15,780 Costs per equivalent unit

Total

Cost Materials Conversion Cost to be accounted for:

Work in process, beginning .. P7,368 P2,440 P4,928 Cost added during the month . P572,832 P96,470 P476,362 Total cost (a) ... P580,200 P98,910 P481,290 Equivalent units (above) (b) .. 15,700 15,780 Cost per EU, (a) ÷ (b) ... P6.300 P30.500 Combined cost per EU ... P36.800

Cost reconciliation

Total Equivalent Units (above) Cost Materials Conversion Cost accounted for as follows:

Transferred out ... P574,080 15,600 15,600 Work in process, ending:

Materials ... P630 100

Conversion ... P5,490 180 Total work in process, ending . P6,120

(35)

105.

Medium Harmon Company uses the weighted-average method in its process costingsystem. The Curing Department of Harmon Company reported the following information for the month of November.

Conversion Percentage Units Complete Work in process, November 1 ... 10,000 80% Units started ... 28,000

Completed and transferred out ... 30,000

Work in process, November 30 .... 8,000 30% Costs for November: Materials Conversion Work in process, November 1 ... P 34,500 P 48,600 Added during the month ... P146,000 P194,400 All materials are added at the beginning of the process. Required:

Compute the following items for the company's monthly production report using the weighted-average method:

a. The equivalent units of production for materials. b. The cost per equivalent unit for conversion.

c. The total cost assigned to units transferred out of the Curing Department during November.

d. The cost assigned to work in process inventory as of November 30.

Answer:

a. Units transferred out ... 30,000 Add: Equivalent units in ending

inventory (8,000 * 100%) ... 8,000 Equivalent units for materials ... 38,000 b. Units transferred out ... 30,000 Add: Equivalent units in ending

inventory (8,000 * 30%) ... 2,400 Equivalent units for conversion ... 32,400 Total conversion costs ... 243,000 (P48,600 + P194,400)/32,400 EUs = P7.50 per EU c. Materials cost per equivalent unit:

(P34,500 + P146,000)/38,000 EUs = P4.75 per EU Costs transferred out:

(36)

106.

Medium Carver Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Units in process ... 700 Stage of completion with respect to materials ... 50% Stage of completion with respect to conversion .. 40% Units started into production during the month .... 3,000 Work in process, ending:

Using the weighted-average method, determine the equivalent units of production for materials and conversion costs by compiling the "Quantity Schedule and Equivalent Units" portion of the production report.

Answer:

Units accounted for as follows:

Transferred to next department . 23,500 23,500 23,500 Work in process, ending ... 200 160 80 Total units ... 23,700 23,660 23,580

(37)

107.

Hard (Appendix) The Smith Company manufactures a product that goes through two departments prior to completion. The following information is available on work in one of these departments, the Forming Department, during March:

Percentage Completed Units Materials Conversion Work in process, March 1 ... 70,000 5/7 3/7 Started into production ... 460,000

Completed and transferred out ... 450,000

Work in process, March 31 ... 80,000 7/8 5/8

Cost in the beginning work in process inventory and cost added during the month were as follows:

Materials Conversion Work in process, March 1 ... P 42,190 P 38,000 Cost added during March ... P440,810 P 394,000 The Forming Department is the first department in the production process; after forming has been completed, the units are transferred to the Finishing Department.

Required:

1. Calculate the equivalent units and unit cost for materials and conversion costs assuming the company uses the weighted- average method (round to the nearest tenth of a cent).

2. Calculate the equivalent units and unit cost for materials and conversion costs assuming the company uses the FIFO method (round to the nearest tenth of a cent).

Answer:

Equivalent units: Weighted-average:

Materials Conversion Units completed and transferred out... 450,000 450,000 Work in process, March 31:

Materials: 80,000 x 7/8 = ... 70,000 Conversion: 80,000 x 5/8 = ... 50,000 Equivalent units... 520,000 500,000 Unit costs: Materials: (P42,190 + P440,810)/520,000 = P0.929 Conversion: (P38,000 + P394,000)/500,000 = P0.864

(38)

Equivalent units: FIFO:

Materials Conversion Work in process, March 1:

Materials: 70,000 x 2/7 = ... 20,000

Conversion:70,000 x 4/7 = ... 40,000 Started and completed during March ... 380,000 380,000 Work in process, March 31:

Materials: 80,000 x 7/8 = ... 70,000 Conversion: 80,000 x 5/8 = ... 50,000 Equivalent units ... 470,000 470,000 Unit costs: Materials: P440,810/470,000 = P0.938 Conversion: P394,000/470,000 = P0.838 108. Medium

Dita Company uses a process costing system. The following information relates to one month's activity in the company's Curing Department. Conversion

Percentage Units Complete Beginning work in process inventory .. 10,000 20% Units started ... 21,000

Units completed and transferred out .. 26,000

The conversion cost of the beginning inventory was P6,500. During the month, P112,000 in additional conversion cost was incurred.

Required:

a. (Appendix) 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:

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.

(39)

Answer: a.

1. Units transferred out ... 26,000 Deduct: equivalent units in

the beginning inventory ... 2,000 24,000 Add: equivalent units in

the ending inventory ... 4,000 Equivalent units ... 28,000 2. P112,000 ÷ 28,000 EUs = P4 per EU.

3. Beginning inventory:

Cost in the beginning inventory .. P 6,500 Completion of the units in the

beginning inventory:

P4 x 1,000 x 80% ... 32,000 Units started and completed during

the period: P4 x 16,000 units .. 64,000 Total cost transferred out ... P102,500 4. P4 per EU x 5,000 x 80% = P16,000

b.

1. Units transferred out ... 26,000 Add: equivalent units in the

ending inventory ... 4,000 Equivalent units ... 30,000 2. Cost in the opening inventory ... P 6,500 Cost incurred during the period ... 112,000 Total cost ... P118,500 P118,500 ÷ 30,000 Eus = P3.95 per EU

3. 26,000 units x P3.95 per EU = P102,700 4. P3.95 per EU x 5,000 x 80% = P15,800

(40)

109.

Hard Production and cost data for the month of February for Process A of the Packer manufacturing Company follow: Production record:

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 Units completed ... 7,000 Units in process, February 28

(100% complete with respect to materials;

1/3 complete with respect to conversion cost) ... 3,000 Cost record:

Work in process inventory, February 1:

Materials ... P600

Conversion ... 100 P 700 Costs for February:

Materials issued ... 2,560 Conversion ... 1,500 Total cost to be accounted for ... P4,760 The company uses the weighted-average cost method in its process costing system.

Required:

1. Calculate the equivalent units and unit costs for February for materials and for conversion costs.

2. Determine the cost transferred to finished goods.

3. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories. Answer:

1. Equivalent units: Materials:

Completed ... 7,000 Work in process, Feb. 28 ... 3,000 Equivalent units ... 10,000 Conversion:

Completed ... 7,000 Work in process, Feb. 28 (3,000 x 1/3) ... 1,000 Equivalent units ... 8,000 Material Conversion Unit costs:

Cost from work in process, Feb. 1 ... P 600 P 100 Cost recorded in February ... 2,560 1,500 Total cost ... P 3,160 P1,600 Equivalent units ... 10,000 8,000 Unit cost ... P 0.316 P 0.20

(41)

2. and 3.

Units completed and transferred—7,000 x P.516 ... P3,612 Work in process inventory, February 28:

Material cost: 3,000 units x 100% x P0.316 = ... 948 Conversion cost: 3,000 units x 1/3 x P0.20 = ... 200 Total cost accounted for ... P4,760 110.

Hard

Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company’s inventory and cost records for the most recently completed year revealed the following information:

Costs _ Units Materials Conversion Work in process, Jan. 1

80% complete with respect to

conversion costs ... 100,000 P100,000 P157,500 Units started into production .... 500,000

Costs added during the year:

Materials ... P650,000

Conversion ... P997,500 Units completed during the year .. 450,000

The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.

Required:

1. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs. 2. Determine the cost transferred to finished goods.

3. Determine the amount of cost that should be assigned to the ending work in process inventory.

(42)

Answer:

Equivalent units:

Materials Conversion Units completed and transferred out ... 450,000 450,000 Work in process, December 31:

Materials: 150,000 x 1.00 = ... 150,000

Conversion: 150,000 x 0.50 = ... _______ 75,000 Equivalent units ... 600,000 525,000 Unit costs:

Materials Conversion Costs in beginning work in process .... P100,000 P 157,500 Costs added during the year ... 650,000 997,500 Total ... P750,000 P1,155,000 Equivalent units ... 600,000 525,000 Unit cost ... P 1.25 P 2.20 Costs to be accounted for:

Work in process, beginning ... P 257,500 Cost added by department ... 1,697,500 Total cost to be accounted for ... P1,905,000 Cost accounted for as follows:

Transferred to finished goods:

450,000 x (P1.25 + P2.20) = ... P1,552,500 Work in process, ending:

Materials—150,000 x P1.25 = ... 187,500 Conversion—75,000 x P2.20 = ... 165,000 Total costs accounted for ... P1,905,000 Ending work in process:

Materials: ... P187,500 Conversion ... 165,000 Total ... P352,500

(43)

111.

Medium The Hardy Company manufactures a product that goes through two departments prior to completion. The following information is

available on work in one of these departments, the Molding Department, during the month of July:

Percentage Completed Units Materials Conversion Work in process, July 1 ... 50,000 3/5 2/5 Started into production ... 440,000

Completed ... 430,000

Work in process, July 31 .... 60,000 5/6 2/3 The Molding Department is the first department in the production process; after molding has been completed, the units are transferred to the Finishing Department.

Required:

Calculate the equivalent units for materials and conversion costs assuming the company uses the weighted-average method. Round to the nearest tenth of a cent.

Answer:

Equivalent units: Weighted-average:

Materials Conversion Units completed and transferred out 430,000 430,000 Work in process, July 31:

Materials: 60,000 x 5/6 = ... 50,000

Conversion: 60,000 x 2/3 = ... 40,000 Equivalent units ... 480,000 470,000

(44)

112.

Medium Sharp Company has a process costing system. The following data relate to the company's Mixing Department for a recent month: Conversion

Percentage Units of Completion Beginning work in process inventory 5,000 60% Units started into production ... 40,000

Units completed and transferred out 37,000

Ending work in process inventory .. 8,000 25% All materials are added at the beginning of the Mixing process. Required:

a. (Appendix) Compute the equivalent units of production for materials using the FIFO method.

b. (Appendix) Compute the equivalent units of production for conversion using the FIFO method.

c. Compute the equivalent units of production for materials using the weighted-average method.

d. Compute the equivalent units of production for conversion using the weighted-average method.

Answer:

a. & b. Materials Conversion Units transferred out ... 37,000 37,000 Deduct: equivalent units in beginning

inventory ... 5,000 3,000 32,000 34,000 Add: equivalent units in ending

inventory ... 8,000 2,000 Equivalent units of production ... 40,000 36,000 c. & d.

Units transferred out ... 37,000 37,000 Add: equivalent units in the ending

inventory ... 8,000 2,000 Equivalent units of production ... 45,000 39,000

(45)

113.

Hard (Appendix) Darver Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Units in process ... 100 Stage of completion with respect to materials ... 80% Stage of completion with respect to conversion .... 60% Costs in the beginning inventory:

Material cost ... P376 Conversion cost... P2,376 Units started into production during the month... 21,000 Units completed and transferred out... 20,400 Costs added to production during the month:

Material cost ... P93,645 Conversion cost... P825,531 Work in process, ending:

Units in process ... 700 Stage of completion with respect to materials ... 70% Stage of completion with respect to conversion .... 50% Required:

Prepare a production report for the department using the FIFO method. Answer:

Quantity Schedule and Equivalent Units Quantity Schedule Units to be accounted for:

Units accounted for as follows: Transferred out:

From the beginning inventory... 100 20 40 Started and completed ... 20,300 20,300 20,300 Work in process, ending ... 700 490 350 Total units ... 21,100 20,810 20,690