Ch4 Process Costing

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True/False Questions

1. In a process costing system, the costs of one processing department become part of the costs of the next processing department.

Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy

2. The equivalent units of production will be the same under the weighted-average and the FIFO method if there is no beginning work in process inventory.

Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 2,5 Level: Medium

3. Under the weighted-average method, the equivalent units used to compute the unit costs of ending inventories relate only to work done during the current period. Ans: False AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2 Level: Hard

4. In order to equitably allocate costs in a process costing system, dissimilar products are restated in terms of equivalent units by weighting the number of units produced by their market values.

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

5. In a process costing system, units transferred to the next processing department are presumed to be 100% complete with respect to the work performed by the transferring department.

6. Under a weighted-average process costing system when all materials are added at the beginning of the production process, the equivalent units for materials is equal to the units completed and transferred out.

Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Hard

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7. In calculating cost per equivalent unit under the weighted-average method, prior period costs are combined with current period costs.

8. The equivalent units of production for a department using the FIFO process costing method is equal to the number of units completed plus the equivalent units in the ending inventory.

Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Hard

9. The step-down method of cost allocation is more accurate than the direct method since the step-down method considers services that service departments provide to each other.

Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Easy

10. The step-down method and the direct method of cost allocation will result in the same amount of service department cost being allocated to a given operating department, although the step-down method is easier to apply than the direct method.

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Medium

11. The order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used. Ans: False AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting Appendix: 4B LO: 8 Level: Medium

12. The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.

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13. In a process costing system, direct labor cost combined with manufacturing overhead cost is known as conversion cost.

14. Process costing is employed in industries that produce basically homogeneous products such as bricks, flour, or cement but would not be appropriate for assembly-type operations such as those that manufacture computers.

Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 10 Level: Medium

15. Process costing is used where many different products are produced each period to customer specifications.

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 10 Level: Easy

Multiple Choice Questions

16. Which of the following statements related to job-order costing and process costing are true?

A) Under both costing methods, manufacturing overhead costs are included in the computation of unit product costs.

B) Under both costing methods, the journal entry to record the completion of production will involve crediting a work in process account.

C) Under both costing methods, the journal entry to record the cost of goods sold will involve crediting the finished goods account.

D) All of the above are true.

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Hard

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17. The completion of goods is recorded as a decrease in the work in process inventory account when using:

Job-order costing Process costing A) Yes No B) Yes Yes C) No Yes D) No No

Ans: B AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy Source: CPA, adapted 18. In process costing, a separate work in process account is kept for each:

A) individual order. B) equivalent unit.

C) processing department.

D) cost category (i.e., materials, conversion cost).

Ans: C AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy

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

A) does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production.

B) considers ending work in process inventory to be fully complete. C) will always yield a higher cost per equivalent unit.

D) All of the above.

Ans: A AACSB: Analytic AICPA BB: Critical Thinking

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20. Which of the following are needed to compute equivalent units for conversion costs under the weighted-average method of process costing?

Percentage completion of

beginning work in process Percentage completion of ending work in process

A) Yes Yes

B) No Yes

C) Yes No

D) No No

Ans: B AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

21. Malcolm Company uses a weighted-average process costing system. All materials at Malcolm are added at the beginning of the production process. The equivalent units for materials at Malcolm would be the sum of:

A) units in ending work in process and the units started. B) units in beginning work in process and the units started.

C) units in ending work in process and the units started and completed. D) units in beginning work in process and the units started and completed. Ans: B AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2 Level: Hard

22. In the computation of costs per equivalent unit, the weighted-average method of process costing considers:

A) costs incurred during the current period only.

B) costs incurred during the current period plus cost of ending work in process inventory.

C) costs incurred during the current period plus cost of beginning work in process inventory.

D) costs incurred during the current period less cost of beginning work in process inventory.

Ans: C AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 3 Level: Easy Source: CPA, adapted

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23. Which of the following are needed to compute the cost per equivalent unit for materials under the weighted-average method of process costing?

Material cost assigned to beginning

work in process last period Material cost added to production during the current period

A) Yes Yes

B) No Yes

C) Yes No

D) No No

Ans: A AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 3 Level: Medium

24. Under which of the following conditions will the FIFO method of process costing result in the same amount of cost being transferred to the next department as the weighted-average method?

A) When the beginning and ending inventories are each fifty percent complete. B) When there is no beginning inventory.

C) When there is no ending inventory.

D) When units in the beginning inventory are all completed and transferred at the same time.

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 4,7 Level: Hard Source: CMA, adapted

25. In order to compute equivalent units of production using the FIF0 method of process costing, work for the period must be broken down into parts:

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

B) completed from beginning inventory, started and completed during the month, and units in ending inventory.

C) started during the period and units transferred out during the period. D) processed during the period and units completed during the period. Ans: B AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Source: CPA, adapted

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26. Which of the following methods of allocating service departments take into account all of the effects of interdepartmental services?

Direct Step-Down A) Yes Yes B) Yes No C) No Yes D) No No

Ans: D AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Medium

27. All of the following statements are correct when referring to process costing except: A) Process costing would be appropriate for a jeweler who makes custom jewelry

to order.

B) A process costing system has the same basic purposes as a job-order costing system.

C) Units produced are indistinguishable from each other. D) Costs are accumulated by department.

Ans: A AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 10 Level: Medium

28. For which of the following would it be best to use an operation costing system? A) home remodeling

B) automobile production C) cement used for roadways D) trash bags used for yard waste

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 10 Level: Medium

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29. Health Beverage Company uses a process costing system to collect costs related to the production of its celery flavored cola. The cola is first processed in a Mixing

Department at Health and is then transferred out and finished up in the Bottling Department. The finished cases of cola are then transferred to Finished Goods Inventory. The following information relates to Health's two departments for the month of January:

Mixing Bottling Cases of cola in work in process, January 1... 10,000 3,000 Cases of cola completed/transferred out during January. 77,000 ? Cases of cola in work in process, January 31... 4,000 8,000 How many cases of cola were completed and transferred to Finished Goods Inventory during January?

A) 66,000 B) 71,000 C) 72,000 D) 74,000

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Medium

Solution:

To solve for units transferred:

+ Work in process, beginning... 3,000 + Units started into production during the month... 77,000 − Work in process, ending... 8,000 = Units completed and transferred out during the month... 72,000

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30. The Assembly Department started the month with 83,000 units in its beginning work in process inventory. An additional 334,000 units 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) 417,000

B) 285,000 C) 451,000 D) 383,000

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy

Solution:

+ Work in process, beginning... 83,000 + Units started into production during the month... 334,000 − Work in process, ending... 34,000 =Units completed and transferred out during the month.... 383,000

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31. Colby Company has a process costing system in which the weighted-average method is used. The company adds all materials at the beginning of the process in the Molding Department, which is the first of two stages of its production process. Information concerning the materials used in the Molding Department during March is as follows:

Units

Materials Costs Work in process at March 1... 22,000 $11,000 Units started during March...

90,00

0 $46,120 Units completed and transferred to next department

during March...

97,00 0 What was the materials cost of the work in process inventory at March 31? A) $11,220

B) $7,500 C) $5,100 D) $7,650

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Solution:

To solve for ending work in process:

+ Work in process, beginning... 22,000 + Units started into production during the month... 90,000 − Units completed and transferred out during the month... 97,000 = Work in process, ending... 15,000

Equivalent units of production

Materials

Transferred to next department... 97,000 Ending work in process (materials: 15,000 units × 100%

complete)... 15,000 Equivalent units of production... 112,000

Cost per Equivalent Unit

Materials

Cost of beginning work in process... $11,000 Cost added during the period... 46,120 Total cost (a)... $57,120 Equivalent units of production (b)... 112,000 Cost per equivalent unit, (a) ÷ (b)... $0.51

Materials

Ending work in process inventory:

Equivalent units of production (materials: 15,000 units × 100% complete; conversion: 15,000 units × %

complete)... 15,000 Cost per equivalent unit... $0.51 Cost of ending work in process inventory... $7,650

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32. Barnett Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in Department M. Conversion costs were 75% complete with respect to the 4,000 units in work in process at May 1 and 50% complete with respect to the 6,000 units in work in process at May 31. During May, 12,000 units were completed and transferred to the next department. An analysis of the costs relating to work in process at May 1 and to production activity for May follows:

Materials Conversion Work in process 5/1... $13,800 $3,740 Costs added during May... $42,000 $26,260 The total cost per equivalent unit for May was:

A) $5.02 B) $5.10 C) $5.12 D) $5.25

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,3 Level: Medium

Solution:

Materials Conversion

Transferred to next department... 12,000 12,000 Ending work in process (materials: 6,000 units

× 100% complete; conversion: 6,000 units ×

50% complete)... 6,000 3,000 Equivalent units of production... 18,000 15,000

Materials Conversion Total

Cost of beginning work in process... $13,800 $ 3,740 Cost added during the period... 42,000 26,260 Total cost (a)... $55,800 $30,000 Equivalent units of production (b)... 18,000 15,000

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33. Maurice 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 of its production process. Information concerning the materials used in the Forming Department in April follows:

Units

Materials Costs Work in process at April 1... 12,000 $6,000 Units started during April...

100,00

0 $51,120 Units completed and transferred to next department

during April... 88,000 What was the materials cost of the work in process at April 30? A) $6,120

B) $11,040 C) $12,000 D) $12,240

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Solution:

To solve for ending work in process:

+ Work in process, beginning... 12,000 + Units started into production during the month... 100,000 − Units completed and transferred out during the month... 88,000 = Work in process, ending... 24,000

Materials

Transferred to next department... 88,000 Ending work in process (materials: 24,000 units × 100%

Materials

Cost of beginning work in process... $ 6,000 Cost added during the period... 51,120 Total cost (a)... $57,120 Equivalent units of production (b)... 112,000 Cost per equivalent unit, (a) ÷ (b)... $0.51

Materials

Ending work in process inventory:

Equivalent units of production (materials: 24,000 units ×

100% complete)... 24,000 Cost per equivalent unit... $0.51 Cost of ending work in process inventory... $12,240

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first processing department, the Welding Department, started the month with 10,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $19,200. An additional 60,000 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 70% complete with respect to conversion costs. A total of $380,060 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) $6.400 B) $6.334 C) $6.209 D) $4.811

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,3 Level: Medium

Solution:

Conversion

Transferred to next department... 51,000 Ending work in process (conversion: 19,000 units × 70%

Conversion

Cost of beginning work in process... $ 19,200 Cost added during the period... 380,060 Total cost (a)... $399,260 Equivalent units of production (b)... 64,300

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35. Limber 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:

Units

Percent Complete with

Respect to Conversion Beginning work in process inventory... 18,000 80% Started into production during June...

81,00 0 Ending work in process inventory...

17,00

0 80%

According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June. Additional conversion costs of $68,208 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) $0.873 B) $0.696 C) $0.842 D) $1.060

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,3 Level: Medium

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Solution:

Conversion

Transferred to next department... 82,000 Ending work in process

(conversion: 17,000 units × 80% complete)... 13,600 Equivalent units of production... 95,600

Conversion

Cost of beginning work in process... $15,264 Cost added during the period... 68,208 Total cost (a)... $83,472 Equivalent units of production (b)... 95,600 Cost per equivalent unit, (a) ÷ (b)... $0.873

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36. Roy Company manufactures a product in Departments A and B. Materials are added at the beginning of the process in Department B. Roy uses the weighted-average method in its process costing system. Conversion costs for Department B were 50% complete with respect to the 6,000 units in the beginning work in process and 75% complete with respect to the 8,000 units in the ending work in process. A total of 12,000 units were completed and transferred out of Department B during February. An analysis of the costs in Department B for February follows:

Transferred In Materials Conversion Work in process, February 1... $12,000 $2,500 $1,000 Costs added during February... $29,000 $5,500 $5,000 The total cost per equivalent unit during February was closest to:

A) $2.75 B) $2.78 C) $2.82 D) $2.85

Ans: B AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2,3 Level: Medium Source: CPA, adapted Solution:

Materials Conversion Transferred to next department... 12,000 12,000 Ending work in process:

Materials: 8,000 units × 100% complete... 8,000

Conversion: 8,000 units × 75% complete... 6,000 Equivalent units of production... 20,000 18,000

Transferred

In Materials Conversion Total Work in process, beginning... $12,000 $2,500 $1,000

Cost added during the month 29,000 5,500 5,000 Total cost (a)... $41,000 $8,000 $6,000 Equivalent units (above) (b).. 20,000 20,000 18,000 Cost per equivalent unit

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37. Hammoudi 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 90% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $61,920. An additional 53,000 units were started into production during the month and 45,000 units were completed in the Welding Department and

transferred to the next processing department. There were 24,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $194,340 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) $4.300 B) $4.147 C) $2.524 D) $3.667

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,3 Level: Medium

Solution:

Conversion

Transferred to next department... 45,000 Ending work in process

(conversion: 24,000 units × 70% complete)... 16,800 Equivalent units of production... 61,800

Conversion

Cost of beginning work in process... $ 61,920 Cost added during the period... 194,340 Total cost (a)... $256,260 Equivalent units of production (b)... 61,800 Cost per equivalent unit, (a) ÷ (b)... $4.147

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38. Paquet 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.

Units

Respect to Conversion Beginning work in process inventory... 7,700 40% Transferred in from the prior...

department during January... 56,000 Completed and transferred to the next...

department during January... 58,400

Ending work in process inventory... 5,300 90%

The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $16,940 and a total of $347,320 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) $5.500 B) $5.666 C) $5.766 D) $6.202

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,3 Level: Medium

Solution:

Units transferred out... 58,400 Add: equivalent units in the ending inventory (5300 × 90%

complete)... 4,770 Equivalent units of production... 63,170 Cost in the beginning inventory... $ 16,940 Cost added during the month... 347,320 Total cost... $364,260 $364,260 ÷ 63,170 units = $5.766 per unit

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39. Jimmy Company uses the weighted-average method in its process costing system. The ending work in process inventory consists of 9,000 units. The ending work in process inventory is 100% complete with respect to materials and 70% complete with respect to labor and overhead. If the cost per equivalent unit for the period is $3.75 for material and $1.25 for labor and overhead, what is the balance of the ending work in process inventory account?

A) $41,625 B) $33,750 C) $45,000 D) $31,500

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2,4 Level: Medium

Solution:

Ending work in process:

Materials: 9,000 units × 100% complete.... 9,000 Conversion: 9,000 units × 70% complete... 6,300

Ending work in process: Materials Conversion Total Equivalent units of production... 9,000 6,300

Cost per equivalent unit... $3.75 $1.25

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40. Lawton Company produces canned tomato soup in a single processing department and has a process costing system in which it uses the weighted-average method. The company sold 250,000 units in the month of January. Data concerning inventories follow:

Units Inventory at January 1:

Work in process... None Finished goods...

75,00 0 Inventory at January 31:

Work in process (conversion 75% complete)...

16,00 0 Finished goods... 60,000 What were the equivalent units for conversion costs for January? A) 235,000

B) 247,000 C) 251,000 D) 253,000

Ans: B AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2 Level: Medium Source: CPA, adapted Solution:

To calculate units transferred out:

Units sold 250,000 + Ending finished goods inventory... 60,000 − Beginning finished goods inventory... 75,000 = Units transferred out... 235,000

Units transferred out... 235,000 Ending work in process (16,000 units × 75% complete).. 12,000 Equivalent units of production... 247,000

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41. Jersey Company has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was:

A) 25,000 units B) 34,000 units C) 35,000 units D) 40,000 units

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Hard

Solution:

Units transferred out... 40,000 * Ending work in process (10,000 units × 75% complete)... 7,500 Equivalent units for conversion costs... 47,500 * Solve backwards: 47,500 − 7,500 = 40,000

Units in beginning inventory... 15,000 + Units started... 35,000 * − Units in ending inventory... 10,000 = Units transferred out... 40,000

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42. Boswal Company uses the weighted-average 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 80% complete with respect to conversion costs. An

additional 52,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs.

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

A) 43,600 B) 40,000 C) 38,800 D) 64,000

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Medium

Solution:

Work in process, beginning... 6,000 + Units started into production during the month... 52,000 − Work in process, ending... 18,000 = Units completed and transferred out during the month... 40,000

Conversion Transferred to next department... 40,000 Ending work in process (18,000 units × 20% complete). 3,600 Equivalent units of production... 43,600

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

Units Percent Complete with Respect to Conversion Beginning work in process inventory... 4,700 90% Transferred in from the prior department during April. . 59,700

Ending work in process inventory... 7,300 80% What were the equivalent units for conversion costs in the Painting Department for April?

A) 62,940 B) 62,300 C) 65,540 D) 57,100

Solution:

Units in beginning inventory... 4,700 + Units started into production... 59,700 − Units in ending inventory... 7,300 = Units transferred out... 57,100

Equivalent units transferred out... 57,100 Add: Equivalent units in the ending work in process

inventory (7,300 units × 80% complete)... 5,840 Equivalent units for conversion costs... 62,940

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44. Parks Company uses the weighted-average method in its process costing system. At the start of the year, the company had 5,000 units in process in Department A that were 60% complete with respect to conversion costs. At the end of the year, 6,500 units were in process, 40% complete with respect to conversion costs. During the year, 30,000 units were completed and transferred on to the next department. The equivalent units for conversion costs would be:

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

Solution:

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45. Bart Co. adds materials at the beginning of the process in Department M. The company uses the weighted-average method in its process costing system. The following information pertains to Department M's work in process during April:

Units Work in process, April 1 (conversion 60% complete).... 3,000 Started in April... 25,00 0 Completed... 20,00 0 Work in process, April 30 (conversion 75% complete). . 8,000 The equivalent units for conversion cost are:

A) 26,000 B) 25,000 C) 24,200 D) 21,800

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46. Fatas Corporation 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 20% 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. During the month 102,000 units were completed in the Assembly Department and transferred to the next processing department. There were 1,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

A) 102,200 B) 100,600 C) 102,000 D) 88,000

Solution:

inventory (1,000 units × 20% complete)... 200 Equivalent units for conversion costs... 102,200

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47. Natiello Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below: Units Percent Complete with Respect to Conversion Beginning work in process inventory... 9,100 20% Transferred in from the prior department during

October...

38,50 0 Completed and transferred to the next department

during October...

41,00 0

Ending work in process inventory... 6,600 70% What were the equivalent units for conversion costs in the Lubricating Department for October?

A) 41,000 B) 43,120 C) 36,000 D) 45,620

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

Solution:

Units in beginning inventory... 9,100 + Units started into production... 38,500 − Units in ending inventory... 6,600 = Units transferred out... 41,000

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48. Kew Company uses the weighted-average method in its process costing system. The company had 3,000 units in work in process at April 1 that were 60% complete with respect to conversion cost. During April, 10,000 units were completed. At April 30, 4,000 units remained in work in process and they were 40% complete with respect to conversion cost. Direct materials are added at the beginning of the process. How many units were started during April?

A) 9,000 B) 9,800 C) 10,000 D) 11,000

To solve for units started into production:

+ Work in process, ending... 4,000 + Units completed and transferred out during the month... 10,000 − Work in process, beginning... 3,000 = Units started into production during the month... 11,000

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49. Pelican Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for March:

Units completed and transferred out... 5,000 Units in work in process, March 31... 800 Equivalent units, materials... 5,800 Equivalent units, conversion costs... 5,200

Materials Conversion Costs in work in process on March 1... $ 2,900 $ 4,680 Costs added to production during March... 71,050 131,040 Total cost... $73,950 $135,720 All materials at Pelican are added at the beginning of the production process. Conversion costs are incurred uniformly over the production process. What total amount of cost should be assigned to the units in work in process at the end of March? A) $14,840

B) $15,420 C) $24,920 D) $25,860

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 3,4 Level: Hard

Solution:

Materials Conversion Total Total cost... $73,950 $135,720

÷ Equivalent units... 5,800 5,200 = Cost per equivalent unit... $12.75 $26.10 × Ending inventory

Materials: 800 units × $12.75... $10,200

Conversion costs: *200 units × $26.10.. $5,220 $15,42 0 Units in work in process, March 31... 800 Less: Uncompleted as to conversion (5,800 total − 5,200 equivalent units). 600 Equivalent units in ending work in process: conversion... 200

(33)

50. Kwan Manufacturing Company uses a process costing system. All materials at Kwan are added at the beginning of the production process. For the month of October, equivalent units for materials were 40,000 under the weighted-average method and 36,000 under the FIFO method. Kwan's costs for October were as follows:

Cost in beginning work in process (October 1)... $ 25,200 Cost added to production during October... 262,800 Total cost... $288,000

What are Kwan’s equivalent costs per equivalent unit for October for materials under both process costing methods?

Weighted-Average FIFO A) $6.57 $8.00 B) $6.57 $7.30 C) $7.20 $8.00 D) $7.20 $7.30

AICPA FN: Reporting Appendix: 4A LO: 3,6 Level: Medium Solution:

Weighted-Average FIFO Total cost... $288,000 $262,800 ÷ Equivalent units... 40,000 36,000 Cost per equivalent unit.... $7.20 $7.30

(34)

51. Safia Corporation 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.

Units

Respect to Conversion Beginning work in process inventory... 3,300 40% Transferred in from the prior department during

March... 67,000

The Fitting Department's cost per equivalent unit for conversion cost for March was $4.70.

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

A) $330,410.00 B) $314,900.00 C) $304,090.00 D) $297,886.00

Solution:

Units in beginning inventory... 3,300 + Units transferred in... 67,000 − Units in ending inventory... 5,600 = Units transferred out... 64,700 × Cost per equivalent unit... $4.70 $304,090

(35)

52. The following data were taken from the accounting records of the Mixing Department of Kappa Company which uses the weighted-average method in its process costing system:

Beginning work in process inventory:

Cost... $19,000 Units... 30,000 units Percentage completion with respect to materials... 100% Percentage completion with respect to conversion... 60% Units completed and transferred out... 82,000 units Cost per equivalent unit:

Material... $1.50 Conversion... $0.75 The cost of units transferred out was:

A) $184,500 B) $149,500 C) $167,500 D) $145,000

Solution:

Cost computation for units transferred out: 82,000 units × ($1.50 + $0.75) = $184,500

(36)

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

Materials Conversion Work in process, beginning... $ 4,000 $ 3,000 Current costs added... 20,000 16,000 Total costs... $24,000 $19,000 Equivalent units... 100,000 95,000 Costs per equivalent unit... $0.24 $0.20 Goods completed... 90,000 units

Work in process, ending... 10,000 units

Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed?

Goods completed and transferred out

Ending work in process A) $39,600 $3,400 B) $39,600 $4,400 C) $43,000 $0 D) $44,000 $3,400 Ans: A AACSB: Analytic AICPA BB: Critical Thinking

(37)

Solution:

Materials Conversion Transferred to next department... 90,000 90,000 Ending work in process:

Materials: 10,000 units × 100%

complete... 10,000 Conversion: 10,000 units × 50%

complete... 5,000 Equivalent units of production... 100,000 95,000 Materials Conversion Work in process, beginning... $ 4,000 $ 3,000 Cost added during the month... 20,000 16,000 Total cost (a)... $24,000 $19,000 Equivalent units (above) (b)... 100,000 95,000 Cost per equivalent unit (a) ÷ (b)... $0.24 $0.20

Materials Conversion Total Units transferred out... 90,000 90,000

Cost per equivalent unit... $0.24 $0.20

Cost transferred out... $21,600 $18,000 $39,600 Materials Conversion Total Equivalent units of production:

ending work in process... 10,000 5,000 Cost per equivalent unit... $0.24 $0.20

(38)

54. Lap Company uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 80,000 units, 100% complete with respect to materials and 25% complete with respect to conversion costs. The total dollar value of this inventory was $226,000. During the month, 150,000 units were transferred out of the department. The costs per equivalent unit for the month were $2.00 for materials and $3.50 for conversion costs. The value of the units completed and transferred out of the department was:

A) $681,000 B) $765,000 C) $821,000 D) $825,000

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 4 Level: Medium

Solution:

150,000 units × ($2.00 + $3.50) = $825,000

55. Bly Company uses the weighted-average method in its process costing system. During March, Bly Company's Department Y costs per equivalent unit were as follows:

Materials... $ 1 Conversion... $ 3 Transferred-in... $ 5

There were 4,000 units (40% complete with respect to conversion cost and 0% complete with respect to materials cost) in Work in Process at March 31. The total costs assigned to the March 31, Work in Process inventory should be:

A) $36,000 B) $28,800 C) $27,200 D) $24,800

AICPA FN: Reporting LO: 4 Level: Hard Source: CPA, adapted Solution:

Ending work in process: Conversion costs (4,000 × 40%) × $3.... $ 4,800 Transferred in costs (4,000 × $5)... 20,000

(39)

(40)

56. The following information was provided by Fystro Corporation for the month of March. Fystro uses the weighted-average method in its process costing system.

Total cost transferred out during March... $74,000 Cost in Work in Process, March 1...

$12,00 0 Cost in Work in Process, March 31... $5,000 How much cost did Fystro add to production during March? A) $57,000

B) $62,000 C) $67,000 D) $81,000

Solution:

Work in process, ending... $ 5,000 + Cost transferred out during the month... 74,000 − Work in process, beginning... 12,000 = Cost added to production during the month... $67,000

(41)

57. Rangan Corporation 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.

Units

Respect to Conversion Beginning work in process inventory... 2,100 50% Transferred in from the prior department

during January...

76,00 0 Completed and transferred to the next

department during January...

74,20 0

The Molding Department's cost per equivalent unit for conversion cost for January was $3.91.

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

A) $10,674.30 B) $15,249.00 C) $4,574.70 D) $4,105.50

Solution:

Equivalent units in ending inventory: 3,900 units × 70%

complete... 2,730 × $3.91 Conversion costs in ending work in process inventory... $10,674.3 0

(42)

58. Merckley Company has a process costing system and uses the FIFO method. For May, the company's beginning work in process inventory was 80% complete with respect to conversion, and the ending work in process inventory was 50% complete with respect to conversion. Information on units processed and conversion costs incurred during May follow:

Units

Conversion Cost Work in process inventory on May 1... 25,000 $22,000 Units started into production, and costs incurred

during the month...

135,00

0 $143,000 Units completed and transferred to finished

goods during the month...

100,00 0 Work in process inventory on May 31... 60,000

The amount of conversion cost in the ending work in process inventory was: A) $33,000

B) $38,100 C) $39,000 D) $45,000

Ans: C AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting Appendix: 4A LO: 5,6,7 Level: Medium Source: CMA, adapted

(43)

Solution:

Equivalent Units of Production

Conversion To complete beginning work in process (conversion:

25,000 units × 20% complete)... 5,000 Units started and completed during the period (135,000

units started − 60,000 units in ending inventory)... 75,000 Ending work in process (60,000 units × 50% complete). . 30,000 Equivalent units of production... 110,000

Conversion Cost added during the period (a)... $143,000 Equivalent units of production (b)... 110,000 Cost per equivalent unit (a) ÷ (b)... $1.30

Costs of Ending Work in Process Inventory and Units Transferred Out

Conversion Ending work in process inventory:

Equivalent units of production... 30,000 Cost per equivalent unit... $1.30 Cost of ending work in process inventory... $39,000

(44)

59. Doofus Music Company manufactures air guitars and uses a FIFO process costing system to collect costs related to its production. Doofus only accounts for conversion costs because the only direct material, air, has no cost. The following information relates to September production:

Number of units

Percent complete with respect to conversion costs Work in process, September 1... 20,000 20% Units started into production... 90,000

Work in process, September 30... 8,000 75%

Conversion cost in work in process on September 1... $ 263,120 Conversion cost added to production during September.... 5,262,400 Total cost...

$5,525,52 0

What amount of cost should Doofus assign to the units (guitars) in work in process on September 30?

A) $125,580 B) $303,600 C) $318,780 D) $343,200

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5,6,7 Level: Hard

(45)

Solution:

Materials Conversion To complete beginning work in process

(materials: 20,000 units × 100% complete; conversion: 20,000 units ×

80% complete)... 20,000 16,000 Units started and completed during the

period (90,000 units started − 8,000 units

in ending inventory)... 82,000 82,000 Ending work in process (materials: 8,000

units × 0% complete; conversion: 8,000

units × 75% complete)... 0 6,000 Equivalent units of production... 102,000 104,000

Materials Conversion Cost added during the period (a)... $0 $5,262,400 Equivalent units of production (b)... 102,000 104,000 Cost per equivalent unit (a) ÷ (b)... $0.00 $50.60

Costs of Ending Work in Process Inventory and Units Transferred Out

Materials Conversion Total Ending work in process inventory:

Equivalent units of production... 0 6,000 Cost per equivalent unit... $0.00 $50.60

(46)

60. Edwin Company uses the FIFO method in its process costing system. The first processing department, the Welding Department, started the month with 22,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $24,200. An additional 96,000 units were started into production during the month. There were 20,000 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $585,900 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs? (Round off to three decimal places.)

A) $6.103 B) $5.170 C) $5.500 D) $5.250

Conversion To complete beginning work in process (22,000 units × 80%

complete)... 17,600 Units started and completed during the period (96,000 units

started − 20,000 units in ending inventory)... 76,000 Ending work in process (20,000 units × 90% complete)... 18,000 Equivalent units of production... 111,600

(47)

61. Makridakis Corporation uses the FIFO method in its process costing system.

Operating data for the Casting Department for the month of September appear below:

Units

Percent Complete with Respect to Conversion Beginning work in process inventory... 17,000 10% Transferred in from the prior department during

September...

50,00 0 Ending work in process inventory...

17,00

0 40% According to the company's records, the conversion cost in beginning work in process inventory was $3,434 at the beginning of September. Additional conversion costs of $117,914 were incurred in the department during the month.

What would be the cost per equivalent unit for conversion costs for September? (Round off to three decimal places.)

A) $2.020 B) $1.811 C) $2.140 D) $2.358

Conversion To complete beginning work in process (17,000 units ×

90% complete)... 15,300 Units started and completed during the period (50,000

units started − 17,000 units in ending inventory)... 33,000 Ending work in process (17,000 units × 40% complete) 6,800 Equivalent units of production... 55,100

Conversion Cost added during the period (a)... $117,914 Equivalent units of production (b)... 55,100

(48)

(49)

62. Krumbly Company uses the FIFO method in its process costing system. At the beginning of the month, Department D's work in process inventory contained 2,000 units. These units were fully complete with respect to materials and 40% complete with respect to conversion costs, with a total cost at that point of $3,600. During the month, conversion costs amounted to $8 per equivalent unit. If all 2,000 units are fully complete by the end of the month, their total cost by that time will be:

A) $19,600 B) $10,000 C) $13,200 D) $9,000

Cost from beginning inventory... $ 3,600 Cost to finish beginning inventory: (1 − 40%) = 60% ×

2,000 = 1,200 EU × $8 cost per EU... 9,600 Total cost of units from beginning inventory...

$13,20 0

(50)

63. Inka Corporation uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 13,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $4,160. An additional 97,000 units were started into production during the month and 97,000 units were completed and transferred to the next processing department. There were 13,000 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs. A total of $136,637 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) $1.390 B) $1.600 C) $1.409 D) $1.280

Conversion To complete beginning work in process (13,000 units × 80% complete). 10,400 Units started and completed during the period (97,000 units started −

13,000 units in ending inventory)... 84,000 Ending work in process (13,000 units × 30% complete)... 3,900 Equivalent units of production... 98,300

(51)

64. Qvr Corporation uses the FIFO method in its process costing system. Operating data for the Cutting Department for the month of March appear below:

Units

Percent Complete with Respect to

Conversion Beginning work in process inventory... 2,500 60% Transferred in from the prior department during March. 45,000

Completed and transferred to the next department during March...

40,50 0

Ending work in process inventory... 7,000 70% According to the company's records, the conversion cost in beginning work in process inventory was $3,600 at the beginning of March. Additional conversion costs of $99,477 were incurred in the department during the month.

What would be the cost per equivalent unit for conversion costs for March? (Round off to three decimal places.)

A) $2.211 B) $2.400 C) $2.170 D) $2.266

(52)

(53)

65. Marston Company uses the FIFO method in its process costing system. The equivalent units for March for conversion costs totaled 37,500 units. The beginning work in process inventory in March consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory in March consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was:

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Hard Solution:

Equivalent Units of Production Calculation:

To complete beginning work in process (15,000 units × 40%

complete)... 6,000 Units started and completed during the period (? units started − 10,000

units in ending inventory)... ? Ending work in process (10,000 units × 75% complete)... 7,500 Equivalent units of production...

37,50 0 To solve for Units started and completed during the period, solve algebraically: 6,000 + ? + 7,500 = 37,500

? = 24,000 Next:

Units started and completed = units started – 10,000 units from ending inventory 24,000 = units started – 10,000

(54)

66. Catin Company uses the FIFO method in its process costing system. The Assembly Department started the month with 7,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. An additional 60,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 19,000 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 for conversion costs in the Assembly Department for the month?

A) 48,000 B) 72,000 C) 62,300 D) 65,100

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Solution:

(55)

67. Kavadias Corporation uses the FIFO method in its process costing system. Operating data for the Enameling Department for the month of May appear below:

Units

Conversion Beginning work in process inventory... 7,400 80% Transferred in from the prior...

department during May... 75,200

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

A) 79,600 B) 82,300 C) 76,380 D) 70,800

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Solution:

(56)

68. Kale Company uses the FIFO method in its process costing system. At the beginning of March, the inventory in the Blending Processing Center consisted of 3,000 units, 90% complete with respect to conversion costs. At the end of the month, the 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 period, the equivalent units for conversion costs would be:

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Solution:

+ Work in process, ending... 2,000 + Units completed and transferred out during the month... 10,000

− Work in process, beginning... 3,000 = Units started into production during the month... 9,000

complete)... 300 Units started and completed during the period (9,000 units

(57)

69. Billings Company uses the FIFO method in its process costing system. On July 1, Department A had 10,000 units in process that were 80% complete with respect to conversion. On July 31 the department had 8,000 units in process that were 60% complete with respect to conversion. The department transferred 40,000 units out during the month, of which 10,000 units came from the beginning work in process inventory, and 30,000 units were started and completed during the month. All materials are added at the beginning of the process in Department A. What are the equivalent units for the month for materials and conversion, respectively?

A) 38,000 units, and 36,800 units B) 38,000 units, and 38,000 units C) 48,000 units, and 44,800 units D) 48,000 units, and 48,000 units

Ans: A AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Source: CMA, adapted

Solution:

+ Work in process, ending... 8,000 + Units completed and transferred out during the month... 40,000 − Work in process, beginning... 10,000 = Units started into production during the month... 38,000

Materials Conversion To complete beginning work in process (materials:

10,000 units × 0% complete; conversion: 10,000

units × 20% complete)... 0 2,000 Units started and completed during the period (38,000

units started − 8,000 units in ending inventory)... 30,000 30,000 Ending work in process (materials: 8,000 units × 100%

complete; conversion: 8,000 units × 60% complete). . 8,000 4,800 Equivalent units of production... 38,000 36,800

(58)

70. Gadroy Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 13,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 52,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 55,000 units were

completed in the Grinding Department and transferred to the next processing department. There were 10,000 units in the ending work in process inventory of the Grinding Department that were 70% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Grinding Department for the month?

A) 62,000 B) 49,000 C) 55,000 D) 51,600

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium Solution:

(59)

71. Outiniki Company uses the FIFO method in its process costing system. Operating data for the Brazing Department for the month of November appear below:

Units

Respect to Conversion Beginning work in process inventory... 3,400 30% Transferred in from the prior department during

November...

54,10 0 Completed and transferred to the next department

during November... 52,600

Ending work in process inventory... 4,900 70% What were the equivalent units for conversion costs in the Brazing Department for November?

A) 55,010 B) 55,600 C) 56,030 D) 52,600

(60)

72. Steven Company uses the FIFO method in its process costing system. The following data were taken from the accounting records of a particular department for last month:

Beginning work in process inventory: (10,000 units;

materials 100% complete, conversion 60% complete)... $17,500 Units completed and transferred out during the month... 60,000 units Cost per equivalent unit:

Material... $2.50 Conversion... $2.00 The cost of units transferred out of the department during the month is:

A) $270,000 B) $242,500 C) $254,500 D) $250,500

Ans: D AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4A LO: 7 Level: Medium Solution:

EU

Total Materials Conversion

Total Cost Transferred to the next department:

From beginning work in process*. .

10,00

0 0 4,000 From started and completed during

month... 50,000 50,000 50,000 Total EU this period...

60,00

0 50,000 54,000 Cost per EU... $2.50 $2.00 Cost from current period (EU ×

Cost per EU)... $125,000 $108,000 $233,000 Cost from beginning work in

process... 17,500 Total cost of units transferred out

of the department during current

month... $250,500 *(Materials=100% complete; 0% needed to complete with respect to materials; Conversion=60% complete; (1 − 0.6) = 40% × 10,000 units to complete units with respect to conversion)

(61)

73. Teboul Corporation uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below:

Units

Conversion Beginning work in process inventory... 7,900 20% Transferred in from the prior department during

March... 40,000 Completed and transferred to the next department

during March...

43,90 0

According to the company's records, the conversion cost in beginning work in process inventory was $11,850 at the beginning of March. The cost per equivalent unit for conversion costs for March was $7.40.

How much conversion cost would be assigned to the units completed and transferred out of the department during March?

A) $325,018 B) $313,168 C) $296,000 D) $324,860

Materials Conversion To complete beginning work in process

(materials: 7,900 units × 100% complete;

conversion: 7,900 units × 80% complete)... 7,900 6,320 Units started and completed during the period

(40,000 units started − 4,000 units in ending

inventory)... 36,000 36,000 Ending work in process (materials: 4,000 units ×

% complete; conversion: 4,000 units × 60%

complete)... 0 2,400 Equivalent units of production... 43,900 44,720

(62)

Materials Conversion

Cost added during the period (a)... $0 $330,928 $330,928 Equivalent units of production (b)... 43,900 44,720

Cost per equivalent unit (a) ÷ (b)... $0.00 $7.40

Costs of Ending Work in Process Inventory and Units Transferred Out

Materials Conversion Total

Ending work in process inventory:

Equivalent units of production... 0 2,400 Cost per equivalent unit... $0.00 $7.40

Cost of ending work in process inventory... $0 $17,760 $17,760

Units transferred out:

Cost in beginning inventory... $0 $11,850 $ 11,850 Cost to complete the units in beginning

inventory:

Equivalent units of production required to

complete the beginning inventory... 7,900 6,320 Cost per equivalent unit... $0.00 $7.40 Cost to complete the units in beginning

inventory... $0 $46,768 46,768 Cost of units started and completed this period:

Units started and completed this period... 36,000 36,000 Cost per equivalent unit... $0.00 $7.40

Cost of units started and completed this period... $0 $266,400 266,400 Cost of units transferred out... $325,018