Reference no: EM133109729

Questions -

Q1. The order in which the service centers and cost pools are allocated to the production departments will not affect the amounts of allocated costs each production department receives as the costs will eventually all get allocated to the production departments anyway.

a. True

b. False

Q2. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. What are the Ending Inventory Work-in-Process Equivalent Units for March for materials and conversion respectively?

a. 500 and 2000

b. 2000 and 4000

c. 4000 and 2500

d. 4000 and 2000

e. 6000 and 2500

Q3. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. On an Equivalent Units schedule (as taught in class) what are the Finish Beginning Inventory Work-in-Process Equivalent Units for March for materials and conversion respectively?

a. 500 and 2000

b. 0 and 1500

c. 2000 and 1500

d. 0 and 500

e. 2000 and 500

Q4. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. What is the total cost per equivalent unit for March?

a. $218,000

b. $249,800

c. $10.178

d. $0.4167

e. none of the above

Q5. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. What is the total cost of Work-in-Process Inventory as of March 31?

a. $32,406

b. $32,000

c. $15,900

d. $40,336

e. $40,000

Q6. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. What is the correct journal entry to record the transfer of completed units from the production department to the finished goods storage area?

a. debit Finished Goods for $201,900 and credit Work-In-Process for $201,900

b. debit Work-In-Process for $200,000 and credit Finished Goods for $200,000

c. debit Finished Goods for $200,000 and credit Work-In-Process for $200,000

d. debit Finished Goods for $203,560 and credit Work-In-Process for $203,560

e. none of the above

Q7. The data provided below is the same for each item in a set of interrelated items about the FIFO approach to processes costing. Only the question asked tends to differ from item to item. Together this set of items addresses the same problem. Students are encouraged to work the ENTIRE problem out on scratch paper before responding to any items that relate to this problem. Knuckle makes t-shirts. It uses the FIFO approach to process costing and has a single-stage Work-In-Process department. Materials costs are put into the product at the start of production. Conversion costs (labor and overhead) go into the product gradually as the product is worked on. During March, 20,000 t-shirts were completed and transferred to finished goods storage. At the end of March, there were 4000 t-shirts that were 100% complete as to materials and 50% complete as to conversion still in Work-In-Process. At the beginning of March, there were 2000 t-shirts that were 100% complete as to materials and 25% complete as to conversion. Beginning inventory for March had a cost of $12,600 for materials and $3,300 for conversion and all of those costs had been put into those partially completed beginning inventory units during February. Costs this period (during March) were $132,000 for materials and $86,000 for conversion. If Knuckle had elected to use the Weighted Average Method of Process Costing instead of the FIFO method, the total equivalent units for materials and conversion respectively would have been:

a. 26,000 and 22,500

b. 22,000 and 22,000

c. 144,600 and 89,300

d. 6.025 and 4.059

e. 24,000 and 22,000

Q8. The Direct Method is the method of cost allocation that uses simultaneous linear equations to allocate the costs of two or more service centers to each other.

a. True

b. False

Q9. The direct costs of a product line or segment can usually be traced to that product line or segment.

a. True

b. False

Q10. In each stem of the Direct Method of cost allocation, costs of any service department or cost pool are allocated only to other service departments or cost pools, but never to production departments.

a. True

b. False

Q11. Costs should always be allocated on some arbitrary basis if the manager doing the allocating is ethical, well-trained, and well-informed regarding cost allocation.

a. True

b. False

Q12. The intermediate cost objective for a firm that produces a single tangible product is always the total cost of production of that product.

a. True

b. False

Q13. If a product line or producing segment is discontinued, its indirect costs also automatically disappear as well.

a. True

b. False