1. Which of the following industries would normally use job order costing systems and which would normally use process costing systems?

a. Business consulting

b. Chemicals

c. Food

d. Movie

e. Soap and cosmetics

f. Web designer

ANS:

Job order	Process

2. The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department received 62,000 litres from the Purifying Department. During the period, the Bottling Department completed 65,000 litres, including 3,000 litres of work in process at the beginning of the period. The ending work in process was 5,000 litres. How many litres were started and completed during the period?

ANS:

3. The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,000 litres in beginning work in process inventory (30% complete). During the period 71,000 litres were completed. The ending work in process was 5,000 litres (70% completed). What are the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process?

ANS:

	Whole Units		Equivalent Units
Inventory in process, beginning of period
Started and completed during the period
Transferred out of Bottling (completed)
Inventory in process, end of period
Total units to be assigned costs

4. The Bottling Department of Mountain Springs Water Company had 5,000 litres in beginning work in process inventory (20% complete). During the period, 58,000 litres were completed. The ending work in process inventory was 3,000 litres (90% complete). What are the equivalent units for conversion costs under the FIFO method?

ANS:

	Whole Units		Equivalent Units
Inventory in process, beginning of period
Started and completed during the period
Transferred out of Bottling (completed)
Inventory in process, end of period
Total units to be assigned costs