Process Costing System
PROCESS COSTING
1.
2.
A true process costing system could make use of each of the
following except
a. Standard costs.
b. Individual lots.
c. Variable costing.
d. Responsibility accounting.
(AICPA, adapted)
A corporation manufactures two brands of barbed wire fencing
for sale to wholesalers and large ranchers. Which of the
following would be the best type of costing system for such
company to use?
a. EOQ system.
b. Job-order system.
c. Process system.
d. Retail inventory system.
(CIA, adapted)
3.
In a process cost system, the application of factory overhead
usually is recorded as an increase in
a. Cost of goods sold.
b. Work-in-process inventory control.
c. Factory overhead control.
d. Finished goods inventory control.
(AICPA, adapted)
4.
Which of the following characteristics applies to process
costing but not to job-order costing?
a. Identifiable batches of production.
b. Equivalent units of production (EUP).
c. Averaging process.
d. Use of standard costs
(AICPA, adapted)
5.
An equivalent unit of direct materials or conversion cost is
equal to
a. The amount of direct materials or conversion cost
necessary to complete one unit of production.
b. A unit of work-in-process inventory.
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Process Costing System
c. The amount of direct materials or conversion cost
necessary to start a unit of production in work-in-process.
d. Fifty percent of the direct materials or conversion cost of a
unit of finished goods inventory (assuming a linear
production pattern).
(AICPA, adapted
6.
In the computation of manufacturing cost per equivalent unit,
the weighted-average method of process costing considers
a. Current costs only.
b. Current costs plus cost of beginning work-in-process
inventory.
c. Current costs plus cost of ending work-in-process
inventory.
d. Current costs minus cost of beginning work-in process
inventory.
(AICPA, adapted)
7.
An error was made in the computation of the percentage of
completion of the current year’s ending work-in-process (EWIP)
inventory. The error resulted in assigning a lower percentage of
completion to each component of the inventory than actually
was the case. Consequently, the following were misstated:
1) The computation of total equivalent units.
2) The computation of costs per equivalent unit.
3) Costs assigned to cost of goods completed for the period.
What were the effects of the error?
1
2
3
a. Understate
Overstate
Overstate
b. Understate
Understate
Overstate
c. Overstate
Understate
Understate
d. Overstate
Overstate
Understate
(AICPA, adapted)
250
Process Costing System
8.
A valid reason for using predetermined overhead rate for
process costing is
a. The unrepresentative unit cost that will otherwise result
when total factory overhead fluctuates significantly from
period to period.
b. The noncomparability of the degree of completion of units
in work-in process from 1 month to the next when
predetermined rates are not used
c. The noncomparability of FIFO and weighted-average
equivalent units of production for overhead when
predetermined rates are not used.
d. The difference in transfer prices that will occur between two
different plants of a company when predetermined rates are
not used.
(CIA, adapted)
9.
In developing a predetermined factory overhead application
rate for use in a traditional process costing system, which of the
following could be used in the numerator and denominator?
Numerator
Denominator
a. Actual factory overhead
Actual machine hours
b. Actual factory overhead
Estimated machine hours
c. Estimated factory overhead
Actual machine hours
d. Estimated factory overhead
Estimated machine hours
(AICPA, adapted)
10.
In process costing systems, the application of factory overhead
usually is recorded as an increase in
a. Cost of goods sold.
b. Work-in-process inventory control.
c. Factory overhead control.
d. Finished goods control.
(AICPA, adapted)
11.
The completion of goods is recorded as a decrease in work-inprocess control when using
Job-Order Costing
Process Costing
a.
Yes
No
b.
Yes
Yes
c.
No
Yes
d.
No
No
(AICPA, adapted)
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Process Costing System
12.
An operation costing system is
a. Identical to a process costing system except that actual
cost is used for manufacturing overhead.
b. The same as a process costing system except that
materials costs are assigned on the basis of batches of
production.
c. The same as the job-order costing system except that
materials are accounted for in the same way as they are in
a process costing system.
d. A system in which manufacturing activities are finely
divided into individual, discrete steps or operations.
(CMA, adapted)
13.
Three commonly employed systems for product costing are
job-order costing, operation costing, and process costing.
Match the type of production environment with the costing
method used.
Job-Order Costing
Operation Costing
Process Costing
a. Auto repair
Clothing manufacturing Oil refining
b. Loan processing Drug manufacturing Custom printing
c. Custom printing
Paint manufacturing Paper manufacturing
d. Engineering design
Auto assembly
Motion picture prod’n.
(CIA, adapted)
14.
In a production cost report using process costing, transferred in
costs are similar to
a. Direct materials added at a point during the process.
b. Conversion costs added during the process.
c. Costs transferred to the next process.
d. Costs included in beginning inventory.
(AICPA, adapted)
15.
What are transferred-in costs in a process costing system?
a. Labor costs incurred from transferring employees from
another department within the same plant instead of hiring
temporary workers from the outside.
b. Costs of product of a previous internal process that is
subsequently used in a succeeding internal process.
c. Supervisory salaries that are transferred from an overhead
cost center to a production cost center.
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Process Costing System
d. Ending work-in-process inventory of a previous process
that will be used in a succeeding process.
(AICPA, adapted)
16.
In a process costing system, how is the unit cost affected in a
production cost report when direct materials are added in a
department subsequent to the first department and the added
materials result in additional units?
a. The first department’s unit cost is increased, which
necessitates an adjustment of the transferred-in unit cost.
b. The first department’s unit cost is decreased, which
necessitates an adjustment of the transferred-in unit cost.
c. The first department’s unit cost is increased, which does
not necessitate an adjustment of the transferred-in unit
cost.
d. The first department’s unit cost is decreased, which does
not necessitate an adjustment of the transferred-in unit
cost.
(AICPA, adapted)
17.
Purchased direct materials are added in the second
department of a three-department process. This addition
increases the number of units produced in the second
department and will
a. Always change the direct labor cost percentage in the
ending work-in-process inventory.
b. Never cause an adjustment to the unit cost transferred in
from the first department.
c. Always increase total unit costs.
d. Always decrease total ending work-in-process inventory.
(AICPA, adapted)
253
Process Costing System
18.
Purchased direct materials are added in the second
department of a three-department process. This addition does
not increase the number of units produced in the second
department and will
a. Not change the peso amount transferred to the next
department.
b. Decrease total work-in-process inventory.
c. Increase the factory overhead portion of the ending work-inprocess inventory.
d. Increase total unit cost.
(AICPA, adapted)
19.
In process 2, material G is added when a batch is 60%
complete. Ending work-in-process units, which are 50%
complete, would be included in the computation of equivalent
units for
Conversion Costs
Material G
a. Yes
No
b. No
Yes
c. No
No
d. Yes
Yes
(AICPA, adapted)
20.
The following information pertains to a company’s Finishing
Department operations in May.
Units % Completion
Work-in-process, May 1
2,000
40%
Units started during May
10,000
Units completed and transferred to FG
8,000
Work-in-process, May 31
?
25%
Materials are added at the end of the process, and conversion
costs are incurred evenly throughout the process. The
equivalent units of materials added during May were
a. 8,000
b. 8,200
c. 9,100
d. 10,000
(CIA, adapted)
254
Process Costing System
21.
Crew Co. had 3,000 units in work-in-process at April 1 that
were 60% complete as to conversion costs. During April,
10,000 units were completed. At April 30, the 4,000 units in
work-in-process were 40% complete as to conversion cost.
Direct materials are added at beginning of the process. How
many units were started during April?
a. 9,000
b. 9,800
c. 10,000
d. 11,000
(AICPA, adapted)
22.
In comparing the FIFO and weighted-average methods for
calculating equivalent units
a. The FIFO method tends to smooth costs out more over
time than weighted-average method.
b. The weighted-average method is more precise than the
FIFO method because the weighted-average method is
based only on the work completed in the current period.
c. The two methods will give similar results even if physical
inventory levels and production costs (material and
conversion costs) fluctuate greatly from period to period.
d. The FIFO method is better than the weighted-average
method for judging the performance in a period
independently from performance in preceding periods.
(CIA, adapted)
23.
A process costing system was used for a department that
began operations in January 1998. Approximately the same
number of physical units, at the same degree of completion,
were in work-in-process at the end of both January and
February. Monthly conversion costs are assigned to ending
work-in-process and units completed. Compared with the FIFO
method, would the weighted-average method use the same or
a greater number of equivalent units to calculate the monthly
cost assignments?
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Process Costing System
Equivalent Units for WeightedAverage Compared with FIFO
January
February
a.
Same
Same
b.
Greater number
Greater number
c.
Greater number
Same
d.
Same
Greater number
(AICPA, adapted)
24.
The units transferred in from the first department to the second
department should be included in the computation of the
equivalent units for the second department under which of he
following methods of process costing?
FIFO
Weighted-Average
a.
Yes
Yes
b.
Yes
No
c.
No
Yes
d.
No
No
(AICPA, adapted)
25.
In a given process costing system, the EUP are computed
using the weighted-average method. With respect to
conversion costs, the percentage of completion for the current
period only is included in the calculation of the
Beginning WIP
Ending WIP
a. No
No
b. No
Yes
c. Yes
No
d. Yes
Yes
(AICPA, adapted)
26.
Assuming no beginning work-in-process (BWIP) inventory, and
that the ending work-in-process (EWIP) inventory is 50%
complete as to conversion costs, the number of equivalent
units as to conversion costs would be
a. The same as the units completed.
b. The same as the units placed in process.
c. Less than the units completed.
d. Less than the units placed in process.
(AICPA, adapted)
256
Process Costing System
27.
Assuming no beginning work-in-process inventory, and that the
ending work-in-process inventory is 100% complete as to
materials costs, the number of equivalent units as to materials
costs is
a. The same as the units placed in process.
b. The same as the units completed.
c. Less than the units placed in process.
d. Less than the units completed.
(AICPA, adapted)
28.
On November 1, Yankee Company had 20,000 units of WIP in
Department No. 1 which were 100% complete as to material
costs and 20% completed as 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. WIP on November 30 was 100% complete as to
materials costs and 40% complete as to conversion costs. By
what amount would the equivalent units 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.
(AICPA, adapted)
Questions 29 and 30 are based on the following information
A manufacturing company employs a process cost system. The
company’s product passes through both Department 1 and
Department 2 in order to be completed. Conversion costs are incurred
uniformly throughout the process in Department 2. The direct material
is added in Department 2 when conversion costs is 80% complete.
This direct material is a preservative that does not change the volume.
Spoiled units are discovered at the final inspection and are recognized
then for costing purposes. The physical flow of units for the current
month is presented as follows:
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Process Costing System
Beginning work-in-process in Department 2 (90%
complete with respect to conversion costs)
Transferred in from Department 1
Completed and transferred to finished goods
Spoiled units - all normal
Ending work-in-process in Department 2 (60%
complete with respect to conversion costs)
14,000
76,000
80,000
1,500
8,500
29.
If the manufacturing company uses the weighted-average
method, the equivalent units for direct materials in Department
2 for the current month would be
a. 67,500
b. 80,000
c. 81,500
d. 90,000
(CIA, adapted)
30.
If the manufacturing company uses the FIFO (first-in, first-out)
method, the equivalent units for conversion costs in
Department 2 for the current month would be
a. 72,500
b. 74,000
c. 85,200
d. 86,600
(CIA, adapted)
31.
The Cutting Department is the first stage of Mark Company’s
production cycle. BWIP for this department was 80% complete
as to conversion costs. EWIP was 50% complete. Information
as to conversion costs in the Cutting Department for January is
presented below.
Units
CC
WIP at January 1
25,000
P 22,000
Units started and costs
incurred during January
135,000
143,000
Units completed and transferred
to next department during January 100,000
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Process Costing System
Using the FIFO method, what was the conversion cost of WIP
in the Cutting Department at January 31?
a. P22,000
b. P33,000
c. P39,000
d. P78,000
(AICPA, adapted)
32.
A company employs a process cost system using the first-in,
first-out (FIFO) method. The product passes through both
Department 1 and Department 2 in order to be completed.
Units enter Department 2 upon completion in Department 1.
Additional direct materials are added in Department 2 when the
units have reached the 25% stage of completion with respect to
conversion costs. Conversion costs are added proportionally in
Department 2. The production activity in Department 2. The
production activity in Department 2 for the current month was
as follows:
Beginning work-in-process inventory (40%
complete with respect to conversion costs )
Units transferred in from Department 1
Units to account for
Units completed and transferred to finished
goods
Ending work-in-process inventory (20%
complete with respect to conversion costs)
Units accounted for
15,000
80,000
95,000
85,000
10,000
95,000
How many equivalent units for direct materials were added in
Department 2 for the current month?
a. 70,000 units
b. 80,000 units
c. 85,000 units
d. 95,000 units
(CIA, adapted)
259
Process Costing System
33.
The following data pertain to a company’s cracking department
operations in December:
Units
Completion
Work in process, December 1
20,000
50%
Units started
170,000
Units completed & transferred
180,000
Work in process, December 31
10,000
50%
Materials are added at the beginning of the process and
conversion costs are incurred uniformly throughout the
process. Assuming the use of FIFO method of process
costing, the equivalent units of conversion performed during
December were
a. 170,000 equivalent units
b. 175,000 equivalent units
c. 180,000 equivalent units
d. 185,000 equivalent units
(CIA, adapted)
Questions 34 & 35 are based on the following information.
The Cutting Department is the first stage of Mark Company’s
production cycle. Beginning WIP inventory for this department was
80% complete as to conversion costs. Ending WIP was 50%
complete.
Information as to conversion costs in the Cutting
Department for January is presented as follows:
Units
Conversion Cost
WIP at January 1
25,000
P 22,000
Units started and cost incurred
during January
135,000
143,000
Units completed and transferred
to next department during
January
100,000
34.
Using the Weighted Average method, what was the conversion
cost of WIP in the cutting Department at January 31?
a. P39,070
b. P33,000
c. P39,000
d. P78,000
(AICPA, adapted)
260
Process Costing System
35.
Refer to the preceding question, assuming the use of FIFO
method, what is the per unit conversion cost of goods started
last period and completed this period?
a. P0.88
b. P1.10
c. P1.14
d. P1.30
(Author)
36.
The Hope Company manufactures alarm clocks on an
assembly line basis. On January 1, 2001, Work in process
includes 5,000 units of partially completed inventory. During
the month, an additional 110,000 units were started, and
105,000 units were completed. The ending work-in-process
was 60% complete as to conversion costs. Conversion costs
are added evenly throughout the process. The following
conversion costs were incurred:
Beginning costs for work in process
Total current conversion costs
P 1,500
273,920
The conversion costs assigned to work in process at January
31 totaled P15,360 using the FIFO method of process costing.
What was the percentage of completion as to conversion of the
5,000 units partially completed goods on January 1, 2001?
a. 20%
b. 40%
c. 60%
d. 80%
(Author)
37.
With a beginning inventory of 20,000 units in work in process
that were 30% complete, a hard goods manufacturer
completed 190,000 units in 1998 and finished the year with
15,000 units in work in process that were only 20% complete.
Using the FIFO method, what is the number of equivalent units
of production?
a. 187,000
b. 193,000
c. 196,000
d. 205,000
(CIA, adapted)
261
Process Costing System
38.
A company produces plastic drinking cups and uses a process
cost system. Cups go through three departments: mixing,
molding, and packaging. During the month of June, the
following information is known about the mixing department:
Work in process at June 1 (75%)
10,000 units
Units completed during June
140,000 units
Work in process at June 30 (25%)
20,000 units
Materials are added at two points in the process. Material A is
added at the beginning of the process and Material B at the
midpoint of the mixing process. Conversion costs are incurred
uniformly throughout the mixing process. Assuming a FIFO
costing flow, the equivalent units for Material A, Material B, and
conversion costs, respectively, for the month of June
(assuming no spoilage) are
Material A Material B Conversion Costs
a. 150,000
130,000
137,500
b. 150,000
140,000
135,000
c. 160,000
130,000
135,000
d. 160,000
140,000
137,500
(CIA, adapted)
39.
A company uses weighted average process costing for the
product it manufactures. All direct materials are added at the
beginning of production, and conversion costs are applied
evenly during production. The following data apply to the past
month:
Total units in beginning inventory (30% complete) 1,500
Total units transferred to finished goods inventory 7,400
Total units in ending inventory (60% complete)
2,300
Assuming no spoilage, the equivalent units of production for
materials and conversion costs were:
a. 8,780 and 7,400, respectively
b. 9,700 and 8,330, respectively
c. 8,780 and 9,700, respectively
d. 9,700 and 8,780, respectively
(Author)
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Process Costing System
40.
Rex Co. had the following production for the month of June:
Units
Work-in-process at June 1
10,000
Started during June
40,000
Completed and transferred to finished
goods during June
33,000
Abnormal spoilage incurred
2,000
Work-in-process at June 30
15,000
Materials are added at the beginning of the process. As to
conversion cost, the beginning work-in-process was 70%
completed, and the ending work-in-process was 60%
completed. Spoilage is detected at the end of the process.
Using the weighted average method, the equivalent units for
June, with respect to conversion costs, were
a. 42,000
b. 44,000
c. 45,000
d. 50,000
(AICPA, adapted)
41.
Cutting Department is the first of a two-stage production
process. Spoilage is identified when units complete the Cutting
process. Costs of spoiled units are assigned to units completed
and transferred to the second department in the period
spoilage is identified. The following concerns Cutting’s
conversion costs:
Units
Conversion Costs
Beginning work-in-process
(50% complete)
2,000
P 10,000
Units started during the month
8,000
75,500
Spoilage-normal
500
Units completed and transferred
7,000
Ending work-in-process
(60% complete)
2,500
263
Process Costing System
What was Cutting’s weighted-average
transferred to the second department?
a. P59,850
b. P64,125
c. P67,500
d. P71,250
(AICPA, adapted)
42.
conversion
cost
A company manufactures a product that passes through two
production departments, molding and assembly. Direct
materials are added in the assembly department when
conversion is 50% complete. Conversion costs are incurred
uniformly. The activity in units for the assembly department
during April is as follows:
Units
Work-in-process inventory, April 1
(60% complete as to conversion costs)
5,000
Transferred in from molding department
32,000
Defective at final inspection (within normal limits)
2,500
Transferred out to finished goods inventory
28,500
Work-in-process inventory, April 30
(40% complete as to conversion costs)
6,000
The number of equivalent units for direct materials in the
assembly department for April calculated on the weightedaverage basis is
a. 26,000 units.
b. 31,000 units.
c. 34,000 units.
d. 37,000 units.
(CIA, adapted)
43.
The Wiring Department is the second stage of GLEN
Company’s production cycle. On May 1, the BWIP contained
25,000 units 60% complete as to conversion costs. During
May, 100,000 units were transferred in from the first stage of
GLEN’s production cycle. On May 31, EWIP contained 20,000
units 80% complete as to conversion costs. Materials are
added at the end of the process. Using the weighted-average
method, the EUP on May 31 were
264
Process Costing System
TransferredIn Costs
a.
100,000
b.
125,000
c.
125,000
d.
125,000
(AICPA, adapted)
Materials
125,000
105,000
105,000
125,000
Conversion Costs
100,000
105,000
121,000
121,000
44.
The following information pertains to Clap Co.’s Galo Division
for the month of April:
Number of Units
Cost of Materials
Beginning WIP
15,000
P 5,500
Started in April
40,000
18,000
Units completed
42,000
Ending WIP
12,500
All materials are added at the beginning of the process. Using
the weighted-average method, the cost per equivalent unit for
materials is
a. P0.59
b. P0.55
c. P0.45
d. P0.43
(AICPA, adapted)
45.
Toy Company manufactures product X in a two-stage
production cycle in Department A and B. Materials are added at
the beginning of the process in Department B. Toy uses the
weighted-average method. BWIP (6,000 units) for Department
B was 50% complete as to conversion costs. EWIP (8,000
units) was 75% complete. During February, 12,000 units were
completed and transferred out of Department B. An analysis of
the costs relating WIP and production activity in Department B
for February follows:
Transferred- Materials
Conversion
In Costs
Costs
Costs_
WIP, February 1:
Costs attached
P 12,000
P2,500
P 1,000
February activity:
Costs added
29,000
5,500
5,000
265
Process Costing System
The total cost per equivalent unit transferred out for February of
Product X, rounded to the nearest centavo, was
a. P2.75
b. P2.78
c. P2.82
d. P3.01
(AICPA, adapted)
46.
During March, Bay Company’s Department Y equivalent unit
product costs, computed under the weighted-average method,
were as follows:
Materials
P1
Conversion
3
Transferred-in
5
Materials are introduced at the end of the process in
Department Y. There were 4,000 units (40% complete as to
conversion costs) in WIP at March 31. The total costs assigned
to the March 31 WIP inventory should be
a. P36,000
b. P28,800
c. P27,200
d. P24,800
(AICPA, adapted)
47.
Information for the month of January concerning Department A,
the first stage of Golden Corporation’s production cycle, is as
follows:
Materials
Conversion
BWIP
P 8,000
P 6,000
Current costs
40,000
32,000
Total costs
P 48,000
P 38,000
Equivalent units using
weighted-average method 100,000
95,000
Average unit costs
P 0.48
P 0.40
Goods completed
90,000 units
EWIP
10,000 units
Materials are added at the beginning of the process. The
ending work-in-process is 50% complete as to conversion
costs. How would the total costs accounted for be distributed,
using the weighted-average method?
266
Process Costing System
Goods
Completed
a.
P79,200
b.
P79,200
c.
P86,000
d.
P88,000
(AICPA, adapted)
Ending WorkIn-Process
P6,800
P8,800
P0
P6,800
Questions 48 through 55 are based on the following information.
Ambeth Manufacturing uses a process cost system to manufacture
Dust Density Sensors for the mining industry. The following information
pertains to operations for the month of May 1998.
Units
Beginning work-in-process inventory, May 1
Started in production during May
Completed production during May
Ending work-in-process inventory, May 31
16,000
100,000
92,000
24,000
The beginning inventory was 60% complete for materials and
20% complete for conversion costs.
Costs pertaining to the month of May are as follows:
 Beginning inventory costs are materials, P54,560; direct
labor, P20,320; and factory overhead, P15,240.
 Costs incurred during May are materials used, P468,000;
direct labor, P182,880; and factory overhead, P391,160.
48.
Using first-in, first-out (FIFO) method, the equivalent units of
production (EUP) for materials are
a. 97,600 units.
b. 104,000 units.
c. 107,200 units.
d. 113,600 units.
(CMA, adapted)
49.
Using the FIFO method, the equivalent units of production for
conversion costs are
a. 85,600 units.
b. 95,200 units.
c. 98,400 units.
d. 101,600 units.
(CMA, adapted)
267
Process Costing System
50.
Using the FIFO method, the equivalent unit cost of materials for
May is
a. P4.12
b. P4.50
c. P4.60
d. P4.80
(CMA, adapted)
51.
Using the FIFO method, the equivalent unit conversion cost for
May is
a. P5.65
b. P5.83
c. P6.00
d. P6.20
(CMA, adapted)
52.
Using the FIFO method, the total cost of the units in the ending
work-in-process inventory at May 31, 1998 is
a. P153,168
b. P154,800
c. P155,328
d. P159,960
(CMA, adapted)
53.
Using the weighted-average method, the equivalent unit cost of
materials for May is
a. P4.12
b. P4.50
c. P4.60
d. P5.68
(CMA, adapted)
54.
Using the weighted-average method, the equivalent unit
conversion cost for May is
a. P5.65
b. P5.83
c. P6.00
d. P6.20
(CMA, adapted)
268
Process Costing System
55.
Using the weighted-average method, the total cost of the units
in the ending work-in-process inventory at May 31, 1998 is
a. P153,168
b. P154,800
c. P155,328
d. P159,960
(CMA, adapted)
56.
For the month of May, 1999, the Finishing Department of
ALEX, Inc. had in opening work in process 80% complete units
and in ending work in process 50% complete units. Related
data for the month follow:
Units
Conversion
Costs
Work in process, May 1
50,000
P 88,000
Units started, and costs
incurred during May
270,000
572,000
Units completed and transferred
during May
200,000
If the company uses First-In, First-Out (FIFO) costing, the
conversion cost of the work in process at the end of May would
be:
a. P132,000
b. P156,000
c. P176,000
d. P254,000
(RPCPA, adapted)
57.
Department #1 of BRAVO Corp. summarized the following
production information:
Opening work in process
24,000 units P120,000
Started in production
780,000 units 5,256,000
Completed and transferred
744,000 units
Closing work-in- process,
40% done
60,000 units
The unit cost of production for the period is:
a. P 6.50
b. P 6.89
c. P 7.00
d. P20.22
(RPCPA, adapted)
269
Process Costing System
58.
Department Z of the CAPRICORN Manufacturing Corporation
had the following data for the month of October, 1999:
Beginning work in process, 70% complete
40,000 units
Started in process during the month
300,000 units
Ending work in process, 80% complete
60,000 units
The cost of the beginning work in process was P140,000, and
the production costs for the month amounted to P1,172,000.
How many equivalent production units were completed in
October, 1999?
a. 280,000
b. 300,000
c. 320,000
d. 340,000
(RPCPA, adapted)
59.
At the HI-Q Industrial Co., the process begins with the blending
of various chemicals and ends with the canning of the paint
after which the gallon cans are sent to the Shipping Dept. for
packing and crating.
Direct labor and overhead are
continuously added during processing. Overhead is applied at
the rate of P30 per direct labor hour. Data for the month of
October, 1999 follows:
Physical units:
Work in process, beginning inventory
4,000 gals.
Raw materials – chemicals (7% complete)
Direct labor – (25% complete)
Overhead (25% complete)
Started in process
21,000 gals.
Completed and transferred
20,000 gals.
Work in process, ending inventory:
Raw materials – chemicals (100% complete)
Raw materials – cans (7% complete)
Costs for the month:
Work in process, beginning inventory:
Raw materials – chemicals
P456,000
Direct labor (P100 per hour)
62,500
Overhead
18,750
270
Process Costing System
Current costs added:
Raw materials – chemicals
P 2,284,000
Raw materials – cans
70,000
Direct labor (P100 per hour)
330,000
Overhead
105,000
Using the weighted average method, the cost of “raw materials
– chemicals” in the work in process ending inventory was:
a. P438,400
b. P548,000
c. P571,000
d. P687,000
(RPCPA, adapted)
60.
TAURUS Corp. produced 280,000 complete units of product
plus 10,000 incomplete units which were half done. Direct
materials, which were introduced at the start of processing,
cost P435,000 while conversion cost amounted to P142,500.
There were no beginning inventories. The equivalent units that
were complete as to conversion cost were:
a. 142,500
b. 280,000
c. 285,000
d. 290,000
(RPCPA, adapted)
61.
COMBO, Inc. inputs all materials at the start of processing in
Dept. One. The inventory in process on May 1 of 4,000 units
had material cost of P75,000 and conversion cost of P25,000.
During May, 20,000 units are started in process with material
cost of P375,000 and conversion cost of P150,000. On May
31, the inventory in process of 10,000 units have 100%
material but are only 60% converted. The equivalent production
for conversion cost for the month of May was:
a. 10,000 units
b. 14,000 units
c. 20,000 units
d. 26,000 units
(RPCPA, adapted)
271
Process Costing System
62.
Department Z of BILMOKO, Inc. uses the average cost
method, and the department’s production data for May, 1999
was as follows:
Opening work in process (50% complete)
2,000 units
Placed in process during the month
20,000 units
Closing work in process (60% complete)
2,500 units
Direct labor cost in the opening work in process was P60,000
while direct labor cost added during the month was P780,000.
The direct labor cost per equivalent unit is:
a. P30.00
b. P34.50
c. P37.50
d. P40.00
(RPCPA, adapted)
63.
The following production information for Dept. B of Zenith
Products is for the month of May, 1999:
Received from Dept. A
600,000 units
Completed and transferred to Dept. C 500,000 units
Additional Information:
a. No beginning work in process.
b. Ending work in process is 75% complete.
c. May’s production costs total P2,760,000.
Dept. B’s unit cost of production for May 1999 is:
a. P4.60
b. P4.80
c. P5.02
d. P5.52
(RPCPA, adapted)
64.
For the month of May, 1999, PACMAN Corporation’s
production records disclosed the following data:
Opening work in process (70% complete) 40,000 units
Started in process during the month
300,000 units
Closing work in process (80% complete)
60,000 units
The cost of the opening work in process was P140,000 while
the production costs during the month amounted to
P1,170,000. For the month of May, 1999, the unit cost of
production was:
272
Process Costing System
a. P3.90
b. P4.00
c. P4.18
d. P4.69
(RPCPA, adapted)
65.
The plant manager of NELTEX Products Co. gathered
production statistics for October, 1999 as follows:
Work in process, opening: 8,000 units (all materials but only
½ converted); materials cost, P7,968; labor and overhead
cost, P8,592.
Placed in process, Oct.: 40,000 units; materials cost,
P48,000; labor and overhead cost, P79,872.
Completed and transferred to stock during Oct.: 42,000
units.
Work in process, closing: 6,000 units (all materials but only
3/5 converted).
Using first-in, first-out costing method, the cost of the
completed units would be:
a. P130,320
b. P130,660
c. P131,000
d. P131,040
(RPCPA, adapted)
66.
Refer to number 65 above. Using average costing method,
the cost of the completed units would be:
a. P130,000
b. P130,452
c. P131,000
d. P131,668
(RPCPA, adapted)
67.
In the manufacture of its only product, CHARLIE Manufacturing
Company experiences average evaporation loss of 12% in the
first department, the Cooking Process. Production data for
October, 1999 follows:
In process, October 1 (1/4 complete)
29,000 liters
Started in process during October
50,000 liters
Completed and transferred
61,600 liters
In process, October 31 (1/2 complete) ?
liters
273
Process Costing System
The closing work in process inventory consisted of:
a. 5,000 liters
b. 9,400 liters
c. 10,000 liters
d. 17,500 liters
(RPCPA, adapted)
68.
ZEBRA Mfg. Co. makes a single product in two departments.
The production data for Dept. 2 for May, 2000 follows:
Quantities:
In process, May 1 (40% done)
4,000 units
Received from Dept. 1
30,000 units
Completed and transferred
25,000 units
In process, May 31 (60% done)
6,000 units
Production costs:
May 1
May
Transferred-In
P16,300
P89,100
Materials
3,800
67,500
Conversion cost
1,940
81,000
Materials are added at the start of the process, and losses
normally occur during the early stages of the operation. The
cost of the ending work in process inventory, using average
costing, is:
a. P44,640
b. P45,600
c. P46,800
d. P51,680
(RPCPA, adapted)
69.
Refer to number 68 above. The cost of goods manufactured,
assuming first-in, first-out costing, is:
a. P187,250
b. P193,040
c. P195,250
d. P214,040
(RPCPA, adapted)
70.
ULTRA, Inc. makes a product in two manufacturing processes,
Cutting and Fitting. The product is cut out from precious
stones, and then fitted with additional materials. A process
cost system using average cost flow is used. Relevant data for
the Cutting Dept. for October follow:
274
Process Costing System
Costs charged to department:
Materials
Direct labor
Overhead
71.
72.
Beginning
Inventory
added this
period_
P4,120
522
961
P44,880
12,638
18,779
During October, 9,200 units were transferred to Fitting Dept.
The Cutting Dept. had 1,000 units in process at the end of
September and 800 units still in process at the end of October.
The opening inventory is complete as to materials but only 40%
converted while the closing inventory had 75% materials and
only 25% converted. Per equivalent unit, the average cost in
the Cutting Dept. for October is:
a. P6.40
b. P8.40
c. P8.50
d. P9.50
(RPCPA, adapted)
The Blending Dept. is the first stage in WONDER Co.’s
manufacturing cycle, where materials are introduced at the
start of processing. Relevant data for this department for the
month of May, 1999 are as follows: opening work in process,
60% done, 400,000 units; placed in process during the month,
600,000 units; and, end-of-the-month work in process, 70%
done, 360,000 units. If WONDER Co. uses the weighted
average procedure, what are the equivalent production units,
respectively, for materials and conversion costs?
a.
600,000 & 652,000
b.
600,000 & 892,000
c. 1,000,000 & 652,000
d. 1,000,000 & 892,000
(RPCPA, adapted)
AQUA Pura Water Co. bottles spring water. The water is
filtered in Department A and then bottled in Department B.
AQUA’s only cost for direct materials is incurred in Department
B. The quantity statistics for the period just ended follow:
275
Process Costing System
Department A:
Units started in process
110,000
Units transferred to Dept. B
80,000
Units in process, end
30,000
Department B:
Units transferred to finished stock
66,000
Units in process, end
14,000
The ending work in process in both departments are 50% done.
What was Department A’s equivalent units of production for
direct materials?
a. –0b. 80,000
c. 95,000
d. 110,000
(RPCPA, adapted)
73.
PROCTER & GAMBLE, Inc.’s production process begins in the
Extruding Dept. Data for this dept. for October 1999 are shown
below:
Opening work in process (50% complete)
40,000
Started in production during the month
240,000
Closing work in process (60% complete)
25,000
Direct materials are added at the start of operation. Assuming
weighted average method was used, what was the extruding
Department’s equivalent units of production for conversion
cost?
a. 240,000
b. 250,000
c. 260,000
d. 270,000
(RPCPA, adapted)
74.
Pure Spring Water Co. bottles spring water. The spring water
first undergoes filtration in Department 1 and is eventually
bottled in Department 2. A quantity schedule for 1999 follows:
Department 1:
Units started in process
Units transferred to Dept. 2
Units received from Dept. 1
276
110,000
80,000
30,000
Process Costing System
Department 2:
Units received from Dept. 1
Units transferred to finished stock
Units in process, end
80,000
61,400
18,600
Units in process at the end in both departments are 72%
through the process. In Department 2, what is the equivalent
production for conversion cost?
a. 61,400
b. 68,929
c. 74,792
d. 80,000
(RPCPA, adapted)
75.
Based on the following information concerning production in the
Forging Department of AGREED Co. determine the unit cost
per equivalent unit of conversion. All direct materials are
placed into the process at the beginning of production, and
conversion costs are incurred evenly throughout the process.
The beginning inventory consists of P42,000 of direct materials
and P20,000 of conversion costs.
Work In Process
Beg. 1,200 units 62,000
Direct materials 150,000
Direct labor
39,960
Overhead
39,960
Transferred out
(5,000 units)
253,470
End. 1,000 units
38,450
WIP inventory is 80% and 40% complete as to beg. & ending
balance, respectively.
a. P32.00
b. P18.00
c. P18.50
d. P31.25
(Author)
277
Process Costing System
76.
Department A is the first stage of Davao Company's
production cycle. The following information is available for
conversion cost for the month of April:
Units
Work in process, April 1 (40% complete)
40,000
Started in April
320,000
Completed in April, and transferred to
next department
340,000
Work-in-process, April 30 (60% complete)
20,000
Using FIFO method, the equivalent
conversion cost calculations are:
a. 320,000.
b. 336,000.
c. 352,000.
d. 360,000.
(AICPA, adapted)
77.
finished units for
Department A is the first stage of Manila Company's production
cycle. The following information is available for conversion
costs for the month of April 2001:
Units
Work in process, beg. (60% complete)
20,000
Started in April
340,000
Completed in April, and transferred to
Dept. B.
320,000
Work-in-process, ending (40% complete)
40,000
Using FIFO method, the equivalent units for the conversion
cost calculation are
a. 320,000.
b. 324,000.
c. 336,000.
d. 360,000.
(AICPA, adapted)
278
Process Costing System
78.
Rizal Company computed the flow of physical units completed
for department M for the month of March 2001 as follows:
Units completed:
From work-in-process on March 1, 2001
From March production
15,000
45,000
60,000
Materials are added at the beginning of the process. The
12,000 units of work-in-process at March 31, 2001, were 80%
complete as to conversion costs. The work-in-process at March
1, 2001, was 60% complete as to conversion costs. Using the
FIFO method, the equivalent units for March conversion costs
were:
a. P55,200.
b. P57,000.
c. P60,600.
d. P63,600.
(AICPA, adapted)
79.
A factory transferred 8,800 completed units during its second
period of operations. At the beginning of the period, 400 units
were 75% complete. At the end of the period, 800 units were
50% complete. Assume the FIFO costing method is used. The
equivalent production for the period was
a. 9,000 units.
b. 8,900 units.
c. 8,800 units.
d. 8,700 units.
(CIA, adapted)
279
Process Costing System
80.
Waling-waling Company has a process cost system using the
FIFO cost flow method. All materials are introduced at the
beginning of the process in department 1. The following
information is available for the month of January 2001:
Units
Work-in-process, 1/1/01 (40% complete
as to conversion costs)
500
Started in January
2,000
Transferred to dept. 2 during January
2,100
Work in process, 1/31/01 (25% complete
as to conversion costs)
400
What are the equivalent units of production (EUP) for the
month of January 2001?
Materials Conversion
a.
2,500
2,200
b.
2,500
1,900
c.
2,000
2,200
d.
2,000
2,000
(AICPA, adapted)
81.
A company uses the FIFO method of costing in a process
costing system. Material is added at the beginning of the
process in Department A, and conversion costs are incurred
uniformly throughout the process. Beginning work-in-process
inventory on April 1 in Department A consisted of 50,000 units
estimated to be 30% complete. During April, 150,000 units
were started in Department A, and 160,000 units were
completed and transferred to Department B. Ending work-inprocess inventory on April 30 in Department A was estimated
to be 20% complete. What were the total equivalent units in
Department A for April for materials and conversion costs,
respectively?
a. 150,000 and 133,000.
b. 150,000 and 153,000.
c. 200,000 and 133,000.
d. 200,000 and 153,000.
(AICPA, adapted)
280
Process Costing System
82.
The Ice Company had computed the physical flow (of physical
units) for Department A, for the month of April 2001 as follows:
Units completed:
From work-in-process on April 1, 2001
From April production
10,000
30,000
40,000
Materials are added at the beginning of the process. Units of
work in process at April 30, 2001 were 8,000. The work in
process at April 1, 2001, was 80% complete as to conversion
costs and the work in process at April 30, 2001, was 60%
complete as to conversion costs. What are the equivalent units
of production for the month of April 2001 using the FIFO
method?
Materials
Conversion Costs
a. 38,000
36,800
b. 38,000
38,000
c. 48,000
44,800
d. 48,000
48,000
(AICPA, adapted)
Questions 83 through 85 are based on the following information.
Janice Manufacturing Company uses a process cost system to
account for the costs of its only product, Product D. Production begins
in the fabrication department where units of raw material are molded
into various connecting parts. After fabrication is complete, the units
are transferred to the assembly department. After assembly is
complete, the units are transferred to a packaging department where
packing material is placed around the units. After the units are ready
for shipping, they are sent to a shipping area.
At year-end, June 30, the following inventory of Product D is on hand:



No unused raw material or packing material.
Fabrication department:
300 units, 1/3 complete as to raw material and 1/2 complete
as to direct labor.
Assembly department:
1,000 units, 2/5 complete as to direct labor.
281
Process Costing System


Packaging department:
100 units, 3/4 complete as to packing material and 1/4
complete as to direct labor.
Shipping area: 400 units
83.
The number of equivalent units of raw material in all inventories
at June 30 is:
a.
300.
b.
100.
c. 1,600.
d.
925.
(AICPA, adapted)
84.
The number of equivalent units of fabrication department direct
labor in all inventories at June 30 is:
a. 1,650.
b.
150.
c.
300.
d.
975.
(AICPA, adapted)
85.
The number of equivalent units of packing material in all
inventories at June 30 is:
a. 75.
b. 475.
c. 100.
d. 425.
(AICPA, adapted)
282
Process Costing System
Questions 86 through 88 are based on the following information.
Scissors Department is the first stage of May Company's production
cycle. Conversion costs for this department were 80% complete as to
beginning work in process and 50% complete as to ending work in
process.
Information as to conversion costs in the Scissors
Department for January is presented below:
Units
Conversion Costs
Work in process at January 1 25,000
P 2,000
Units started and costs
incurred during January
135,000
143,000
Units completed and transferred to next department
during January
100,000
86.
Using the FIFO method, what was the conversion cost of workin-process in the Scissors Department at January 31?
a. P33,000.
b. P38,100.
c. P39,000.
d. P45,000.
(AICPA, adapted)
87.
What were the conversion costs per equivalent unit of
production last period and this period, respectively?
a. P1.10 and P1.30.
b. P1.10 and P1.43.
c. P1.30 and P1.30.
d. P1.30 and P1.43.
(AICPA, adapted)
88.
What is the per unit conversion cost of goods started last
period and completed this period?
a. P22,000/25,000.
b. P1.10.
c. P28,500/25,000.
d. P1.30.
(AICPA, adapted)
283
Process Costing System
89.
Beginning work-in-process was 60% complete as to conversion
costs, and ending work-in-process was 45% complete as to
conversion costs. The peso amount of the conversion cost
included in ending work-in-process (using the weighted
average method) is determined by multiplying the average unit
conversion costs by what percentage of the total units in ending
work-in-process?
a. 100%
b. 60%
c. 55%
d. 45%
(AICPA, adapted)
90.
Milo, Inc. had 8,000 units of work-in-process in its Department
N on March 1 which were 50% complete as to conversion
costs. Materials are introduced at the beginning of the process.
During March, 17,000 units were started, 18,000 units were
completed, and there were 2,000 units of normal spoilage. Milo
had 5,000 units of work-in-process at March 31 which were
60% complete as to conversion costs. Under Milo's cost
accounting system, spoiled units reduce the number of units
over which total cost can be spread. Using the weighted
average method, the equivalent units for March for conversion
costs were:
a. 17,000.
b. 19,000.
c. 21,000.
d. 23,000.
(AICPA, adapted)
284
Process Costing System
91.
Materials are added at the start of the process in Cagayan
Company's blending department, the first stage of the
production cycle.
The following information is available for July:
Units
Work in process, July 1, (60% complete as
to conversion costs)
60,000
Started in July
150,000
Transferred to the next department
110,000
Lost in production
30,000
Work-in-process, July 31, (50% complete as
to conversion costs)
70,000
Under Cagayan's cost accounting system, the costs incurred
on the lost units are absorbed by the remaining good units.
Using the weighted average method, what are the equivalent
units for materials unit cost calculation?
a. 120,000.
b. 145,000.
c. 180,000.
d. 210,000.
(AICPA, adapted)
92.
Penshoppe Company adds materials at the beginning of the
process in Department A. Information concerning the materials
used in April production is as follows:
Units
Work-in-process at April 1
10,000
Started during April
50,000
Completed and transferred to next
department during April
36,000
Normal spoilage incurred
3,000
Abnormal spoilage incurred
5,000
Work-in-process at April 30
16,000
Under Penshoppe's cost accounting system, costs of normal
spoilage are treated as a part of the costs of the good units
produced. The costs of abnormal spoilage are charged to
factory overhead, however. Using the weighted average
method, what are the equivalent units of production (EUP) for
the materials unit cost calculation for the month of April?
285
Process Costing System
a. 47,000.
b. 52,000.
c. 55,000.
d. 57,000.
(AICPA, adapted)
Questions 93 and 94 are based on the following information.
Bobson Company had 6,000 units in work-in-process at January 1,
2002, which were 60% complete as to conversion costs. During
January 20,000 units were completed. At January 31, 2002, 8,000
units remained in work in process which were 40% complete as to
conversion costs. Materials are added at the beginning of the process.
93.
Using the weighted average method, the equivalent units for
January for conversion cost were:
a. 19,600.
b. 22,400.
c. 23,200.
d. 25,600
(AICPA, adapted)
94.
How many units were started during January?
a. 18,000.
b. 19,600.
c. 20,000.
d. 22,000.
(AICPA, adapted)
95.
Sahara Corporation's production cycle starts in the Mixing
Department. The following information is available for April:
Work in process, April 1 (50% complete)
Started in April
Work in process, April 30 (60% complete)
Units
40,000
240,000
25,000
Materials are added at the beginning of the process in the
Mixing Department. Using the weighted average method, what
are the equivalent units of production for the month of April?
286
Process Costing System
Materials Conversion
a. 240,000
250,000
b. 255,000
255,000
c. 270,000
280,000
d. 280,000
270,000
(AICPA, adapted)
96.
The Wiring Department is the second stage of Jay-D
Company's production cycle. On May 1, the beginning work in
process contained 25,000 units which were 60% complete as
to conversion costs.
During May, 100,000 units were
transferred in from the first stage of Jay-D's production cycle.
On May 31, ending work-in-process contained 20,000 units
which were 80% complete as to conversion costs. Materials
are added at the end of the process. Using the weighted
average method, the equivalent units of production on May 31
were:
Trans. In Costs Materials
Conversion Costs
a.
100,000
125,000
100,000
b.
125,000
105,000
105,000
c.
125,000
105,000
121,000
d.
125,000
125,000
121,000
(AICPA, adapted)
97.
Lee Company adds materials at the beginning of the process in
department M. Data concerning the materials used in March
2001 production are as follows:
Units
Work in process at March 1
16,000
Started during March
34,000
Completed and transferred to next
department during March
36,000
Normal spoilage incurred
4,000
Work in process at March 31
10,000
Using the weighted average method, the equivalent units for
the materials unit cost calculation are:
a. 30,000.
b. 34,000.
c. 40,000.
d. 46,000.
(AICPA, adapted)
287
Process Costing System
98.
Information concerning Department A of Chancellor Company
for June is as follows:
Materials
Units
Costs
Beginning work in process
17,000
P12,800
Started in June
82,000
69,700
Units completed
85,000
Ending work in process
14,000
All materials are added at the beginning of the process. Using
the weighted average method, the cost per equivalent unit for
materials is:
a. P0.83.
b. P0.85.
c. P0.97.
d. P1.01.
(AICPA, adapted)
99.
Freego Company adds materials at the beginning of the
process in department N. Conversion costs were 75%
complete as to the 8,000 units in work in process at May 1 and
50% complete as 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 is
as follows:
Costs
Materials Conversion
Work in process, May 1
P 9,600
P 4,800
Costs added in May
15,600
14,400
Using the weighted average method, the total cost per
equivalent unit for May was:
a. P2.47.
b. P2.50.
c. P2.68.
d. P3.16.
(AICPA, adapted)
288
Process Costing System
100.
Jag Company manufactures product X in a two-stage
production cycle in Departments A and B. Materials are added
at the beginning of the process in Department B. Jag uses the
weighted average method. Conversion costs for Department B
were 50% complete as to the 6,000 units in beginning work in
process and 75% complete as to the 8,000 units in ending work
in process. 12,000 units were completed and transferred out of
Department B during February. An analysis of the costs
relating to work-in-process and production activity in
Department B for February follows:
Transferred Materials Conversion
In costs
costs
costs
Work in process,
February 1:
Cost attached
P12,000
P2,500
P1,000
February activity:
Costs added
P29,000
P5,500
P5,000
The total cost per equivalent unit transferred-out for February of
Product X, rounded to the nearest centavo, was:
a. P2.75.
b. P2.78.
c. P2.82.
d. P2.85.
(AICPA, adapted)
101.
ABC Company manufactures product X. It adds materials in
the beginning of the process in Department A, which is the first
of the two stages of its production cycle. The following are the
information concerning the materials used in Department A in
September, 2001:
Materials
Units
Costs
Work-in-process, September 1
4,000
P 2,000
Started during September
48,000
23,480
Units completed, and transferred
to next department
during September
30,000
289
Process Costing System
Using the weighted average method, the materials cost of the
work-in-process at September 30, 2001 is:
a. P 5,390.
b. P10,780.
c. P11,000.
d. P14,700.
(RPCPA, adapted)
102.
During March 2001, Polo Co.'s Department Y equivalent unit
product costs, computed under the weighted average method,
were as follows:
Materials
P1.00
Conversion
3.00
Transferred-in
5.00
Materials are introduced at the end of the process in
Department Y. There were 4,000 units (40% complete as to
conversion cost) in work-in-process at March 31, 2001. The
total costs assigned to the March 31, 2001, work-in-process
inventory should be:
a. P36,000.
b. P28,800.
c. P27,200.
d. P24,800.
(AICPA, adapted)
103.
Information for the month of May concerning Department A, the
first stage of White Corporation's production cycle, is as
follows:
Conversion
Materials
Costs
Work in process, May 1
P 4,000 P 3,000
Current costs
20,000
16,000
Total costs
P24,000 P19,000
Equivalent units based on
weighted average method
Average unit costs
Goods completed
Work-in-process, ending
290
100,000
95,000
P 0.24
P 0.20
90,000 units
10,000 units
Process Costing System
Materials costs are added at the beginning of the process. The
ending work-in-process is 50% complete as to conversion
costs. How would the total costs accounted for be distributed,
using the weighted-average method?
Goods
Work in
Completed Process, End
a. P39,600
P3,400
b. P39,600
P4,400
c. P43,000
P-0d. P44,000
P3,400
(AICPA, adapted)
104.
Information for the month of January concerning Department A,
the first stage of Golden Corporation's production cycle, is as
follows:
Materials Conversion
Beginning work in process P 8,000
P 6,000
Current costs
40,000
32,000
Total costs
P 48,000
P 38,000
Equivalent units using
weighted average method
Average
Goods completed
Ending work in process
100,000
95,000
P 0.48
P 0.40
90,000 units
10,000 units
Materials are added at the beginning of the process. The
ending work-in-process is 50% complete as to conversion
costs. How would the total costs accounted for be distributed,
using the weighted average method?
Goods
Ending work Completed
In - process
a. P 79,200
P6,800
b. P 79,200
P8,800
c. P 86,000
P-0d. P 88,000
P6,800
(AICPA, adapted)
291
Process Costing System
105.
During April, Clinton Company's department B equivalent unit
product costs, computed under the weighted average method,
were as follows:
Materials
Conversion
Transferred-in
P1.00
3.00
5.00
Materials are introduced at the end of the process in
department B. There were 2,000 units (40% complete as to
conversion costs) in work-in-process at April 30. The total costs
assigned to April 30 work-in-process inventory should be:
a. P12,400.
b. P13,600.
c. P14,400.
d. P18,000.
(AICPA, adapted)
Questions 106 &107 are based on the following information.
On April 1, 2001, the Phils Company had 6,000 units of work-inprocess in Department B, the second and last stage of their production
cycle. The costs attached to these 6,000 units were P12,000 of costs
transferred-in from Department A, P2,500 of material costs added in
Department B and P2,000 of conversion cost added in Department B.
Materials are added at the beginning of the process in Department B.
Conversion was 50% complete on April 1, 2001. During April 14,000
units were transferred-in from Department A at a cost of P27,000; and
material costs of P 3,500 and conversion costs of P3,000 were added
in Department B. On April 30, 2001, Department B had 5,000 units of
work-in-process 60% complete as to conversion costs. The costs
attached to these 5,000 units were P10,500 of costs transferred in
from Department A, P1,800 of material costs added in Department B
and P800 of conversion cost added in Department B.
292
Process Costing System
106.
Using the weighted-average method, what were the equivalent
units for the month of April?
Transferred-in
from Department A
a.
15,000
b.
19,000
c.
20,000
d.
25,000
(AICPA, adapted)
107.
Materials
15,000
19,000
20,000
25,000
Conversion
15,000
20,000
18,000
20,000
Using the weighted-average method, what was the cost per
equivalent unit for conversion cost?
a. P4,200/15,000.
b. P5,800/18,000.
c. P5,800/20,000.
d. P5,000/18,000.
(AICPA, adapted)
Questions 108 & 109 are based on the following information.
The following data for the month of September were taken from the
cost records of Department A of New Born Products Company which
uses the average costing method:
Opening inventory of work-in-process:
Units -- 500 (with all materials needed and 50% of
labor and overhead)
Costs -- Materials
P2,400
Labor
1,500
Factory overhead
760
Put into production:
Units -- 5,000
Costs -- Materials
P25,100
Labor
19,380
Factory overhead
14,900
Completed and transferred -- 4,800 units
Ending inventory of work-in-process:
Units -- 700 (with all materials, and 60% of labor and
overhead)
293
Process Costing System
108.
The equivalent production for the month for labor is
a. 5,000.
b. 5,220.
c. 4,970.
d. 5,200.
(RPCPA, adapted)
109.
The unit cost for material for the month is
a. P5.00.
b. P5.50.
c. P4.00.
d. P4.50.
(RPCPA, adapted)
Questions 110 & 111 are based on the following information.
Information concerning Department B of the Tobby Company is as
follows:
Transferred
Units
in
Beginning work-in-process
5,000
P 2,900
Units transferred-in
35,000
17,500
40,000
P 20,400
Units completed
Ending work-in-process
Beginning WIP
Units transferred-in
37,000
3,000
Materials
P --25,500
P25,500
Conversion
P 3,400
15,000
P 18,400
Total Costs
P 6,300
58,000
P 64,300
Conversion costs were 20% complete as to the beginning
work-in-process and 40% complete as to the ending work-inprocess. All materials are added at the end of the process.
Toby uses the weighted-average method.
294
Process Costing System
110.
The cost per equivalent unit for conversion costs, rounded to
the nearest centavo, is
a. P0.44.
b. P0.46.
c. P0.48.
d. P0.50.
(AICPA, adapted)
111.
The portion of the total cost of ending work-in-process
attributable to transferred-in cost is
a. P-0b. P1,500.
c. P1,530.
d. P1,650.
(AICPA, adapted)
Questions 112 through 114 are based on the following information.
The following data for September were taken from the cost records
of the Mixing Department, Hair Manufacturing Company which
uses the average costing method:
Costs
Work-in-process, August 31:
Materials
Labor
Factory overhead
Work-in-process, August 31
(All material,50% converted)
Put into process during month
Work-in-process, September 30
(All material, 60% converted)
Put into process during the month:
Material
Labor
Factory overhead
112.
P24,000
15,000
7,600
1,000 units
10,000 units
1,400 units
P251,000
193,800
149,000
Assuming no lost units, the unit cost for labor was:
a. P10.
b. P15.
c. P20.
d. P25.
(RPCPA, adapted)
295
Process Costing System
113.
The total costs of the units completed and transferred to the
next department was:
a. P576,000.
b. P605,400.
c. P640,400.
d. P693,800.
(RPCPA, adapted)
114.
The total costs of the work-in-process on September 30 was:
a. P 29,400.
b. P 46,600.
c. P 64,400.
d. P103,800.
(RPCPA, adapted)
Questions 115 though 118 are based on the following information.
The Cost Department of Masbate Corporation operates a process cost
system using the average method. Production records showed the
following data for one of the three production departments:
Product received from previous
department
Product finished and sent to next
department
Product finished and remaining
in this department
Product unfinished in this department
100,000 kilos
71,840 kilos
4,160 kilos
24,000 kilos
In this department additional material is added to the work received
from the preceding department. Three distinctly different types of
materials are used at three separate stages of production in this
department:



Material A is added at the start of the process.
Material B is added when the process is one-fourth completed.
Material C is added when the process is three-fourth completed.
Labor and factory overhead are incurred at a uniform rate
throughout the manufacturing process in this department.
Examination of the unfinished work discloses that:
¼ was 7/8 completed.
½ was ½ completed.
¼ was 1/6 completed.
296
Process Costing System
115.
The equivalent production figure for material A would be:
a. 80,000.
b. 90,000.
c. 100,000.
d. 85,000.
(Adapted)
116.
The equivalent production figure for material B would be:
a. 95,000.
b. 92,000.
c. 94,000.
d. 90,000.
(Adapted)
117.
The equivalent production figure for material C would be:
a. 85,000.
b. 80,000.
c. 82,000.
d. 76,000.
(Adapted)
118.
The equivalent production figure for labor and factory overhead
would be:
a. 92,500.
b. 88,250.
c. 85,250.
d. 90,350.
(Adapted)
Questions 119 and 120 are based on the following information.
Department II of Winston Manufacturing Company presents their
production data for the month of May, 2000 below:
Opening inventory, 3/8 completed
Started in process
Transferred
Closing inventory, ½ completed
¾ completed
297
4,000 units
10,000 units
9,000 units
4,000 units
4,000 units
Process Costing System
119.
Using the first-in, first-out method, the equivalent production of
Department II for the month of May is
a. 12,500 units.
b. 15,500 units.
c. 18, 000 units.
d. 19,000 units.
(RPCPA, adapted)
120.
Assuming the average cost method is used, the equivalent
production figure for Department II is
a. 12,500 units.
b. 14,000 units.
c. 15,500 units.
d. 18,000 units.
(RPCPA, adapted)
Questions 121 and 122 are based on the following information.
The Sampaguita Corporation, engaged in manufacturing business
uses process costing, and gave us the following production data
from three different situations. Stages of completion of inventories
apply to all cost elements.
(1) Started in process, 6,500 units; completed, 5,500 units; in
process, end, 400 units 50% completed and 600 units 25%
completed.
(2) Beginning inventory, 6,250 units 40% completed; started in
process, 25,000 units; completed, 26,250 units; in process at
the end, 3,000 units 50% completed and 2,000 units 25%
completed.
(3) Beginning inventory, 6,000 units, 30% completed; started in
process, 13,000 units; lost in process, 500 units from
production started this period (loss was normal and occurred
throughout the production process); completed, 14,000 units;
in process at the end of the period, 3,000 units, 50%
completed and 1,500 units, 75% completed.
298
Process Costing System
121.
Using the FIFO costing, the equivalent production figures are
(1)
(2)
(3)
a. 5,580
27,550
18,425
b. 5,850
25,750
14,825
c. 8,550
20,775
15,428
d. 5,058
20,775
12,524
(RPCPA, adapted)
122.
Using average costing, the equivalent production figure are
(1)
(2)
(3)
a. 5,580
22,850
15,662
b. 5,085
25,580
12,665
c. 5,508
28,025
16,265
d. 5,850
28,250
16,625
(RPCPA, adapted)
123.
Wilson, Incorporated had 8,000 units of work-in-process in
department A on October 1. These units were 60% complete
as to conversion costs. Materials are added at the beginning of
the process. During the month of October 34,000 units were
started and 36,000 units were completed. Wilson had 6,000
units of work-in-process on October 31. These units were 80%
complete as to conversion costs. By how much did the
equivalent units for October using the weighted average
method exceed the equivalent units for October using the FIFO
method?
Materials
Conversion Costs
a.
0
3,200
b.
0
4,800
c.
8,000
3,200
d.
8,000
4,800
(AICPA, adapted)
299
Process Costing System
124.
On November 1, Ding Company had 20,000 units of work-inprocess in Department No.1 which were 100% complete as to
material costs and 20% complete as 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. Work-in-process on November 30 was
100% complete as to conversion costs. By what amount would
the equivalent units 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.
(RPCPA, adapted)
Questions 125 and 126 are based on the following information.
Beginning work-in-process has 10,000 units, 80% complete as to
materials and 60% complete as to conversion costs. Ending work-inprocess has 15,000 units, 75% complete as to material cost and 50%
complete as to conversion costs. 30,000 units were completed and
transferred during the period.
125.
What are the equivalent units under FIFO for materials and
conversion costs?
Materials Conversion Costs
a.
37,000
35,500
b.
33,250
31,500
c.
34,000
32,500
d.
41,250
37,500
(AICPA, adapted)
126.
What are the equivalent units under the weighted average
method for material and conversion costs?
Materials
Conversion Costs
a.
37,000
35,500
b.
33,250
31,500
c.
34,000
32,500
d.
41,250
37,500
(AICPA, adapted)
300
Process Costing System
127.
Write , Inc., instituted a new process in October 2001. During
October, 10,000 units were started in Department A. Of the
units started, 1,000 were lost in the process, 7,000 were
transferred to Department B, and 2,000 remained in work-inprocess at October 31, 2001. The work-in-process at October
31, 2001, was 100% complete as to material costs and 50%
complete as to conversion costs. Material costs of P27,000 and
conversion costs of P40, 000 were charged to Department A in
October. What were the total costs transferred to Department
B?
a. P46,900.
b. P53,600.
c. P56,000.
d. P57,120.
(AICPA, adapted)
 END 
301