Normal spoilage adds to the cost of the job to which it is attributed in a job order costing system

ACCOUNTING

True or False

Normal spoilage adds to the cost of the job to which it is attributed in a job order costing system

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The value of scrap material can have either a high or low sales value relative to the product with which it is associated

ACCOUNTING

True or False

The value of scrap material can have either a high or low sales value relative to the product with which it is associated

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Reworked goods are unacceptable units of production usually not capable of being repaired or converted into a salable product

ACCOUNTING

True or False

Reworked goods are unacceptable units of production usually not capable of being repaired or converted into a salable product

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Reducing defects helps to reduce costs, but does not make the business more competitive

ACCOUNTING

True or False

Reducing defects helps to reduce costs, but does not make the business more competitive

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Managers find operation costing useful in cost management because

ACCOUNTING

Multiple Choice

Managers find operation costing useful in cost management because

a. operations costing often results in profit maximization.

b. operations costing results in cost minimization.

c. operations costing capture the financial impact of the control of physical processes.

d. of all of the above.

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An operation costing system would be applicable to

ACCOUNTING

Multiple Choice

An operation costing system would be applicable to

a. batches of similar products where each batch is a variation of a single design.

b. the construction of a bridge.

c. a suit making operation.

d. both (a) and (c).

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1. Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process

ACCOUNTING

Multiple Choice

Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for June 20x3:



Work in process, beginning inventory 50,000 units

Transferred-in costs (100% complete)

Direct materials (0% complete)

Conversion costs (90% complete)



Transferred in during current period 150,000 units

Completed and transferred out 175,000 units



Work in process, ending inventory

Transferred-in costs (100% complete)

Direct materials (0% complete)

Conversion costs (65% complete)



Calculate equivalent units for conversion costs using the FIFO method.

a. 401,500 units

b. 350,000 units

c. 300,000 units

d. 292,500 units

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Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process

ACCOUNTING

Multiple Choice

Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were presented for June 20x3:



Work in process, beginning inventory 50,000 units

Transferred-in costs (100% complete)

Direct materials (0% complete)

Conversion costs (90% complete)



Transferred in during current period 150,000 units

Completed and transferred out 175,000 units



Work in process, ending inventory

Transferred-in costs (100% complete)

Direct materials (0% complete)

Conversion costs (65% complete)



How many units must be accounted for during the period?

a. 225,000 units

b. 200,000 units

c. 179, 500 units

d. 150,000 units

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Transferred-in costs are treated as if they are

ACCOUNTING

Multiple Choice

Transferred-in costs are treated as if they are

a. conversion costs added at the beginning of the process.

b. costs of beginning inventory added at the beginning of the process.

c. direct labor costs added at the beginning of the process.

d. a separate direct material added at the beginning of the process.

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In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under

ACCOUNTING

Multiple Choice

In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under

a. standard costing.

b. FIFO costing.

c. weighted-average costing.

d. operations costing.

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Which of the following journal entries properly records direct materials requisitions for the work-in-process inventory and direct materials variances

ACCOUNTING

Multiple Choice

Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for May 20x3 are:

Work in process, beginning inventory: 70 units

Direct materials (100% complete)

Conversion costs (25% complete)



Units started during May 40 units



Work in process, ending inventory: 10 units

Direct materials (100% complete)

Conversion costs (50% complete)



Costs for May:

Standard costs for Assembly:

Direct materials $4,000 per unit

Conversion costs $16,000 per unit



Work in process, beginning inventory:

Direct materials $140,000

Conversion costs $260,000



Which of the following journal entries properly records direct materials requisitions for the work-in-process inventory and direct materials variances, assuming that the Assembly Department used 10% less materials than expected?

a. Work in Process – Assembly $160,000

Assembly Department Materials Cost Control $160,000

b. Work in Process – Assembly $160,000

Direct Materials Variance $ 16,000

Assembly Department Materials Cost Control $144,000

c. Work in Process – Assembly $144,000

Assembly Department Materials Cost Control $144,000

d. Work in Process – Assembly $144,000

Direct Materials Variances $ 16,000

Assembly Department Materials Cost Control $160,000

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Which of the following journal entries properly records the assignment of conversion costs to work-in-process inventory and the conversion-cost

ACCOUNTING

Multiple Choice

Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for May 20x3 are:

Work in process, beginning inventory: 70 units

Direct materials (100% complete)

Conversion costs (25% complete)



Units started during May 40 units



Work in process, ending inventory: 10 units

Direct materials (100% complete)

Conversion costs (50% complete)



Costs for May:

Standard costs for Assembly:

Direct materials $4,000 per unit

Conversion costs $16,000 per unit



Work in process, beginning inventory:

Direct materials $140,000

Conversion costs $260,000



Which of the following journal entries properly records the assignment of conversion costs to work-in-process inventory and the conversion-cost variances of the Assembly Department, assuming that conversion costs are 20% higher than expected?

a. Work in Process - Assembly $1,680,000

Conversion-Cost Variances $ 280,000

Assembly Department Conversion Cost Control $1,400,000

b. Work in Process - Assembly $1,680,000

Direct Materials Variances $ 280,000

Testing Department Conversion Cost Control $1,400,000

c. Work in Process - Assembly $1,400,000

Conversion-Cost Variances $ 280,000

Assembly Department Conversion Cost Control $1,680,000

d. Work in Process - Testing $1,400,000

Assembly Department Conversion Cost Control $1,400,000

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Which of the following journal entries records the Assembly Department's conversion costs for the month, assuming conversion costs are 20% higher than

ACCOUNTING

Multiple Choice

Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for May 20x3 are:

Work in process, beginning inventory: 70 units

Direct materials (100% complete)

Conversion costs (25% complete)



Units started during May 40 units



Work in process, ending inventory: 10 units

Direct materials (100% complete)

Conversion costs (50% complete)



Costs for May:

Standard costs for Assembly:

Direct materials $4,000 per unit

Conversion costs $16,000 per unit



Work in process, beginning inventory:

Direct materials $140,000

Conversion costs $260,000



Which of the following journal entries records the Assembly Department's conversion costs for the month, assuming conversion costs are 20% higher than expected?

a. Assembly Department Conversion Cost Control $1,680,000

Various accounts $1,680,000

b. Materials Inventory $1,680,000

Assembly Department Conversion Cost Control $1,680,000

c. Assembly Department Conversion Cost Control $1,400,000

Materials Inventory $1,400,000

d. Materials Inventory $1,680,000

Work in Process - Assembly $1,680,000

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What is the balance in ending work-in-process inventory

ACCOUNTING

Multiple Choice

Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for May 20x3 are:

Work in process, beginning inventory: 70 units

Direct materials (100% complete)

Conversion costs (25% complete)



Units started during May 40 units



Work in process, ending inventory: 10 units

Direct materials (100% complete)

Conversion costs (50% complete)



Costs for May:

Standard costs for Assembly:

Direct materials $4,000 per unit

Conversion costs $16,000 per unit



Work in process, beginning inventory:

Direct materials $140,000

Conversion costs $260,000



What is the balance in ending work-in-process inventory?

a. $82,000

b. $120,000

c. $155,000

d. $170,000

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Standard costing is popular among companies that

ACCOUNTING

Multiple Choice

Standard costing is popular among companies that

a. produce masses of similar or identical products.

b. manufacture textiles or ceramics.

c. produce a product that uses few direct materials items, and has relatively few operational activities.

d. are all of the above.

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Activity-based costing has less applicability in a process-costing environment because

ACCOUNTING

Multiple Choice

Activity-based costing has less applicability in a process-costing environment because

a. the use of activity-based costing makes the computational process more difficult.

b. the products tend to be similar and thus use the resources in a similar manner.

c. cost control in process costing is achieved by controlling the cost of the various processes rather than the individual activities.

d. of both (b) and (c).

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A disadvantage of the weighted-average method compared to the FIFO process-costing method is that

ACCOUNTING

Multiple Choice

A disadvantage of the weighted-average method compared to the FIFO process-costing method is that

a. FIFO is computationally simpler.

b. FIFO provides better management information for planning and control purposes.

c. when unit cost per input prices fluctuate markedly from month to month, its per unit cost is less representative than FIFO.

d. the information it provides about changes in unit prices from one period to the next is less useful than the information provided by FIFO.

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A major advantage of using the FIFO process-costing method is

ACCOUNTING

Multiple Choice

A major advantage of using the FIFO process-costing method is

a. FIFO makes the unit cost calculations simpler.

b. in contrast with the weighted-average method FIFO is considered GAAP.

c. FIFO provides managers with information about changes in the costs per unit from one period to the next.

d. all of the above are advantages of using FIFO.

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Operating income can differ materially between the results for the weighted-average and FIFO methods when

ACCOUNTING

Multiple Choice

Operating income can differ materially between the results for the weighted-average and FIFO methods when

a. direct materials or conversion costs per unit vary significantly from period to period.

b. the physical inventory levels of work in process are large in relation to the total number of units transferred out.

c. neither (a) nor (b) are correct.

d. both (a) and (b) are correct.

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A reason(s) why "pure" FIFO is rarely encountered in process costing is that

ACCOUNTING

Multiple Choice

A reason(s) why "pure" FIFO is rarely encountered in process costing is that

a. FIFO is usually applied within a department to compile the cost of units transferred out.

b. the units transferred into the department during a given time period are usually carried at a single average unit cost.

c. tracking costs on a “pure" FIFO basis is very difficult.

d. all of the above are reasons.

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What is the cost of the goods transferred out during February

ACCOUNTING

Multiple Choice

The Rest-a-Lot chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Rest-a-Lot. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.

Beginning inventory:

Direct materials $24,000

Conversion costs $35,000



Manufacturing costs added during the accounting period:

Direct materials $168,000

Conversion costs $278,000



What is the cost of the goods transferred out during February?

a. $417,750

b. $456,015

c. $476,750

d. $505,000

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What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of February

ACCOUNTING

Multiple Choice

The Rest-a-Lot chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Rest-a-Lot. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.

Beginning inventory:

Direct materials $24,000

Conversion costs $35,000



Manufacturing costs added during the accounting period:

Direct materials $168,000

Conversion costs $278,000



What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of February?

a. $19,200

b. $22,400

c. $25,600

d. $22,500

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What were the equivalent units for conversion costs during February

ACCOUNTING

Multiple Choice

The Rest-a-Lot chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Rest-a-Lot. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.

Beginning inventory:

Direct materials $24,000

Conversion costs $35,000



Manufacturing costs added during the accounting period:

Direct materials $168,000

Conversion costs $278,000



What were the equivalent units for conversion costs during February?

a. 83,500

b. 85,000

c. 75,000

d. 79,500

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How many of the units that were started during February were completed during February

ACCOUNTING

Multiple Choice

The Rest-a-Lot chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 80,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Rest-a-Lot. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.



Beginning inventory:

Direct materials $24,000

Conversion costs $35,000



Manufacturing costs added during the accounting period:

Direct materials $168,000

Conversion costs $278,000



How many of the units that were started during February were completed during February?

a. 85,000

b. 80,000

c. 75,000

d. 65,000

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An assumption of the FIFO process-costing method is that

ACCOUNTING

Multiple Choice

An assumption of the FIFO process-costing method is that

a. the units in beginning inventory are not necessarily assumed to be completed by the end of the period.

b. the units in beginning inventory are assumed to be completed first.

c. ending inventory will always be completed in the next accounting period.

d. no calculation of conversion costs is possible.

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On occasion, the FIFO and the weighted-average methods of process costing will result in the same dollar amount of costs being transferred to the next

ACCOUNTING

Multiple Choice

On occasion, the FIFO and the weighted-average methods of process costing will result in the same dollar amount of costs being transferred to the next department. Which of the following scenarios would have that result?

a. When the beginning and ending inventories are equal in terms of unit numbers.

b. When the beginning and ending inventories are equal in terms of the percentage of completion for both direct materials, and conversion costs.

c. When there is no ending inventory.

d. When there is no beginning inventory.

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A distinct feature of the FIFO process-costing method is that

ACCOUNTING

Multiple Choice

A distinct feature of the FIFO process-costing method is that

a. the work done on beginning inventory before the current period is blended in with the work done during the current period in the calculation of equivalent units.

b. the work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units.

c. the work done on ending inventory is kept separate from the work done during the current period in the calculation of equivalent units and is usually not included in the calculation.

d. the FIFO process-costing method is only minimally different from the weighted-average process-costing method.

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Of the 75,000 units Rest-a-Lot started during February, how many were finished during the month

ACCOUNTING

Multiple Choice

The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot.


Of the 75,000 units Rest-a-Lot started during February, how many were finished during the month?

a. 75,000

b. 85,000

c. 65,000

d. 95,000

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What were the equivalent units for conversion costs for February if beginning inventory was 70% complete as to conversion costs and ending inventory

ACCOUNTING

Multiple Choice

The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot.


What were the equivalent units for conversion costs for February if beginning inventory was 70% complete as to conversion costs and ending inventory was 40% complete as to conversion costs?

a. 89,000

b. 75,000

c. 85,000

d. 95,000

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What were the equivalent units for materials for February

ACCOUNTING

Multiple Choice

The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot.


What were the equivalent units for materials for February?

a. 95,000 chairs

b. 85,000 chairs

c. 80,000 chairs

d. 75,000 chairs

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How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the production cycle

ACCOUNTING

Multiple Choice

The Rest-a-Lot Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 85,000 chairs and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Rest-a-Lot.


How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the production cycle.

a. 10,000 chairs

b. 20,000 chairs

c. 15,000 chairs

d. 25,000 chairs

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What amount of conversion costs are assigned to ending Work-in-Process account for June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What amount of conversion costs are assigned to ending Work-in-Process account for June?

a. $101,956.64

b. $141,111.00

c. $126,450.50

d. $188,148.00

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What amount of direct materials costs is assigned to the ending Work-in-Process account for June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What amount of direct materials costs is assigned to the ending Work-in-Process account for June?

a. $168,571.50

b. $283,552.50

c. $259,530

d. $236,850

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What is the conversion cost per equivalent unit in June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What is the conversion cost per equivalent unit in June?

a. $1,254.32

b. $1,579.14

c. $1,730.20

d. $1,890.35

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What is the direct materials cost per equivalent unit during June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What is the direct materials cost per equivalent unit during June?

a. $1,123.81

b. $1,730.20

c. $1,579,00

d. $1,890.35

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What is the total amount debited to the Work-in-Process account during the month of June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What is the total amount debited to the Work-in-Process account during the month of June?

a. $450,000

b. $2,000,000

c. $2,270,000

d. $2,450,000

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What are the equivalent units for direct materials and conversion costs, respectively, for June

ACCOUNTING

Multiple Choice

The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing.


Data for the Assembly Department for June 20x3 are:

Work in process, beginning inventory 250 units

Direct materials (100% complete)

Conversion costs (50% complete)


Units started during June 800 units

Work in process, ending inventory: 150 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs for June 20x3:

Work in process, beginning inventory:

Direct materials $180,000

Conversion costs $270,000

Direct materials costs added during June $1,000,000

Conversion costs added during June $1,000,000


What are the equivalent units for direct materials and conversion costs, respectively, for June?

a. 1,200.5 units; 1,160.64 units

b. 1,050 units; 1,012.5 units

c. 1,050 units; 1,050 units

d. 962 units; 990 units

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Under the weighted-average method, the stage of completion of beginning work in process

ACCOUNTING

Multiple Choice

Under the weighted-average method, the stage of completion of beginning work in process

a. is relevant in determining the equivalent units.

b. must be combined with the work done during the current period in determining the equivalent units.

c. is irrelevant in determining the equivalent-unit calculation.

d. can almost always be determined with a high degree of precision.

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If there was no beginning work in process and no ending work in process under the weighted-average process costing method, the number of equivalent

ACCOUNTING

Multiple Choice

If there was no beginning work in process and no ending work in process under the weighted-average process costing method, the number of equivalent units for direct materials, if direct materials were added at the start of the process, would be

a. equal to the units started or transferred in.

b. equal to the units completed.

c. less than the units completed.

d. both (a) and (b).

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In the computation of the cost per equivalent unit, the weighted-average method of process costing considers

ACCOUNTING

Multiple Choice

In the computation of the cost per equivalent unit, the weighted-average method of process costing considers

a. all the costs entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period.

b. all the costs that have entered work in process from the units started or transferred in during the current accounting period.

c. all the costs that have entered work in process during the current accounting period from the units started or transferred in minus the costs associated with ending inventory.

d. all the costs that have entered work in process during the current accounting period from the units started or transferred in plus the costs associated with ending inventory.

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The weighted-average process-costing method calculates the equivalent units by

ACCOUNTING

Multiple Choice

The weighted-average process-costing method calculates the equivalent units by

a. considering only the work done during the current period.

b. the units started during the current period minus the units in ending inventory.

c. the units started during the current period plus the units in ending inventory.

d. the equivalent units completed during the current period plus the equivalent units in ending inventory

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What were the equivalent units of direct materials and conversion costs, respectively, at the end of February

ACCOUNTING

Multiple Choice

Injection Molding, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.


Data for Department A for February 20x3 are:

Work in process, beginning inventory, 40% converted 200 units

Units started during February 600 units

Work in process, ending inventory 100 units



Costs for Department A for February 20x3 are:

Work in process, beginning inventory:

Direct materials $100,000

Conversion costs $100,000

Direct materials costs added during February $1,000,000

Conversion costs added during February $1,250,000



What were the equivalent units of direct materials and conversion costs, respectively, at the end of February? Assume Injection Molding, Inc., uses the weighted-average process costing method.

a. 800, 730

b. 800, 800

c. 800, 700

d. 600, 500

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How many units were completed and transferred out of Department A during February

ACCOUNTING

Multiple Choice

Injection Molding, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.


Data for Department A for February 20x3 are:

Work in process, beginning inventory, 40% converted 200 units

Units started during February 600 units

Work in process, ending inventory 100 units



Costs for Department A for February 20x3 are:

Work in process, beginning inventory:

Direct materials $100,000

Conversion costs $100,000

Direct materials costs added during February $1,000,000

Conversion costs added during February $1,250,000



How many units were completed and transferred out of Department A during February?

a. 100 units

b. 600 units

c. 700 units

d. 800 units

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What is the unit cost per equivalent unit in Department A

ACCOUNTING

Multiple Choice

Injection Molding, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.


Data for Department A for February 20x3 are:

Work in process, beginning inventory, 40% converted 200 units

Units started during February 600 units

Work in process, ending inventory 100 units



Costs for Department A for February 20x3 are:

Work in process, beginning inventory:

Direct materials $100,000

Conversion costs $100,000

Direct materials costs added during February $1,000,000

Conversion costs added during February $1,250,000



What is the unit cost per equivalent unit in Department A?

a. $1,000

b. $1,750

c. $3,500

d. $3,750

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When a bakery transfers goods from the Baking Department to the Decorating Department, the accounting entry is

ACCOUNTING

Multiple Choice

When a bakery transfers goods from the Baking Department to the Decorating Department, the accounting entry is

a. Work in Process - Baking Department

Work in Process - Decorating Department

b. Work in Process - Decorating Department

Accounts Payable

c. Work in Process - Decorating Department

Work in Process - Baking Department

d. Work in Process - Baking Department

Accounts Payable

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In a process-costing system, the calculation of equivalent units is used for

ACCOUNTING

Multiple Choice

In a process-costing system, the calculation of equivalent units is used for

a. calculating the dollar amount of ending inventory.

b. calculating the dollar amount of the cost of goods sold for the accounting period.

c. calculating the dollar cost of a particular job.

d. both (a) and (b).

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The purpose of the equivalent-unit computation is

ACCOUNTING

Multiple Choice

The purpose of the equivalent-unit computation is

a. to convert completed units into the amount of partially completed output units that could be made with that quantity of input.

b. to assist the business in determining ending inventory.

c. to convert partially completed units into the amount of completed output units that could be made with that quantity of input.

d. both (b) and (c).

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Which of the following statement (s) concerning conversion costs is correct

ACCOUNTING

Multiple Choice

Which of the following statement (s) concerning conversion costs is correct?

a. Estimating the degree of completion of direct materials in a partially completed unit is usually easier to calculate than estimating the degree of completion for conversion costs.

b. The calculation of equivalent units is relatively easy for the textile industry.

c. Estimates are usually not considered acceptable.

d. Both (b) and (c) are correct.

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An example of a business which would have no beginning or ending inventory but could use process costing to compute unit costs would be

ACCOUNTING

Multiple Choice

An example of a business which would have no beginning or ending inventory but could use process costing to compute unit costs would be

a. a clothing manufacturer

b. a corporation whose sole business activity is processing the customer deposits of several banks

c. a manufacturer of custom houses

d. a manufacturer of large TVs

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Conversion costs

ACCOUNTING

Multiple Choice

Conversion costs

a. include all the factors of production
b. include direct materials
c. in process costing are usually considered to be added evenly throughout the production process
d. include both (b) and (c)

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