Mas Process Costing

ACCOUNTANCY REVIEW
General Trias, Cavite Campus
PROCESS COSTING
1. A process cost accounting system is most appropriate when

a. a variety of different products are produced, each one requiring different
types of materials, labor, and overhead.
b. the focus of attention is on a particular job or order.
c. similar products are mass-produced.
d. individual products are custom made to the specification of customers.
Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
AICPA PC: None, IMA: Business Applications
2. A characteristic of products that are mass-produced in a continuous fashion is

that
a. the products are identical or very similar in nature.
b. they are grouped in batches.
c. they are produced at the time an order is received.
d. their costs are accumulated on job cost sheets.
Ans: A, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
AICPA PC: None, IMA: Cost Management
3. A process cost system would be used for all of the following products except
a. chemicals.
b. computer chips.
c. motion pictures.
d. soft drinks.
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
4. In a process cost system,

a. a Work in Process account is maintained for each product.
b. a materials requisition must identify the job on which the materials will be
used.
c. a Work in Process account is maintained for each process.
d. one Work in Process account is maintained for all the processes, similar
to a job order cost system.
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
AICPA PC: None, IMA: Reporting
5. Differences between a job order cost system and a process cost system include
all of the following except the
a. documents used to track costs.
b. point at which costs are totaled.
c. unit cost computations.
d. flow of costs.
Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
6. Which of these best reflects a distinguishing factor between a job order cost
system and a process cost system?
a. The detail at which costs are calculated.
b. The time period each covers.
c. The number of work in process accounts.
d. The manufacturing cost elements included.
Ans: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
7. Which of the following is correct regarding cost systems?

Job Order Process
a. Work in process account several one for each process
b. Work in process account one one
c. Work in process account one one for each process
d. Work in process account several one
8. In a process cost system, unit costs are determined using a

a. numerator of costs of each job.
b. denominator of units produced during the period.
c. denominator of units produced for the job.
d. denominator of units produced for the day.
Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
AICPA PC: None, IMA: Business Economics
9. In process cost accounting, manufacturing costs are summarized on a

a. job order cost sheet.
b. process order cost sheet.
c. production cost report.
d. manufacturing cost sheet.
10. Which of the following manufacturing cost elements occurs in a process cost
system?
a. Direct materials.
b. Direct labor.
c. Manufacturing overhead.
d. All of these.
Ans: D, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
AICPA PC: None, IMA: Business Economics
11. In a process cost system, product costs are summarized:

a. on job cost sheets.
b. on production cost reports.
c. after each unit is produced.
d. when the products are sold.
Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
12. When manufacturing overhead costs are assigned to production in a process

cost system, they are debited to
a. the Finished Goods Inventory account.
b. Cost of Goods Sold.
c. a Manufacturing Overhead account.
d. a Work in Process account.
AICPA PC: None, IMA: FSA
13. A product requires processing in two departments, the Baking Department and
then the Packaging Department, before it is completed. Costs transferred out of
the Baking Department will be transferred to:
a. Finished Goods Inventory.
b. Cost of Goods Sold.
c. Work in Process—Packaging Department.
d. Manufacturing Overhead.
14. Which of the following would not appear as a debit in the Work in Process
account of a second department in a two stage production process?
a. Materials used.
b. Overhead applied.
c. Labor assigned.
d. Cost of products transferred out.
15. Materials requisitions are:

a. not used in process costing.
b. generally used more frequently in process costing than job order costing.
c. generally used less frequently in process costing than job order costing.
d. used more frequently by latter stage production departments.
16. A primary driver of overhead costs in continuous manufacturing operations is:

a. direct labor dollars.
b. direct labor hours.
c. machine hours.
d. machine maintenance dollars.
17. Price Company assigns overhead based on machine hours. The Milling
Department logs 1,800 machine hours and Cutting Department shows 3,000
machine hours for the period. If the overhead rate is $5 per machine hour, the
entry to assign overhead will show a
a. debit to Manufacturing Overhead for $24,000.
b. credit to Work in Process—Cutting Department for $15,000.
c. debit to Work in Process for $15,000.
d. credit to Manufacturing Overhead for $24,000.
Ans: D, LO: 4, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
Measurement, AICPA PC: Problem Solving, IMA: FSA
18. Barnes and Miller Manufacturing is trying to determine the equivalent units for
conversion costs with 10,000 units of ending work in process at 80% completion
and 28,000 physical units. There are no beginning units in the department.
Conversion costs occur evenly throughout the entire production period. What are
the equivalent units for conversion costs for the current period?
a. 38,000.
b. 36,000.
c. 8,000.
d. 26,000.
Ans: D, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
19. 15,000 units in a process that are 70% complete are referred to as:
a. 15,000 equivalent units of production.
b. 4,500 equivalent units of production.
c. 10,500 equivalent units of production.
d. 4,500 equivalent units of production.
Ans: C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
AICPA PC: Problem Solving, IMA: Reporting
20. A department adds raw materials to a process at the beginning of the process
and incurs conversion costs uniformly throughout the process. For the month of
January, there were no units in the beginning work in process inventory; 80,000
units were started into production in January; and there were 20,000 units that
were 40% complete in the ending work in process inventory at the end of
January. What were the equivalent units of production for materials for the month
of January?
a. 88,000 equivalent units.
b. 72,000 equivalent units.
c. 60,000 equivalent units.
d. 80,000 equivalent units.
Ans: D, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
21. Equivalent units are calculated by

a. multiplying the percentage of work done by the equivalent units of output.
b. dividing physical units by the percentage of work done.
c. multiplying the percentage of work done by the physical units.
d. dividing equivalent units by the percentage of work done.
22. Minor Company had the following department data:

Physical Units
Work in process, July 1 30,000
Completed and transferred out 135,000
Work in process, July 31 45,000
Materials are added at the beginning of the process. What is the total number
of equivalent units for materials in July?
a. 135,000.
b. 150,000.
c. 210,000.
d. 180,000.
Ans: D, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
23. Corsi Company had the following department data:

Physical Units
Work in process, beginning -0-
Work in process, ending 7,000
of equivalent units for materials during the period?
a. 70,000.
b. 7,000.
c. 77,000.
d. 63,000.
Ans: C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
24. Gantner Company had the following department information about physical units
and percentage of completion:
Physical Units
Work in process, May 1 (60%) 60,000
Work in process, May 31 (40%) 50,000
If materials are added at the beginning of the production process, what is the
total number of equivalent units for materials during May?
a. 210,000.
b. 200,000.
c. 194,000.
d. 170,000.
Ans: B, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
25. In the month of June, a department had 20,000 units in beginning work in
process that were 70% complete. During June, 80,000 units were transferred
into production from another department. At the end of June there were 10,000
units in ending work in process that were 40% complete. Materials are added at
the beginning of the process, while conversion costs are incurred uniformly
throughout the process. The equivalent units of production for conversion costs
for June were
Ans: B, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
Measurement, AICPA PC: Problem Solving, IMA: Cost Management
26. A process with 1,600 units of beginning work in process, completed and
transferred out 20,000 units during a period. There were 10,000 units in the
ending work in process that were 50% complete as to conversion costs.
Materials are added 80% at the beginning of the process and 20% when the
units are 90% complete. How much is equivalent units of production for the
period for material costs?
27. Hanker Company had the following department data on physical units:
Work in process, beginning 3,000
of equivalent units for materials during the period?
a. 12,600.
b. 2,400.
c. 14,400.
d. 9,000.
Ans: C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
28. Super-Tech Industries had the following department information about physical
units and percentage of completion:
Physical Units
Work in process, June 1 (75%) 8,000
Work in process, June 30 (50%) 12,000
If materials are added at the beginning of the production process, what is the
total number of equivalent units for materials during June?
a. 15,000.
b. 30,000.
c. 32,000.
d. 24,000.
29. Cohen Company is trying to determine the equivalent units for conversion costs
with 5,000 units of ending work in process at 80% completion and 35,000 units
that are 100% complete as to materials. There are no beginning units in the
department. Materials are added at the beginning of the process, and conversion
costs occur evenly throughout the entire production period. What is the
equivalent units of production for conversion costs for the current period?
a. 40,000.
b. 39,000.
c. 4,000.
d. 34,000.
30. If beginning work in process is 4,000 units, ending work in process is 2,000 units,
and the units accounted for equals 12,000 units, what must units started into
production be?
a. 16,000.
b. 14,000.
c. 8,000.
d. 10,000.
31. The Molding Department of Kennett Company has the following production data:
beginning work in process 25,000 units (60% complete), started into production
425,000 units, completed and transferred out 400,000 units, and ending work in
process 50,000 units (40% complete). Assuming materials are entered at the
beginning of the process, equivalent units for materials are:
a. 450,000.
b. 375,000.
c. 400,000.
d. 475,000.
Ans: A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
32. The Molding Department of Kennett Company has the following production data:
beginning work in process 25,000 units (60% complete), started into production
process 50,000 units (40% complete). Assuming conversion costs are incurred
uniformly during the process, the equivalent units for conversion costs are:
a. 450,000.
b. 405,000.
c. 420,000.
d. 400,000.
33. The Molding Department of Boswell Company has the following production data:
beginning work process 40,000 units (60% complete), started into production
process 80,000 units (40% complete). Assuming conversion costs are incurred
uniformly during the process, the equivalent units for conversion costs are:
a. 720,000.
b. 760,000.
c. 672,000.
d. 600,000.
34. In the Shaping Department of Rollins Company the unit materials cost is $5.00
and the unit conversions cost is $3.00. The department transferred out 20,000
units and had 2,500 units in ending work in process 20% complete. If all
materials are added at the beginning of the process, the total cost to be assigned
to the ending work in process is
a. 4,000.
b. 12,500.
c. 14,000.
d. 20,000.
35. In Kapler Company, the Cutting Department had beginning work in process of
8,000 units, transferred out 20,000 units, and had an ending work in process of
4,000 units. How many units were started by Kapler during the month?
a. 12,000.
b. 16,000.
c. 20,000.
d. 24,000.
36. Cinder Company had the following department information for the month:
Total materials costs $ 80,000
Equivalent units of materials 10,000
Total conversion costs $120,000
Equivalent units of conversion costs 20,000
How much is the total manufacturing cost per unit?
a. $14.00.
b. $6.66.
c. $6.00.
d. $8.00.
37. Charley Company’s Assembly Department has materials cost at $3 per unit and
conversion cost at $6 per unit. There are 20,000 units in ending work in process,
all of which are 70% complete as to conversion costs and 100% complete as to
materials. How much are total costs to be assigned to inventory?
a. $84,000.
b. $144,000.
c. $126,000.
d. $180,000.
38. Long Company has recently tried to improve its analysis for its manufacturing
process. Units started into production equaled 6,000 and ending work in process
equaled 400 units. Long had no beginning work in process inventory. Conversion
costs are applied equally throughout production, and materials are applied at the
beginning of the process. How much is the materials cost per unit if ending work
in process was 25% complete and total materials costs equaled $24,000?
a. $4.00.
b. $4.21.
c. $15.00.
d. $3.75.
39. Madison Industries has equivalent units of 4,000 for materials and for conversion
costs. Total manufacturing costs are $160,000. Total materials costs are
$120,000. How much is the conversion cost per unit?
a. $4.00.
b. $10.00.
c. $40.00.
d. $8.00.
40. If equivalent units are 12,000 for conversion costs and units transferred out
equals 8,000, what stage of completion should the ending work in process be for
the 16,000 units remaining?
a. 75%.
b. 25%.
c. 10%.
d. 20%.
41. In the month of April, a department had 500 units in the beginning work in
process inventory that were 60% complete. These units had $40,000 of
materials costs and $30,000 of conversion costs. Materials are added at the
beginning of the process and conversion costs are added uniformly throughout
the process. During April, 10,000 units were completed and transferred to the
finished goods inventory and there were 2,000 units that were 25% complete in
the ending work in process inventory on April 30. During April, manufacturing
costs charged to the department were: Materials $920,000; Conversion costs
$1,020,000.
The cost assigned to the units transferred to finished goods during April was
a. $1,800,000.
b. $1,810,000.
c. $1,880,000.
d. $1,790,000.
42. Zibba Company enters materials at the beginning of the process. In January,
there was no beginning work in process, but there were 200 units in the ending
work in process inventory. The number of units completed equals the number of
a. units started.
b. units started less 200.
c. units started plus 200.
d. equivalent units.
43. Honrad Company's Assembly Department has materials cost at $4 per unit and
conversion cost at $8 per unit. There are 20,000 units in ending work in process,
all of which are 70% complete as to conversion costs. How much are total costs
to be assigned to inventory?
a. $112,000.
b. $192,000.
c. $168,800.
d. $240,000.
44. The total units accounted for equals units in

a. beginning work in process – units transferred out.
b. beginning work in process + ending work in process.
c. ending work in process + units transferred out.
d. ending work in process – units started into production.
Ans: C, LO: 6, Bloom: AP, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
45. Department 1 of a two department production process shows:

Units
Beginning Work in Process 10,000
Ending Work in Process 50,000
Total units to be accounted for 160,000
How many units were transferred out to Department 2?

a. 50,000.
b. 110,000.
c. 160,000.
d. 150,000.
46. The last department in a production process shows the following information at
the end of the period:
Units
Beginning Work in Process 25,000
Started into Production 200,000
Ending Work in Process 50,000
How many units have been transferred out to finished goods during the
period?
a. 200,000.
b. 225,000.
c. 250,000.
d. 175,000.
47. If 120,000 units are started into production there was no beginning work in
process, and 40,000 units are in process at the end of the period, how many
units were completed and transferred out?
a. 120,000.
b. 40,000.
c. 80,000.
d. 160,000.
48. Total units to be accounted for less units in beginning work in process equals
a. total units accounted for.
b. units transferred out.
c. units started into production.
d. equivalent units.
49. A department adds materials at the beginning of the process and incurs
conversion costs uniformly throughout the process. For the month of July, there
was no beginning work in process; 40,000 units were completed and transferred
out; and there were 20,000 units in the ending work in process that were 40%
complete. During July, $96,000 materials costs and $84,000 conversion costs
were charged to the department.
The unit production costs for materials and conversion costs for July was
Materials Conversion Costs
a. $1.60 $1.40
b. $1.60 $1.75
c. $2.00 $1.40
d. $2.40 $2.13
50. The following department data are available:

Total materials costs $240,000
Equivalent units of materials 60,000
Total conversion costs $135,000
Equivalent units of conversion costs 30,000
What is the total manufacturing cost per unit?
a. $4.00.
b. $4.50.
c. $8.50.
d. $6.25.
51. Physical units accounted for are 160,000. Total conversion costs are $276,500.
There are 4,000 units in ending inventory which are 50% complete as to
conversion costs. How much is the conversion cost per unit?
a. $1.75.
b. $1.73.
c. $1.71.
d. $1.69.
52. Materials costs of $800,000 and conversion costs of $1,020,000 were charged to
a processing department in the month of September. Materials are added at the
beginning of the process, while conversion costs are incurred uniformly
throughout the process. There were no units in beginning work in process,
20,000 units were started into production in September, and there were 5,000
units in ending work in process that were 40% complete at the end of
September.
What was the total amount of manufacturing costs assigned to those units
that were completed and transferred out of the process in September?
a. $1,500,000.
b. $2,000,000.
c. $1,606,500.
d. $1,365,000.
53. Mayer Company has recently tried to improve its analysis for its manufacturing
process. Units started into production equaled 18,000 and ending work in
process equaled 1,200 units. Mayer had no beginning work in process inventory.
Conversion costs are applied equally throughout production, and materials are
applied at the beginning of the process. How much is the materials cost per unit
if ending work in process was 25% complete and total materials costs equaled
$90,000?
a. $5.00.
b. $5.27.
c. $20.00.
d. $4.69.
54. A production cost report

a. is prepared for each product.
b. is prepared from a job cost sheet.
c. will show quantity and cost data for a production department.
d. will not identify a specific department if more than one department is
involved in the production process.
55. In the production cost report, the total

a. physical units accounted for equals the costs accounted for.
b. physical units accounted for equals the units to be accounted for.
c. costs charged equals the units to be accounted for.
d. costs accounted for equals the costs of the units started into production.
Ans: B, LO: 7, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting,
56. The Wrapping Department’s output during the period consists of 17,000 units
completed and transferred out, and 900 units in ending work in process that
were 75% complete as to materials and conversion costs. Beginning inventory
was 1,200 units that were 30% complete as to materials and conversion costs.
Under the FIFO method, what are the equivalent units of production for
materials?
a. 18,035
b. 18,515
c. 17,675
d. 17,315
57. Chicotti Company has 6,000 units in beginning work in process, 30% complete as to
conversion costs, 60,000 units transferred out to finished goods, and 2,000 units in
ending work in process 20% complete as to conversion costs. The beginning and
ending inventory is fully complete as to materials costs. How much are equivalent
units for materials if the FIFO method is used?
a. 60,400
b. 62,000
c. 56,000
d. 68,000
58. Solis Company uses the FIFO method to compute equivalent units. It has 4,000
units in beginning work in process, 20% complete as to conversion costs and
50% complete as to materials costs, 55,000 units started, and 6,000 units in
ending work in process, 30% complete as to conversion costs, and 80%
complete as to materials cost. How much are the equivalent units for materials
under the FIFO method?
a. 55,800
b. 55,000
c. 57,800
d. 59,000
59. Hanker Company had the following department data on physical units:
Work in process, beginning 2,500
of equivalent units for materials if the FIFO method is used?
a. 14,500
b. 13,500
c. 16,000
d. 11,500
60. Which of the following is considered a difference between a job order cost and a
process cost system?
a. The manufacturing cost elements.
b. Documents used to track costs.
c. The accumulation of the costs of materials, labor, and overhead.
d. The flow of costs.
61. Equivalent units of production are a measure of

a. units completed and transferred out.
b. units transferred out.
c. units in ending work in process.
d. the work done in a period expressed in fully completed units.
Ans: D, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement,
62. In computing equivalent units, ___________ is not part of the equivalent units of
production formula.
a. units transferred out
b. beginning work in process
c. ending work in process
d. None of these is correct.
63. The total units to be accounted for is computed by adding

a. beginning units in process to units transferred out.
b. ending units in process to units started into production.
c. beginning units in process to units started into production.
d. ending units in process to total units accounted for.
64. For the Assembly Department, unit materials cost is $8 and unit conversion cost
is $12. If there are 10,000 units in ending work in process 75% complete as to
conversion costs, the costs to be assigned to the inventory are
a. $200,000.
b. $170,000.
c. $150,000.
d. $180,000.
65. The total costs accounted for in a production cost report equal the
a. cost of units completed and transferred out only.
b. cost of units started into production.
c. cost of units completed and transferred out plus the cost of ending work in
process.
d. cost of beginning work in process plus the cost of units completed and
transferred out.
STRAIGHT PROBLEMS
1. Massey Corporation uses a process cost system and the weighted-average cost
flow assumption. Production begins in the Fabricating Department where
materials are added at the beginning of the process and conversion costs are
incurred uniformly throughout the process. On March 1, the beginning work in
process inventory consisted of 20,000 units which were 60% complete and had a
cost of $175,000, $145,000 of which were materials costs. During March, the
following occurred:
Materials added $305,000

Conversion costs incurred $120,000
Units completed and transferred out in March 65,000
Units in ending work in process March 31 (40% complete) 25,000
Instructions
Answer the following questions and show the computations that support your
answers.
1. What are the equivalent units of production for materials and conversion costs in
the Fabricating Department for the month of March?
2. What are the costs assigned to the ending work in process inventory on March
31?
3. What are the costs assigned to units completed and transferred out during
March?
Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
Solution (15–20 min.)

1. Equivalent units of production:
Equivalent Units
Physical Units Materials Conversion
Costs
Transferred out 65,000 65,000 65,000
Work in process, March 31 25,000 25,000 10,000*
Total 90,000 90,000 75,000
*(25,000 × .40)
2. Materials unit cost $5 ($450,000* ÷ 90,000 units)

Conversion unit cost 2 ($150,000** ÷ 75,000 units)
Total unit cost $7
*($145,000 + $305,000) **[($175,000 – $145,000) + $120,000]
Costs assigned to work in process, March 31
Materials costs $125,000 (25,000 units × $5)
Conversion costs 20,000 (10,000 units × $2)
Total $145,000
3. Costs assigned to units completed and transferred out: 65,000 × $7 = $455,000
2. Taco Ranch uses a process cost system and the FIFO cost flow assumption.
Production begins in the Crafting Department where materials are added at the
beginning of the process and conversion costs are incurred uniformly throughout
the process. On November 1, the beginning work in process inventory consisted
of 10,000 units, which were 60% complete and had a cost of $266,000,
$140,000 of which were materials costs. During November, the following
occurred:
Materials added $315,000
Conversion costs incurred $66,000
Units completed and transferred out in November 45,000
Units in ending work in process November 30 (20% complete) 25,000
Instructions
Answer the following questions and show the computations that support your
answers:
(a) What are the equivalent units of production for materials and conversion costs in
the Crafting Department for the month of November?
(b) What are the costs assigned to the ending work in process inventory on
November 30?
(c) What are the costs assigned to units completed and transferred out during
November?
Ans: N/A, LO: 8, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
Measuement, AICPA PC: Problem Solving, IMA: Cost management
a
Solution (10–12 min.)
(a) Equivalent units of production:
Equivalent Units
Physical Units Materials Conversion Costs
Work in process, November 1 10,000 0 4,000
(10,000 × .40)
Started and completed 35,000 35,000 35,000
Work in process, November 30 25,000 25,000 5,000
(25,000 × .20)
Total 70,000 60,000 44,000
(b) Materials unit cost $5.25 ($315,000 ÷ 60,000 units)

Conversion unit cost 1.50 ($66,000 ÷ 44,000 units)
Total unit cost $6.75
Costs to be accounted for

Work in process, November 1 $266,000
Started in production 381,000
Total costs $647,000
Costs assigned to work in process, November 30

Materials costs $131,250 (25,000 units × $5.25)
Conversion costs 7,500 (5,000 units × $1.50)
Total $138,750
(c) Costs assigned to units completed and transferred out:

Transferred out
Work in Process, November 1 $266,000
Cost to complete beginning work in process 6,000 (4,000 ×
$1.50)
Total costs $272,000
Units started and completed 236,250 (35,000 ×
$6.75)
Total costs transferred out $508,250
3. The ledger of Kinsler Company has the following work in process account.
Work in Process—Painting
5/1 Balance 5,390 5/31 Transferred out ?

5/31 Materials 7,740
5/31 Labor 4,110
5/31 Overhead 2,470
5/31 Balance ?
Production records show that there were 700 units in the beginning inventory, 30%
complete, 2,900 units started, and 3,100 units transferred. The beginning work in
process had materials cost of $3,060 and conversion costs of $2,330. The units in
ending inventory were 40% complete. Materials are entered at the beginning of the
painting process.
Instructions
(a) How many units are in process at May 31?
(b) What is the unit materials cost for May?
(c) What is the unit conversion cost for May?
(d) What is the total cost of units transferred out in May?
(e) What is the cost of the May 31 inventory?
Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Hard, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN:
Solution (10 min.)
(a) Work in process, May 1 700
Started into production 2,900
Total units to be accounted for 3,600
Less: Transferred out 3,100
Work in process, May 31 500
(b) Equivalent Units
Materials
Conversion Costs
Units transferred out 3,100 3,100
Work in process, May 31
500  100% 500
500  40%
200
3,600 3,300
Direct
Materials
Conversion Costs
Work in process, May 1 $3,060 $2,330
Costs added 7,740 6,580
Total materials cost 10,800 8,910
$10,800 ÷ 3,600 = $3.00
(c) $8,910 ÷ 3,300 = 2.70
(d) Transferred out (3,100  5.70) $17,670
(e) Work in process
Materials (500  $3.00) $1,500

Conversion costs (200  $2.70) 540
$2,040

Mas Process Costing

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Mas Process Costing

Hochgeladen von

Copyright:

Verfügbare Formate

ACCOUNTANCY REVIEW

General Trias, Cavite Campus

1. A process cost accounting system is most appropriate when

2. A characteristic of products that are mass-produced in a continuous fashion is

4. In a process cost system,

7. Which of the following is correct regarding cost systems?

8. In a process cost system, unit costs are determined using a

9. In process cost accounting, manufacturing costs are summarized on a

11. In a process cost system, product costs are summarized:

12. When manufacturing overhead costs are assigned to production in a process

15. Materials requisitions are:

16. A primary driver of overhead costs in continuous manufacturing operations is:

21. Equivalent units are calculated by

22. Minor Company had the following department data:

23. Corsi Company had the following department data:

44. The total units accounted for equals units in

45. Department 1 of a two department production process shows:

How many units were transferred out to Department 2?

50. The following department data are available:

54. A production cost report

55. In the production cost report, the total

61. Equivalent units of production are a measure of

63. The total units to be accounted for is computed by adding

Materials added $305,000

Solution (15–20 min.)

2. Materials unit cost $5 ($450,000* ÷ 90,000 units)

3. Costs assigned to units completed and transferred out: 65,000 × $7 = $455,000

(b) Materials unit cost $5.25 ($315,000 ÷ 60,000 units)

Costs to be accounted for

Costs assigned to work in process, November 30

(c) Costs assigned to units completed and transferred out:

5/1 Balance 5,390 5/31 Transferred out ?

Started into production 2,900

Total units to be accounted for 3,600

Less: Transferred out 3,100

Work in process, May 31 500

(b) Equivalent Units

Units transferred out 3,100 3,100

Work in process, May 31

500  100% 500

Work in process, May 1 $3,060 $2,330

Costs added 7,740 6,580

Total materials cost 10,800 8,910

$10,800 ÷ 3,600 = $3.00

(c) $8,910 ÷ 3,300 = 2.70

(d) Transferred out (3,100  5.70) $17,670

(e) Work in process

Materials (500  $3.00) $1,500

Das könnte Ihnen auch gefallen