Chapter 6—Process Costing
MULTIPLE CHOICE
1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing
environments?
a. standard
b. actual
c. process
d. job order
ANS: C
2. Process costing is used in companies that
a. engage in road and bridge construction.
b. produce sailboats made to customer specifications.
c. produce bricks for sale to the public.
d. construct houses according to customer plans.
ANS: C
3. A producer of ____ would not use a process costing system.
a. gasoline
b. potato chips
c. blank videotapes
d. stained glass windows
ANS: D
4. A process costing system is used by a company that
a. produces heterogeneous products.
b. produces items by special request of customers.
c. produces homogeneous products.
d. accumulates costs by job.
5.
6.
7.
8.
ANS: C
Which is the best cost accumulation procedure to use for continuous mass production of like units? a.
actual
b. standard
c. job order
d. process
ANS: D
Equivalent units of production are equal to the
a. units completed by a production department in the period.
b. number of units worked on during the period by a production department.
c. number of whole units that could have been completed if all work of the period had been used to produce
whole units.
d. identifiable units existing at the end of the period in a production department.
ANS: C
In a process costing system using the weighted average method, cost per equivalent unit for a given cost
component is found by dividing which of the following by EUP? a.
only current period cost
b. current period cost plus the cost of beginning inventory
c. current period cost less the cost of beginning inventory
d. current period cost plus the cost of ending inventory
ANS: B
The weighted average method is thought by some accountants to be inferior to the FIFO method because it
Chapter 6
a.
b.
c.
d.
9.
2
is more difficult to apply.
only considers the last units worked on.
ignores work performed in subsequent periods.
commingles costs of two periods.
ANS: D
The first step in determining the cost per EUP per cost component under the weighted average method is to
a. add the beginning Work in Process Inventory cost to the current period's production cost.
b. divide the current period's production cost by the equivalent units.
c. subtract the beginning Work in Process Inventory cost from the current period's production cost.
d. divide the current period's production cost into the EUP.
ANS: A
10. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the
equivalent units
a. started and completed during the period.
b. residing in beginning Work in Process Inventory.
c. residing in ending Work in Process Inventory.
d. uncompleted in Work in Process Inventory.
ANS: B
11. EUP calculations for standard process costing are the same as
a. the EUP calculations for weighted average process costing.
b. the EUP calculations for FIFO process costing.
c. LIFO inventory costing for merchandise.
d. the EUP calculations for LIFO process costing.
ANS: B
12. In a FIFO process costing system, which of the following are assumed to be completed first in the current
period?
a. units started this period
b. units started last period
c. units transferred out
d. units still in process
ANS: B
13. To compute equivalent units of production using the FIFO method of process costing, work for the current
period must be stated in units
a. completed during the period and units in ending inventory.
b. completed from beginning inventory, units started and completed during the period, and units partially
completed 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
14. The FIFO method of process costing will produce the same cost of goods transferred out amount as the
weighted average method when
a. the goods produced are homogeneous.
b. there is no beginning Work in Process Inventory.
c. there is no ending Work in Process Inventory.
d. beginning and ending Work in Process Inventories are each 50 percent complete.
ANS: B
15. The primary difference between the FIFO and weighted average methods of process costing is
a. in the treatment of beginning Work in Process Inventory.
b. in the treatment of current period production costs.
c. in the treatment of spoiled units.
d. none of the above.
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3
ANS: A
16. Material is added at the beginning of a process in a process costing system. The beginning Work in Process
Inventory for the process was 30 percent complete as to conversion costs. Using the FIFO method of costing,
the number of equivalent units of material for the process during this period is equal to the
a. beginning inventory this period for the process.
b. units started and completed this period in the process.
c. units started this period in the process plus the beginning Work in Process Inventory.
d. units started and completed this period plus the units in ending Work in Process Inventory.
ANS: D
17. In a cost of production report using process costing, transferred-in costs are similar to the
a. cost of material added at the beginning of production.
b. conversion cost added during the period.
c. cost transferred out to the next department.
d. cost included in beginning inventory.
ANS: A
18. In a process costing system, the journal entry to record the transfer of goods from Department #2 to
Finished Goods Inventory is a
a. debit Work in Process Inventory #2, credit Finished Goods Inventory.
b. debit Finished Goods Inventory, credit Work in Process Inventory #1.
c. debit Finished Goods Inventory, credit Work in Process Inventory #2.
d. debit Cost of Goods Sold, credit Work in Process Inventory #2.
ANS: C
19. Transferred-in cost represents the cost from
a. the last department only.
b. the last production cycle.
c. all prior departments.
d. the current period only.
ANS: C
20. Which of the following is(are) the same between the weighted average and FIFO methods of calculating
EUPs?
Units to
account for
a.
b.
c.
d.
no
yes
yes
yes
EUP
calculations
yes
yes
no
no
Total cost to
account for
no
yes
no
yes
ANS: D
21. Process costing techniques should be used in assigning costs to products
a. if a product is manufactured on the basis of each order received.
b. when production is only partially completed during the accounting period.
c. if a product is composed of mass-produced homogeneous units.
d. whenever standard-costing techniques should not be used.
ANS: C
22. Averaging the total cost of completed beginning work-in-process inventory and units started and
completed over all units transferred out is known as a.
strict FIFO.
b. modified FIFO.
c. weighted average costing.
d. normal costing.
ANS: B
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4
23. A process costing system
a. cannot use standard costs.
b. restates Work in Process Inventory in terms of completed units.
c. accumulates costs by job rather than by department.
d. assigns direct labor and manufacturing overhead costs separately to units of production.
ANS: B
Calculates EUPs
Assigns costs to inventories
a. no
no b. no
d. yes
no
yes c. yes
yes
ANS: C
25.
A process costing system
Calculates average cost
Determines total units to
per whole unit account for
a. yes
no d. no
yes b. no
yes
no c. yes
ANS: D
26. A hybrid costing system combines characteristics of a. job order and standard costing systems. b.
order and process costing systems. c.
process and standard costing systems. d. job order and normal
costing systems.
ANS: B
27. When standard costs are used in process costing,
a. variances can be measured during the production period.
b. total costs rather than current production and current costs are used.
c. process costing calculations are made simpler.
d. the weighted average method of calculating EUPs makes computing transferred-out costs easier.
ANS: D
28. Which of the following is subtracted from weighted average EUP to derive FIFO EUP?
a. beginning WIP EUP completed in current period
b. beginning WIP EUP produced in prior period
c. ending WIP EUP not completed
d. ending WIP EUP completed
ANS: B
29. The cost of abnormal continuous losses is
a. considered a product cost.
b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis.
c. written off as a loss on an equivalent unit basis.
d. absorbed by all units past the inspection point.
ANS: C
30. Abnormal spoilage can be continuous
a.
b.
c.
d.
yes
no
yes
no
ANS: C
no
no
yes
yes
discrete
job
Chapter 6
5
31. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit
schedule, these units are considered a.
normal and discrete.
b. normal and continuous.
c. abnormal and discrete.
d. abnormal and continuous.
ANS: D
32. A continuous loss
a. occurs unevenly throughout a process.
b. never occurs during the production process.
c. always occurs at the same place in a production process.
d. occurs evenly throughout the production process.
ANS: D
33. Which of the following would be considered a discrete loss in a production process?
a. adding the correct ingredients to make a bottle of ketchup
b. putting the appropriate components together for a stereo
c. adding the wrong components when assembling a stereo
d. putting the appropriate pieces for a bike in the box
ANS: C
34. The method of neglect handles spoilage that is
a. discrete and abnormal.
b. discrete and normal.
c. continuous and abnormal.
d. continuous and normal.
ANS: D
35. The cost of normal discrete losses is
a. absorbed by all units past the inspection point on an equivalent unit basis.
b. absorbed by all units in ending inventory.
c. considered a period cost.
d. written off as a loss on an equivalent unit basis.
ANS: A
36. The cost of abnormal continuous losses is
a. considered a product cost.
b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis.
c. written off as a loss on an equivalent unit basis.
d. absorbed by all units past the inspection point.
ANS: C
37. Normal spoilage units resulting from a continuous process
a. are extended to the EUP schedule.
b. result in a higher unit cost for the good units produced.
c. result in a loss being incurred.
d. cause estimated overhead to increase.
ANS: B
38. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit
schedule, these units are considered a.
normal and discrete.
b. normal and continuous.
c. abnormal and discrete.
d. abnormal and continuous.
ANS: D
39. Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?
a. Miscellaneous Revenue
b. Loss from Spoilage
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6
c. Finished Goods
d. Work in Process
ANS: D
40. The cost of abnormal discrete units must be assigned to good units
a.
b.
c.
d.
yes
no
yes
no
lost units
yes
no
no
yes
ANS: D
41. Which of the following statements is false? The cost of rework on defective units, if
a. abnormal, should be assigned to a loss account.
b. normal and if actual costs are used, should be assigned to material, labor and overhead costs of the good
production.
c. normal and if standard costs are used, should be considered when developing the overhead application rate.
d. abnormal, should be prorated among Work In Process, Finished Goods, and Cost of Goods Sold.
ANS: D
42. If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that
spoilage should be
a. included with the cost of the units sold during the period.
b. included with the cost of the units completed in that department during the period.
c. allocated to ending work in process units and units transferred out based on their relative values.
d. allocated to the good units that have passed the inspection point.
ANS: D
43. Dallas Co. has a production process in which the inspection point is at 65 percent of conversion. The beginning
inventory for July was 35 percent complete and ending inventory was 80 percent complete. Normal spoilage
costs would be assigned to which of the following groups of units, using FIFO costing?
Beginning
Inventory
a.
b.
c.
d.
no
yes
no
yes
Ending
Inventory
yes
yes
no
no
Units Started
& Completed
yes
yes
yes
no
ANS: B
44. Which of the following is not a question that needs to be answered with regard to quality control? a.
What happens to the spoiled units?
b. What is the actual cost of spoilage?
c. How can spoilage be controlled?
d. Why does spoilage happen?
ANS: A
45. Normal spoilage units resulting from a continuous process
a. are extended to the EUP schedule.
b. result in a higher unit cost for the good units produced.
c. result in a loss being incurred.
d. cause estimated overhead to increase.
ANS: B
46. The addition of material in a successor department that causes an increase in volume is called a.
b. reworked units.
c. complex procedure.
accretion.
Chapter 6
7
d. undetected spoilage.
ANS: A
47. Wood Company transferred 5,500 units to Finished Goods Inventory during October. On October 1, the
company had 300 units on hand (40 percent complete as to both material and conversion costs). On October
31, the company had 800 units (10 percent complete as to material and 20 percent complete as to conversion
costs). The number of units started and completed during October was: a. 5,200.
b. 5,380.
c. 5,500.
d. 6,300.
ANS: A
Units Transferred Out
Less: Units in Beginning Inventory
(300)
5,500
Units Started and Completed 5,200
48. Cole Company transferred 6,000 units to Finished Goods Inventory during August. On August 1, the company
had 400 units on hand (35 percent complete as to both material and conversion costs). On August 31, the
company had 750 units (20 percent complete as to material and 30 percent complete as to conversion costs).
The number of units started and completed during August was: a. 5,600
b. 5,860
c. 6,000
d. 6,750
ANS: A
Units Transferred Out
Less: Units in Beginning Inventory
(400)
6,000
Units Started and Completed 5,600
49. Boggs Company started 9,000 units in March. The company transferred out 7,000 finished units and ended the
period with 3,500 units that were 40 percent complete as to both material and conversion costs. Beginning
Work in Process Inventory units were a. 500.
b. 600.
c. 1,500.
d. 2,000.
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
1,500
9,000
(7,000) Ending Work in Process
3,500
50. Williams Company started 8,600 units in April. The company transferred out 6,400 finished units and ended
the period with 3,200 units that were 40 percent complete as to both material and conversion costs. Beginning
Work in Process Inventory units were a. 400.
b. 1,000.
c. 1,280.
d. 2,200.
ANS: B
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
1,000
8,600
(6,400) Ending Work in Process
3,200
51. Lincoln Company had beginning Work in Process Inventory of 5,000 units that were 40 percent complete as to
conversion costs. Lincoln Company started and completed 42,000 units this period and had ending Work in
Process Inventory of 12,000 units. How many units were started this period? a.
42,000
b. 47,000
c. 54,000
d. 59,000
Chapter 6
8
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
5,000
54,000
( 47,000)
12,000
52. Douglas Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to
conversion costs. Douglas Company started and completed 46,000 units this period and had ending Work in
Process Inventory of 11,000 units. How many units were started this period? a.
46,000
b. 52,000
c. 57,000
d. 63,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
6,000
57,000
( 52,000)
11,000
53. Streete Company uses a weighted average process costing system. Material is added at the start of production.
Streete Company started 13,000 units into production and had 4,500 units in process at the start of the period
that were 60 percent complete as to conversion costs. If Streete Company transferred out 11,750 units, how
many units were in ending Work in Process Inventory? a. 1,250
b. 3,000
c. 3,500
d. 5,750
ANS: D
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
4,500
13,000
( 11,750)
5,750
54. Roache Company uses a weighted average process costing system. Material is added at the start of production.
Roache Company started 14,000 units into production and had 5,000 units in process at the start of the period
that were 75 percent complete as to conversion costs. If Roache Company transferred out 12,250 units, how
many units were in ending Work in Process Inventory? a. 1,750
b. 3,000
c. 5,500
d. 6,750
ANS: D
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
5,000
14,000
( 12,250)
6,750
55. Jones Company uses a weighted average process costing system and started 30,000 units this month. Jones had
12,000 units that were 20 percent complete as to conversion costs in beginning Work in Process Inventory and
3,000 units that were 40 percent complete as to conversion costs in ending Work in Process Inventory. What
are equivalent units for conversion costs?
a. 37,800
b. 40,200
c. 40,800
d. 42,000
Chapter 6
9
ANS: B
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
12,000
12,000
27,000
3,000
20%
80%
100%
40%
2,400
9,600
27,000
1,200
40,200
56. Summers Company uses a weighted average process costing system and started 36,000 units this month. Jones
had 15,000 units that were 25 percent complete as to conversion costs in beginning Work in Process Inventory
and 6,000 units that were 35 percent complete as to conversion costs in ending Work in Process Inventory.
What are equivalent units for conversion costs?
a. 43,350
b. 47,100
c. 48,900
d. 51,000
ANS: B
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
15,000
15,000
30,000
6,000
25%
75%
100%
35%
3,750
11,250
30,000
2,100
47,100
57. Weston Company makes small metal containers. The company began April with 250 containers in process that
were 30 percent complete as to material and 40 percent complete as to conversion costs. During the month,
5,000 containers were started. At month end, 1,700 containers were still in process (45 percent complete as to
material and 80 percent complete as to conversion costs). Using the weighted average method, what are the
equivalent units for conversion costs?
a. 3,450
b. 4,560
c. 4,610
d. 4,910
ANS: D
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
250
250
3,300
1,700
40%
60%
100%
80%
Equivalent Units of Production
100
150
3,300
1,360
4,910
58. Meade Company makes small metal containers. The company began October with 300 containers in process
that were 35 percent complete as to material and 45 percent complete as to conversion costs. During the month,
6,000 containers were started. At month end, 1,900 containers were still in process (40 percent complete as to
material and 75 percent complete as to conversion costs). Using the weighted average method, what are the
equivalent units for conversion costs?
a. 4,265
b. 5,590
c. 5,825
d. 6,300
ANS: C
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
300
300
4,100
1,900
45%
55%
100%
75%
135
165
4,100
1,425
5,825
59. Ormandy Company uses a FIFO process costing system. The company had 5,000 units that were 60 percent
complete as to conversion costs at the beginning of the month. The company started 22,000 units this period
Chapter 6
10
and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs.
What are equivalent units for material, if material is added at the beginning of the process? a.
18,000
b. 22,000
c. 25,000
d. 27,000
ANS: B
The material is added at the beginning of the process; therefore there are 22,000 equivalent units of material.
60. Bernstein Company uses a FIFO process costing system. The company had 6,000 units that were 75 percent
complete as to conversion costs at the beginning of the month. The company started 25,000 units this period
and had 8,000 units in ending Work in Process Inventory that were 40 percent complete as to conversion costs.
What are equivalent units for material, if material is added at the beginning of the process?
a. 18,500
b. 25,000
c. 26,500
d. 31,000
ANS: B
The material is added at the beginning of the process; therefore there are 25,000 equivalent units of material.
61. Montgomery Company makes fabric-covered hatboxes. The company began July with 500 boxes in process
that were 100 percent complete as to cardboard, 80 percent complete as to cloth, and 60 percent complete as to
conversion costs. During the month, 3,300 boxes were started. On April 30, 350 boxes were in process (100
percent complete as to cardboard, 70 percent complete as to cloth, and 55 percent complete as to conversion
costs). Using the FIFO method, what are equivalent units for cloth? a.
3,295
b. 3,395
c. 3,450
d. 3,595
ANS: A
Beginning Work in Process (Ignored for FIFO)
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
500
500
2,950
350
0%
20%
100%
70%
100
2,950
245
3,295
62. Hahn Company makes fabric-covered storage totes. The company began July with 600 totes in process that
were 100 percent complete as to cardboard, 75 percent complete as to cloth, and 65 percent complete as to
conversion costs. During the month, 3,600 totes were started. On April 30, 450 totes were in process (100
percent complete as to cardboard, 60 percent complete as to cloth, and 50 percent complete as to conversion
costs). Using the FIFO method, what are equivalent units for cloth? a.
3,570
b. 3,750
c. 3,870
d. 4,020
ANS: A
Beginning Work in Process (Ignored for FIFO)
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
600
600
3,150
450
Brewer Corporation
Brewer Corporation. has the following information for August:
Beginning Work in Process Inventory
0%
25%
100%
60%
150
3,150
270
3,570
Chapter 6
11
6,000
units
24,000 units
(70% complete as to conversion)
Started
Ending Work in Process Inventory
(10% complete as to conversion)
8,500
units
Beginning WIP Inventory Costs:
Material
Conversion
$23,400
50,607
Current Period Costs:
$31,500
Material
76,956
Conversion
All material is added at the start of the process and all finished products are transferred out.
63. Refer to Brewer Corporation. How many units were transferred out in August?
a. 15,500
b. 18,000
c. 21,500
d. 24,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
6,000
24,000
(21,500)
8,500
64. Refer to Brewer Corporation. Assume that weighted average process costing is used. What is the cost per
equivalent unit for material?
a. $0.55
b. $1.05
c. $1.31
d. $1.83
ANS: D
Material Costs:
Beginning
Current Period
$23,400
31,500
54,900 ÷ 30,000 units =
$ 1.83
65. Refer to Brewer Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit
for conversion?
a. $3.44
b. $4.24
c. $5.71
Chapter 6
12
d. $7.03
ANS: B
Conversion Costs:
Beginning (Ignored for FIFO)
Current Period
$
$
Equivalent Units
Beginning Inventory (6,000 * 30%)
Started and Completed (15,500)
Ending Inventory (8,500 * 10%)
76,956
76,956
1,800
15,500
850
18,150 eq units
$ 4.24
Cost per equivalent unit
Collins Corporation
Collins Corporation. has the following information for May:
Beginning Work in Process Inventory
7,500 units
27,000 units
(75% complete as to conversion)
Started
Ending Work in Process Inventory
(15% complete as to conversion)
9,400 units
Beginning WIP Inventory Costs:
Material
Conversion
$25,500
52,725
Current Period Costs:
$34,300
Material
80,845
Conversion
All material is added at the start of the process and all finished products are transferred out.
66. Refer to Collins Corporation. How many units were transferred out in May?
a. 17,600
b. 19,500
c. 25,100
d. 27,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process
7,500
27,000
(25,100)
9,400
67. Refer to Collins Corporation. Assume that weighted average process costing is used. What is the cost per
equivalent unit for material?
a. $0.99
b. $1.18
Chapter 6
13
c. $1.64
d. $1.73
ANS: D
Material Costs:
Beginning
Current Period
$25,500
_34,300
$59,800 ÷ 34,500 units =
$ 1.73
68. Refer to Collins Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit
for conversion?
a. $3.05
b. $3.87
c. $4.25
d. $6.40
ANS: B
Conversion Costs:
Beginning (Ignored for FIFO)
Current Period
$
$
Equivalent Units
Beginning Inventory (7,500 * 25%)
Started and Completed (17,600)
Ending Inventory (9,400 * 15%)
80,845
80,845
1,875
17,600
1,410
20,885 equivalent units
Cost per equivalent unit ($80,845/20885)
$ 3.87
Fantastic Decorations Corporation
The Fantastic Decorations Corporation makes wreaths in two departments: Forming and Decorating. Forming
began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent
complete as to conversion. During the month, 6,500 wreaths were started. At month end, Forming had 2,100
wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to
conversion. Assume Forming uses the weighted average method of process costing. Costs in the Forming
Department are as follows:
Beginning Work in Process Costs:
$1,000
Material
1,500
Conversion
Current Costs:
$3,200
Material
5,045
Conversion
The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent
complete as to material and 90 percent complete as to conversion. The department had 300 units in ending
Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion.
Decorating uses the FIFO method of process costing, and costs associated with Decorating are:
Beginning WIP Inventory:
Transferred In
Material
Conversion
Current Period:
Transferred In
$1,170
4,320
6,210
?
Chapter 6
14
$67,745
Material
95,820
Conversion
69.
Refer to Fantastic Decorations Corporation. How many units were transferred to Decorating during the
month? a. 600
b. 4,900
c. 5,950
d. 7,000
ANS: B
Wreaths completed from BWIP
Wreaths started and completed
70.
Refer to Fantastic Decorations Corporation. What was the cost transferred out of Forming during the
month?
a. $5,341
b. $6,419
c. $8,245
d. $8,330
ANS: D
Units Transferred Out
4,900
71.
500
4,400
4,900
Cost per Eq. Unit
1.70
Total
$8,330
Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute
the number of equivalent units as to costs in Decorating for the transferred-in cost component. a. 7,400
b. 7,700
c. 8,000
d. 8,600
ANS: C
The transferred-in cost component is the 8,000 units that were transferred in.
72.
Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute
the number of equivalent units in Decorating for material.
a. 7,970
b. 8,000
c. 8,330
d. 8,450
ANS: A
Materials: Decorating: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
73.
Units
600
7,700
300
% Complete
20%
100%
50%
Eqiv. Units
120
7,700
150
7,970
Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute
the number of equivalent units in Decorating for conversion. a. 7,925
b. 7,985
c. 8,360
d. 8,465
ANS: B
Chapter 6
Conversion: Decorating: FIFO
15
Units
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production
74.
% Complete
Equiv.
Units
600
10%
60
7,700
100%
7,700
300
75%
225
7,985
Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a
total cost of $16,000. What is the material cost per equivalent unit in Decorating? a.
$8.50
b. $8.65
c. $8.80
d. $9.04
ANS: A
When FIFO is used, consider only current costs.
Current Costs
$67,745
75.
Equiv
Units
7,970
Cost/
Equiv Unit
$8.50
Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a
total cost of $16,000. What is the conversion cost per equivalent unit in Decorating? a. $11.32
b. $11.46
c. $12.00
d. $12.78
ANS: C
When FIFO is used, consider only current costs.
Current Costs
$95,820
76.
Equiv
Units
7,985
Cost/
Equiv Unit
$12.00
Refer to Fantastic Decorations Corporation. Assume the material cost per EUP is $8.00 and the conversion
cost per EUP is $15 in Decorating. What is the cost of completing the units in beginning inventory?
a. $ 960
b. $ 1,380
c. $ 1,860
d. $11,940
ANS: C
Costs to
Complete Beg Inv
Materials
Conversion
Total Costs to Complete
Units
600
600
Percent to
Complete
Cost per
Unit
20%
$8
10%
$15
Total
$960
$900
$1,860
Four Seasons Company
Four Seasons Company adds material at the start to its production process and has the following information
available for August:
Beginning Work in Process Inventory
(40% complete as to conversion)
7,000 units
Chapter 6
16
Started this period
32,000 units
Ending Work in Process Inventory
(25% complete as to conversion)
2,500 units
?
Transferred out
77. Refer to Four Seasons Company. Compute the number of units started and completed in August. a. 29,500
b. 34,500
c. 36,500
d. 39,000
ANS: A
Units started this period
32,000 Less: Ending Work in Process
Units started and completed this period
2,500
29,500
78. Refer to Four Seasons Company. Calculate equivalent units of production for material using FIFO. a.
32,000
b. 36,800
c. 37,125
d. 39,000
ANS: A
Materials are added at the beginning of the process. 32,000 units were started in the current period; therefore there are
32,000 equivalent units for materials.
79. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using FIFO. a.
30,125
b. 34,325
c. 37,125
d. 39,000
ANS: B
Equivalent Units for Conversion
Beginning Inventory (7,000 * 60%)
4,200
Started and Completed (29,500)
Ending Inventory (2,500 * 25%)
29,500
625
34,325 eq. units
80. Refer to Four Seasons Company. Calculate equivalent units of production for material using weighted
average.
a. 32,000
b. 34,325
c. 37,125
d. 39,000
ANS: D
Equivalent Units--Materials
Beginning Inventory (7,000 units)
Started this Period (32,000)
7,000
32,000
39,000 eq. units
81. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using weighted
average. a.
34,325
b. 37,125
c. 38,375
d. 39,925
ANS: B
Equivalent Units--Conversion
Chapter 6
Beginning Inventory (7,000 * 100%)
17
7,000
Started and Completed (29,500)
Ending Inventory (2,500 * 25%)
29,500
625
37,125 eq. units
Simpson Company
Simpson Company adds material at the start of production. The following production information is available
for September:
Beginning Work in Process Inventory
(45% complete as to conversion)
Started this period
Ending Work in Process Inventory
(80% complete as to conversion)
10,000 units
120,000 units
8,200 units
Beginning Work in Process Inventory Costs:
Material
$24,500
Conversion
68,905
Current Period Costs:
Material
Conversion
82.
$ 75,600
130,053
Refer to Simpson Company. How many units must be accounted for?
a. 118,200
b. 128,200
c. 130,000
d. 138,200
ANS: C
Beginning Work in Process
Units Started
Total Units
10,000
120,000
130,000
83. Refer to Simpson Company. What is the total cost to account for?
a. $ 93,405
b. $205,653
c. $274,558
d. $299,058
ANS: D
BWIP: Materials
BWIP: Conversion
Current Period: Materials
Current Period: Conversion
Total Costs
$ 24,500
68,905
75,600
130,053
$299,058
84. Refer to Simpson Company. How many units were started and completed in the period? a.
111,800
b. 120,000
c. 121,800
d. 130,000
ANS: A
Units started this period
120,000
Chapter 6
Less: Ending Work in Process
Units started and completed this period
18
8,200
111,800
85. Refer to Simpson Company. What are the equivalent units for material using the weighted average
method?
a. 120,000
b. 123,860
c. 128,360
d. 130,000
ANS: D
Equivalent Units
Beginning Inventory (10,000 * 100%)
10,000
Started and Completed (111,800)
Ending Inventory (8,200 * 25%)
111,800
8,200
130,000 eq. units
86. Refer to Simpson Company. What are the equivalent units for material using the FIFO method? a.
111,800
b. 120,000
c. 125,500
d. 130,000
ANS: B
Equivalent Units
Beginning Inventory (Ignored for FIFO)
Started and Completed (111,800)
Ending Inventory (8,200 * 25%)
0
111,800
8,200
120,000 eq. units
87. Refer to Simpson Company. What are the equivalent units for conversion using the weighted average
method?
a. 120,000
b. 123,440
c. 128,360
d. 130,000
ANS: C
Beginning Work in Process
+ Completion of Units in Process
Completed
111,800
+ Ending Work in Process
Equivalent Units of Production
10,000
10,000
55%
100%
111,800
8,200
45%
4,500
5,500 + Units Started and
80%
6,560
128,360
88. Refer to Simpson Company. What are the equivalent units for conversion using the FIFO method? a.
118,360
a. 122,860
b. 123,860
c. 128,360
ANS: C
Beginning Work in Process (ignored)
+ Completion of Units in Process
111,800 100%
111,800
+ Ending Work in Process
Equivalent Units of Production
10,000
10,000
55%
8,200
0%
5,500 + Units Started and Completed
80%
6,560
123,860
89. Refer to Simpson Company. What is the material cost per equivalent unit using the weighted average
method? a.
$.58
a. $.62
Chapter 6
19
c. $.77
d. $.82
ANS: C
Material Costs:
Beginning
Current Period
$ 24,500
75,600
100,100 ÷ 130,000 units=
$ 0.77 per unit
90. Refer to Simpson Company. What is the conversion cost per equivalent unit using the weighted average
method? a.
$1.01
a. $1.05
b. $1.55
c. $1.61
ANS: C
Conversion Costs:
Beginning
Current Period
$ 68,905
130,053
198,958 ÷ 128,360 units=
$ 1.55 per unit
91. Refer to Simpson Company. What is the cost of units completed using the weighted average method?
a.
$237,510
b. $266,742
c. $278,400
d. $282,576
ANS: D
Units Completed
121,800
Costs per Equivalent Unit
(1.55 + .77) = $2.32
Total
$282,576
PTS: 1
DIF: Difficult
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
92. Refer to Simpson Company. What is the conversion cost per equivalent unit using the FIFO method? a.
$1.05
a. $.95
b. $1.61
d. $1.55
ANS: A
Conversion Costs:
Beginning (Ignored)
Current Period
$130,053
$130,053 ÷ 123,860 units= $1.05 per unit
93. Refer to Simpson Company. What is the cost of all units transferred out using the FIFO method? a. $204,624
a. $191,289
b. $287,004
c. $298,029
ANS: C
Beginning Inventory 10,000 units:
Raw Materials (prior period)
Direct Labor (prior period
FOH (10,000 * .55 * $1.05)
Units Started and Completed
111,800 units * $ (.63+1.05):
$24,500
68,905
5,775
$99,180
$187,824
Chapter 6
Total
20
$287,004
Mercury Corporation
Beginning inventory (30% complete as to Material B and
60% complete for conversion)
Started this cycle
Ending inventory (50% complete as to Material B and
80% complete for conversion) Beginning inventory
costs:
700
units
2,000
500
units
units
Material A
$14,270
Material B
5,950
Conversion
5,640
Current Period costs:
Material A
$40,000
Material B
70,000
Conversion
98,100
Material A is added at the start of production, while Material B is added uniformly throughout the process.
94.
Refer to Mercury Corporation. Assuming a weighted average method of process costing, compute EUP units
for Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,240 and 2,700, respectively
ANS: B
Weighted Average
Beginning Work in Process
Units Started and Completed
Ending Work in Process
EUP Materials
95.
Material A
700
1,500
500
2,700
Material B
700
1,500
250
2,450
Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP units for
Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,450 and 2,880, respectively
ANS: C
FIFO
Beginning Work in Process
Units Started and Completed
Ending Work in Process
EUP Materials
96.
Material A
0
1,500
500
Material B
490
1,500
250
2,000
2,240
Refer to Mercury Corporation Assuming a weighted average method of process costing, compute EUP for
conversion.
a. 2,600
b. 2,180
c. 2,000
Chapter 6
21
d. 2,700
ANS: A
Weighted Average
Beginning Work in Process
Units Started and Completed
Ending Work in Process
97.
700
1,500
400
2,600
Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP for conversion. a.
2,240
b. 2,180
c. 2,280
d. 2,700
ANS: B
FIFO
Beginning Work in Process (700 * 40%)
Units Started and Completed
Ending Work in Process (500 * 80%)
98.
280
1,500
400
2,180
Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the
average cost per unit for Material A.
a. $20.10
b. $20.00
c. $31.25
d. $31.00
ANS: A
Weighted Average: Material A
Beginning
Current Period
99.
$
14,270
40,000
54,270 ÷ 2,700 units=
$ 20.10 per unit
Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per
EUP for Material A. a. $31.25
b. $20.10
c. $20.00
d. $31.00
ANS: C
Material A Costs
(Current Period)
$40,000
Equivalent Units
2,000
Average Cost per EUP
$20.00
100. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per
EUP for Material B. a. $20.10
b. $31.25
c. $20.00
d. $31.00
ANS: B
Material B Costs
(Current Period)
$70,000
Equivalent Units
2,240
Average Cost per EUP
$31.25
Chapter 6
22
101. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the
average cost per EUP for Material B. a. $20.00
b. $31.25
c. $20.10
d. $31.00
ANS: D
Material B Costs
(Beginning Inventory and Current Period)
$75,950
Equivalent Units
2,450
Average Cost per EUP
$31.00
102. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per
EUP for conversion. a. $45.50
b. $45.00
c. $43.03
d. $47.59
ANS: B
Conversion Costs
(Current Period)
$98,100
Equivalent Units
Average Cost per EUP
2,180
$45.00
103. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the
average cost per EUP for conversion. a. $39.90
b. $45.00
c. $43.03
d. $47.59
ANS: A
Conversion Costs
(Beginning WIP and Current Period)
$(98,100 + $5,640)=$103,640
Equivalent Units
2,600
Average Cost per EUP
$39.90
Guthrie Corporation
The following information is available for Guthrie Corporation for the current year:
Beginning Work in Process
Costs of Beginning Work in Process:
(75% complete)
Started
Ending Work in Process
14,500 units
75,000 units
(60% complete)
Abnormal spoilage
Normal spoilage
(continuous)
Transferred out
16,000 units
2,500 units
5,000 units
Material
Conversion
Current Costs:
Material
Conversion
$25,100
50,000
$120,000
300,000
66,000 units
All materials are added at the start of production.
104. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for material? a.
a. 89,500
b. 84,500
c. 70,000
ANS: C
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
Units
14,500
51,500
% Complete
100%
100%
Eq. Units
14,500
51,500
82,000
Chapter 6
+ Ending Work in Process
+ Abnormal Spoilage
23
16,000
2,500
100%
100%
16,000
2,500
Equivalent Units of Production
84,500
105. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for conversion costs? a.
80,600
a. 78,100
b. 83,100
d. 75,600
ANS: B
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Units
14,500
51,500
16,000
2,500
Equivalent Units of Production
% Complete
100%
100%
60%
100%
Eq Units
14,500
51,500
9,600
2,500
78,100
106. Refer to Guthrie Corporation. What is the cost per equivalent unit for material using weighted average?
a. $1.72
b. $1.62
c. $1.77
d. $2.07
ANS: A
Weighted Average: Materials
Beginning
Current Period
$
25,100
120,000
145,100 ÷ 84,500 units= $1.72 per unit
107. Refer to Guthrie Corporation. What is the cost per equivalent unit for conversion costs using weighted
average?
a. $4.62
b. $4.21
c. $4.48
d. $4.34
ANS: C
Weighted Average: Conversion
Beginning
Current Period
$
$
50,000
300,000
350,000 ÷ 78,100 units = $ 4.48 per unit
Refer to Guthrie Corporation. What is the cost assigned to normal spoilage using weighted average? a.
a. $15,500
b. $30,850
c. None of the responses are correct
$31,000
ANS: D
No costs are assigned to normal, continuous spoilage. Higher costs are assigned to good units produced.
108. Refer to Guthrie Corporation. Assume that the cost per EUP for material and conversion are $1.75 and $4.55,
respectively. What is the cost assigned to ending Work in Process? a.
$100,800
a. $87,430
b. $103,180
Chapter 6
24
d. $71,680
ANS: D
Equivalent
Units
16,000
9,600
Cost per
Equivalent Unit
$1.75
$4.55
Total
$28,000
$43,680
$71,680
109. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for material?
a. 75,000
b. 72,500
c. 84,500
d. 70,000
ANS: D
Materials: FIFO
Beginning Work in Process 51,500 100%
51,500
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production
0%
- + Units Started and Completed
16,000
2,500
100%
100%
16,000
2,500
70,000
110. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for conversion costs? a.
a. 67,225
b. 69,725
c. 78,100
ANS: B
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production
14,500
51,500
16,000
2,500
25%
100%
60%
100%
3,625
51,500
9,600
2,500
67,225
111. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for material? a.
a. $1.66
b. $1.71
c. $1.60
ANS: C
FIFO: Materials
Current Period
$
72,225
$1.42
120,000
120,000 ÷ 70,000 units = $1.71 per unit
112. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for conversion costs?
a. $4.46
b. $4.15
c. $4.30
d. $3.84
ANS: A
FIFO: Conversion
Current Period
$
300,000
300,000 ÷ 67,225 units =
$ 4.46 per unit
113. Refer to Guthrie Corporation. Assume that the FIFO EUP cost for material and conversion are $1.50 and
$4.75, respectively. Using FIFO what is the total cost assigned to the units transferred out? a.
$414,194
a. $339,094
Chapter 6
25
b. $445,444
c. $396,975
ANS: A
Transferred Out Units: FIFO
Equiv
Units
Beginning Work in Process
+ Completion of Beginning Inventory
+Units Started and Completed
(14,500 * 25%)
Cost per
Equiv Unit
3,625
51,500
4.75
6.25
Equivalent Units of Production
Total
75,100
17,219
321,875
414,194
Crafton Corporation
Crafton Corporation has the following information for the current month:
100,000 units
Units started
20,000 units
Beginning Work in Process: (35% complete)
3,500 units
Normal spoilage (discrete)
5,000 units
Abnormal spoilage
14,500 units
Ending Work in Process: (70% complete)
97,000 units
Transferred out
Beginning Work in Process Costs:
$15,000
Material
10,000
Conversion
All materials are added at the start of the production process. Crafton Corporation inspects goods at 75 percent
completion as to conversion.
115. Refer to Crafton Corporation. What are equivalent units of production for material, assuming FIFO? a.
100,000
b. 96,500
c. 95,000
d. 120,000
ANS: A
Materials: FIFO
Beginning Work in Process
Completed
77,000
3,500
100%
3,500
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
100%
0%
5,000
14,500
- + Units Started and
77,000 + Normal Spoilage--Discrete
100%
100%
5,000
14,500
100,000
116. Refer to Crafton Corporation. What are equivalent units of production for conversion costs, assuming FIFO?
a. 108,900
b. 103,900
c. 108,650
d. 106,525
ANS: D
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
20,000
77,000
3,500
5,000
14,500
65%
100%
75%
75%
70%
13,000
77,000
2,625
3,750
10,150
106,525
117. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50,
respectively. What is the amount of the period cost for July using FIFO?
Chapter 6
a.
b.
c.
d.
26
$0
$9,375
$10,625
$12,500
ANS: C
Abnormal spoilage is a period cost.
Materials
Conversion Costs
Total Abnormal Spoilage
5,000 * $1.00/unit
3,750 * $1.50/unit
$5,000
5,625
$10,625
118. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50,
respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest
dollar)?
a. $245,750
b. $244,438
c. $237,000
d. $224,938
ANS: B
Transferred Out Units: FIFO
Beginning Work in Process
+ Completion of Beginning Inventory
+ Units Started and Completed
+Normal Spoilage--Discrete-Materials
+Normal Spoilage--Discrete-Conversion
Equivalent Units of Production
(20,000 * 65%)
13,000
77,000
3,500
2,625
1.50
2.50
1.00
1.50
$ 25,000
19,500
192,500
3,500
3,938
$244,438
119. Refer to Crafton Corporation. What are equivalent units of production for material assuming weighted average
is used? a.
107,000
b. 116,500
c. 120,000
d. 115,000
ANS: C
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
20,000
77,000
3,500
5,000
14,500
100%
100%
100%
100%
100%
20,000
77,000
3,500
5,000
14,500
120,000
120. Refer to Crafton Corporation. What are equivalent units of production for conversion costs assuming weighted
average is used? a.
113,525
b. 114,400
c. 114,775
d. 115,650
ANS: A
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
20,000
77,000
3,500
5,000
14,500
100%
100%
75%
75%
70%
20,000
77,000
2,625
3,750
10,150
113,525
121. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50,
respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned?
Value
Assigned To
Chapter 6
a.
b.
c.
d.
$7,438
$7,438
$8,750
$8,750
27
Units transferred out and Ending Inventory
Units transferred out
Units transferred out and Ending Inventory
Units transferred out
ANS: B
Equivalent Units
3,500
2,625
Cost per
Equivalent Unit
$1.00
$1.50
Total
$3,500
3,938
$7,438
This amount is transferred out.
122. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50,
respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory?
a. $29,725.00
b. $37,162.50
c. $38,475.00
d. $36,250.00
ANS: A
Ending Inventory: Weighted Average
Materials
14,500
Conversion (14,500 * 70%)
10,150
Total
$1.00
1.50
$
14,500.00
15,225.00
$ 29,725.00
Knight Corporation
Knight Corporation has the following information for the current month:
95,000 units
Units started
15,000 units
Beginning Work in Process: (30% complete)
3,000 units
Normal spoilage (discrete)
4,000 units
Abnormal spoilage
15,000 units
Ending Work in Process: (75% complete)
88,000 units
Transferred out
Beginning Work in Process Costs:
$18,000
Material
14,000
Conversion
All materials are added at the start of the production process. Knight Corporation inspects goods at 75 percent
completion as to conversion.
123. Refer to Knight Corporation. What are equivalent units of production for material, assuming FIFO? a.
91,000
b. 92,000
c. 95,000
d. 110,000
ANS: C
Materials: FIFO
Beginning Work in Process
Completed
73,000
3,000
100%
3,000
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
100%
0%
4,000
15,000
- + Units Started and
73,000 + Normal Spoilage--Discrete
100%
100%
4,000
15,000
95,000
124. Refer to Knight Corporation. What are equivalent units of production for conversion costs, assuming FIFO?
Chapter 6
a.
b.
c.
d.
28
97,750
100,000
101,750
104,500
ANS: B
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
15,000
73,000
3,000
4,000
15,000
70%
100%
75%
75%
75%
10,500
73,000
2,250
3,000
11,250
Equivalent Units of Production
100,000
125. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25,
respectively. What is the amount of the period cost for July using FIFO?
a. $0
b. $12,750
c. $14,750
d. $17,000
ANS: C
Abnormal spoilage is a period cost.
Materials
Conversion Costs
Total Abnormal Spoilage
4,000 * $2.00/unit
3,000 * $2.25/unit
$ 8,000
6,750
$14,750
126. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25,
respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest
dollar)?
a. $344,938
b. $365,875
c. $376,938
d. $378,625
ANS: C
Transferred Out Units: FIFO
Beginning Work in Process
+ Completion of Beginning Inventory
+ Units Started and Completed
+Normal Spoilage--Discrete-Materials
+Normal Spoilage--Discrete-Conversion
Total Costs Assigned to Transferred Units
(15,000 * 70%)
(3,000 * 75%)
10,500
73,000
3,000
2,250
$2.25
4.25
2.00
2.25
$ 32,000
23,625
310,250
6,000
5,063
$376,938
127. Refer to Knight Corporation. What are equivalent units of production for material assuming weighted average
is used? a.
105,500
b. 106,000
c. 107,000
d. 110,000
ANS: D
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
3,000 100%
3,000
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
73,000 100%
15,000
100%
15,000
73,000 + Normal Spoilage--Discrete
4,000
15,000
100%
100%
4,000
15,000
110,000
128. Refer to Knight Corporation. What are equivalent units of production for conversion costs assuming weighted
average is used? a.
103,750
Chapter 6
29
b. 104,500
c. 104,750
d. 105,500
ANS: B
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production
15,000
73,000
3,000
4,000
15,000
100%
100%
75%
75%
75%
15,000
73,000
2,250
3,000
11,250
104,500
129. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25,
respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned?
Value
a. $11,063
b. $11,063
c. $12,750
d. $12,750
ANS: B
Equivalent
Units
3,000
2,250
Assigned To
Units transferred out and Ending Inventory
Units transferred out
Units transferred out and Ending Inventory
Units transferred out
Cost per
Equivalent Unit
$2.00
$2.25
Total
$6,000
5,063
$11,063
This amount is transferred out.
130. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25,
respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory?
a. $55,312.50
b. $63,750.00
c. $66,375.00
d. $72,312.50
ANS: A
Ending Inventory: Weighted Average
Materials
15,000
Conversion (15,000 * 75%)
11,250
Total
$2.00
2.25
$
30,000.00
25,312.50
$ 55,312.50
Chapman Corporation
The following information is available for Chapman Corporation for the current month:
Started
this
month
80,000 units
Beginning WIP
(40% complete)
7,500 units
Normal spoilage (discrete)
1,100 units
Abnormal
spoilage
900 units
Ending WIP
(70% complete)
13,000 units
Transferred out
72,500 units
Beginning Work in Process Costs:
Material
$10,400
Chapter 6
30
13,800
Conversion
Current Costs:
$120,000
Material
350,000
Conversion
All materials are added at the start of production and the inspection point is at the end of the process.
131. Refer to Chapman Corporation. What are equivalent units of production for material using FIFO? a.
80,000
b. 79,100
c. 78,900
d. 87,500
ANS: A
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production
0%
100%
100%
100%
100%
65,000
13,000
1,100
900
65,000
13,000
1,100
900
80,000
132. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using FIFO?
a. 79,700
b. 79,500
c. 81,100
d. 80,600
ANS: D
Conversion: FIFO
% Complete
Units
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
7,500
65,000
13,000
1,100
900
EUP
60%
100%
70%
100%
100%
Equivalent Units of Production
4,500
65,000
9,100
1,100
900
80,600
133. Refer to Chapman Corporation. What are equivalent units of production for material using weighted
average?
a. 86,600
b. 87,500
c. 86,400
d. 85,500
ANS: B
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Units
7,500
65,000
13,000
1,100
900
% Complete
EUP
100%
100%
100%
100%
100%
7,500
65,000
13,000
1,100
900
Equivalent Units of Production
87,500
134. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using weighted
average? a.
83,600
b. 82,700
c. 82,500
d. 81,600
ANS: A
Conversion: FIFO
Units
% Complete
EUP
Chapter 6
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production
31
7,500
65,000
13,000
1,100
900
100%
100%
70%
100%
100%
7,500
65,000
9,100
1,100
900
83,600
135. Refer to Chapman Corporation. What is cost per equivalent unit for material using FIFO? a.
b. $1.37
c. $1.50
d. $1.56
$1.63
ANS: C
FIFO: Materials
Current Period
$ 120,000
$ 120,000 ÷ 80,000
units=
$
1.50 per unit
136. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using FIFO?
a. $4.00
b. $4.19
c. $4.34
d. $4.38
ANS: C
FIFO: Conversion
Current Period
$ 350,000
$ 350,000 ÷ 80,600 units = $ 4.34 per unit
137. Refer to Chapman Corporation. What is cost per equivalent unit for material using weighted average?
a. $1.49
b. $1.63
c. $1.56
d. $1.44
ANS: A
Weighted Average:
Materials
Beginning
Current Period
$ 10,400
120,000
130,400 ÷ 87,500 units =
$
1.49 /unit
138. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using weighted
average?
a. $4.19
b. $4.41
c. $4.55
d. $4.35
ANS: D
Weighted Average:
Conversion
Beginning
Current Period
$ 13,800
350,000
363,800 ÷ 83,600 units = $4.35 per unit
139. Refer to Chapman Corporation. What is the cost assigned to ending inventory using FIFO?
a. $75,920
Chapter 6
32
b. $58,994
c. $56,420
d. $53,144
ANS: B
Ending Inventory: FIFO
Materials
Conversion (13,000 * 70%)
Total
13,000
9,100
$ 1.50
4.34
$
19,500
39,494
$ 58,994
140. Refer to Chapman Corporation. What is the cost assigned to abnormal spoilage using FIFO? a.
b. $3,906
c. $5,256
d. $6,424
ANS: C
Abnormal
Spoiled Units
900
Price per Equivalent Unit
$5.84 $5,256
$1,350
Total
141. Refer to Chapman Corporation. What is the cost assigned to normal spoilage and how is it classified using
weighted average?
a. $6,193 allocated between WIP and Transferred Out
b. $6,424 allocated between WIP and Transferred Out
c. $6,193 assigned to loss account
d. $6,424 assigned to units Transferred Out
ANS: D
Normal
Spoiled Units
1,100
Price per Equivalent Unit
Total
$5.84 $6,424 Transferred Out
142. Refer to Chapman Corporation. What is the total cost assigned to goods transferred out using weighted
average?
a. $435,080
b. $429,824
c. $428,656
d. $423,400
ANS: B
Goods Transferred Out/ Price per Eq Unit
73,600
$5.84
Total
$429,824