Reference no: EM131124162

Topic: Cost per Equivalent Unit
29. The cost per equivalent unit for materials using the weighted average method is calculated as:
A) Total materials costs in process during the period divided by equivalent units in process for materials
B) Materials costs added during the period divided by equivalent units in process for materials
C) Total materials costs to account for divided by the number of equivalent units completed for materials
D) Materials costs added during the period divided by the number of equivalent units completed for materials

Topic: Calculation of Equivalent Units
30. The following information pertains to the Avery Company:

Units
Work-in-process, May 1 (35 percent complete) 8,000
Started in May 40,000
Work-in-process, May 31 12,000

Materials are added at the beginning of the process. If equivalent units in process for conversion using the weighted average method were 37,800, ending work-in-process at May 31:

A) Was 15.0 percent complete
B) Was 30.0 percent complete
C) Was 25.0 percent complete
D) Was 97.5 percent complete

Topic: Cost per Equivalent Unit Calculation

11. The following information is available for Crawford, Inc. for the month of January:

Units Cost
Work-in-process, January 1 (70% complete) 5,000
Direct materials $ 24,000
Direct labor 12,000
Manufacturing overhead 16,000

Work-in-process, January 1 $ 52,000

Started in production during January 20,000
Cost Added:
Direct materials $ 72,000
Direct labor 32,000
Manufacturing overhead 40,400

Total costs added during January $144,400

Work-in-process, January 31 (80% complete) 2,000

Materials are added at the beginning of the process. Round unit costs to 2 decimal places.

Calculate the cost per equivalent unit in process for conversion using the weighted average method.
Topic: Costing for Services
31. Which of the following statements is not true regarding costing for services?
A) Generally, the use of process costing techniques for service organizations is easier than it is for manufacturing organizations because services generally cannot be inventoried.
B) Process costing for services is similar to job costing for batches in that an average cost for similar or identical services performed during a given time period.
C) The difficulty in many service situations is defining the appropriate cost objective.
D) In process costing, the amount of goods completed always increases finished goods inventory.

Topic: Equivalent Units
32. The number of fully completed units that equates with a given number of partially completed units is referred to as the:
A) Number of units in ending finished goods inventory
B) Equivalent completed units
C) The number of units sold this period
D) The number of units in ending Work-in-Process inventory

Topic: Weighted Average Equivalent Units
33. Using the weighted average method, whenever units in process are produced to a different percentage of completion for materials and labor, this creates a condition where:
A) The number of equivalent units in process will invariably be different for materials and conversion costs.
B) The cost per equivalent unit for materials and conversion will be equal.
C) It is inappropriate to use the process costing method.
D) None of the above

Topic: Process Service Costing
34. Process service costing measures the average cost of:
A) All services performed by the company in a given period
B) Identical or similar services performed by the company in a given period
C) Activities for activity based costing overhead rates
D) Services received from the company's vendors

Topic: Process Costing Environment
35. For which of the following manufactured products would process costing be more appropriate?
A) Modular homes
B) Luxury liners
C) Nylon fiber production
D) Special order printing

Topic: Process Costing Environment
36. For which of the following manufactured products would process costing be more appropriate?
A) Bridge construction
B) Crude oil refining
C) Custom-made jewelry
D) High rise buildings

Topic: Equivalent Units Calculation
37. The following information is available:

Units in process, Sept. 1 (60 percent converted) 4,000 units
Units in process, Sept. 30 (20 percent converted) 2,000 units
Units started during the month 14,000 units

Materials are added at the beginning of the process. How many equivalent units in process for conversion were there in Sept. using the weighted average method?
A) 18,000
B) 15,200
C) 17,000
D) 16,400

Topic: Weighted Average Process Costing
38. Which of the following statements is true about the weighted average process costing method?
A) If all raw materials are added to production at the beginning of the process, the number of equivalent units in process will equal the total number of individual units worked on during the period.
B) The cost of the units in beginning work-in-process is accounted for separately from the units started in the current period.
C) The method is applicable to any situation where the cost of a specific job is needed.
D) All the above statements are true.
Topic: Types of Inventories in Various Organizations
1. Indicate which of the following inventories are typically found in service, merchandising, and manufacturing organizations:

• Supplies Inventories
• Merchandise Inventories
• Raw Materials Inventories
• Work-in-Process Inventories
• Finished Goods Inventories
Topic: Product and Period Costs
2. Indicate whether each of the following costs incurred by a manufacturing are period or product costs.

1. Vice president of manufacturing salary
2. Vice president for human Resources salary
3. Plant janitorial costs
4. Corporate jet operating expense
5. Depreciation on the sales office
6. Depreciation on the production equipment
7. Manufacturing overhead
8. Direct materials
9. Advertising expense
10. Entertainment costs of vice president of manufacturing

Topic: Calculation of Predetermined Overhead
3. Alden, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $10,000,000 and total direct labor hours to be 200,000 hours. Calculate Alden's predetermined overhead rate.

In March, Alden incurred actual overhead costs of $830,000 and used 18,000 hours. How much was Alden's over- or underapplied overhead for the month of March?

Topic: Product versus Period Costs
4. Classify the following costs incurred in the manufacturing of cookie bars as either (a) Product Cost- Direct Materials, (b) Product Cost- Conversion, or (c) Period Cost.

Cost Incurred in Manufacturing of Cookies Classification
a. Depreciation on Automated Wrapping Machine
b. Cookie Dough
c. Peanut Butter
d. Plant Manager's Salary of $90,000
e. Overtime Pay of Production Workers
f. Cost of Air Time for New Radio Advertising
g. Salary of Plant Security Guard
h. Salary of Company Controller
i. Depreciation on Computers in Legal Staff Office
j. Manufacturing Department's Allocation of Cafeteria Costs
Topic: Job Order versus Process Costing
5. For each of the following independent manufacturing situations, indicate whether job-order or process costing is more appropriate and why.

a. A manufacturer of customized vans
b. A shoe manufacturer
c. A newsprint paper mill
d. A one-time order of 50,000 identical clips
e. A manufacturer of upscale men's suits
f. A building contractor for $500,000 homes
g. A manufacturer of airplanes
h. A maker of commercial chemicals
i. A one-size-fits-all hosiery mill
j. A manufacturer of yarn for the hosiery mill
Topic: Calculation of Total Period Costs
6. LandCorp obtained the following information from its absorption costing accounting records:

Operating Income $16,000
Total Product Costs incurred during the period $24,000
Value of Beginning Work-in-Process and Finished Goods Inventories $0
Value of Ending Work-in-Process and Finished Goods Inventories $0
Sales $50,000

Calculate the total Period Costs incurred this period

Topic: Cost of Goods Manufactured
7. Midwest Corp. obtained the following information from its accounting records:

Sales $70,000
Beginning Finished Goods Inventory $42,000
Ending Finished Goods Inventory $46,000
Cost of Goods Sold $40,000
Ending Work-in-Process Inventory $30,000

Calculate the Cost of Goods Manufactured for the period.
Topic: Raw Materials Used Calculation
8. Eleanor Corp. obtained the following information from the Raw Materials Inventory account and purchasing records for the first quarter of the current year:

Beginning Raw Materials $10,000
Ending Raw Materials $12,000
Jan. Purchases $12,000
Feb. Purchases $8,000
Mar. Purchases $10,000

Calculate the amount of Raw Materials used for this quarter.

Topic: Equivalent Units
9. Beginning inventory in February consisted of 10,000 units (60 percent converted) and ending inventory consisted of 20,000 units (30 percent converted). In addition, 50,000 units were started during the period. How many equivalent units for conversion costs were in process February using the weighted average method?

Topic: Units Completed Calculation
10. Dionis Company had the following data for the current fiscal period:

Units in process at the beginning of the month 6,000
Units in process at the end of the month 4,000
Units started during the month 20,000

Materials are added at the beginning of the process. Beginning work-in-process was 40 percent complete as to conversion. Ending work-in-process was 70 percent complete as to conversion.
Calculate the number of units completed and transferred out during the period?