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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