Test 2 Chapters 3 and 4 (4 pts. each)

1. In a process costing system, manufacturing overhead is added to Work in Process

A. using a predetermined overhead rate or based on actual overhead.

B. only in the final production department.

C. at the same rate as the direct materials are added.

D. only when Work in Process is transferred to Finished Goods.

2. Transferred-in costs are recorded with a journal entry that includes a credit to

A. Raw Materials.

B. Manufacturing Overhead.

C. Work in Process.

D. Finished Goods.

3. Which of the following will never be a component of the cost of Work in Process in a company?s initial production department?

A. Direct material

B. Direct labor

C. Transferred-in costs

D. Manufacturing overhead

4. The Baking Department began the period with 16,000 units which were 45% complete. During the period, the department received another 78,000 units from the previous department, and at the end of the period, 9,000 units remained which were 40% complete. Conversion costs are added evenly throughout the process and materials are added at the beginning of the process. How much are equivalent units for conversion costs in the Baking Department?s Work in Process inventory at the end of the period?

A. 5,400 units

B. 3,600 units

C. 3,000 units

D. 9,000 units

5. The Shaping Department began June with 5,000 units which were 50% complete. During June, the department received another 60,000 units from the prior department and completed 62,000 units. The remaining units were 75% complete as to conversion costs. Materials are added at the beginning of the process. How much are equivalent units for conversion costs in the Shaping Department?s Work in Process inventory at the end of June?

A. 3,000 units

B. 5,250 units

C. 2,250 units

D. 1,250 units

6. When partially completed units are converted to a comparable number of completed units, they are referred to as

A. conversion units.

B. transferred-out units.

C. equivalent units.

D. units to be accounted for.

7. Hanover Glassware produces crystal serve ware and uses process costing. At the start of May, 2,300 units were in process. During May, 11,000 units were completed and 2,000 units were in process at the end of May. The units in process at the end of May were 80% complete with respect to material and 30% complete with respect to conversion costs. Other information is as follows:

Work in process, May 1:

Direct material $28,800

Conversion costs 48,000

Costs incurred during May:

Direct material $198,000

Conversion costs 242,000

How much is the cost per equivalent unit for direct materials?

A. $18.00

B. $25.00

C. $15.71

D. $39.75

8. Mash Company uses process costing. During March, its Varnishing Department incurred costs of $63,250 for conversion. The beginning inventory was 1,500 units and 9,700 units were transferred to the Varnishing Department from the Sanding Department during March. The Varnishing Department?s conversion costs in beginning inventory totaled $5,554. The ending inventory consisted of 1,200 units that were 25% complete with respect to conversion costs. Materials are added at the beginning of the process. What is the cost per equivalent unit for conversion costs?

A. $6.14

B. $6.88

C. $5.42

D. $6.38

9. Hanover Glassware produces crystal serve ware and uses process costing. At the start of May, 2,300 units were in process. During May, 11,000 units were completed and 2,000 units were in process at the end of May. These units in process were 80% complete with respect to material and 30% complete with respect to conversion costs. Other information is as follows:

Work in process, May 1:

Direct material $28,800

Conversion costs 48,000

Costs incurred during May:

Direct material $198,000

Conversion costs 242,000

Calculate the cost per equivalent unit for conversion costs.

A. $43.00

B. $25.00

C. $39.75

D. $17.45

10. Which of the following is not needed in order to calculate the cost per equivalent unit in process costing?

A. Equivalent units in beginning Work in Process Inventory

B. Cost added during the period

C. Units completed and transferred out of the department

D. Equivalent units in ending inventory

11. America Productions uses a process costing system. Its Belting Department?s Work in Process inventory account at March 31 consists of 7,000 units that are 100% complete with respect to materials and 70% complete with respect to conversion costs. If the total conversion cost in the Work in Process inventory account is $552,000 and the cost per equivalent unit for conversion costs is $6.00, how many units were completed and transferred out?

A. 92,000 units

B. 85,000 units

C. 87,100 units

D. 99,000 units

12. Cheese Heads Cheddar utilizes a process costing system. The beginning Work in Process Inventory in the Cutting Department consisted of 16,000 units which were 100% complete with respect to materials and 20% complete with respect to conversion costs. The ending Work in Process Inventory consisted of 12,000 units which were 100% complete with respect to materials and 50% complete with respect to conversion costs. The total cost in beginning inventory was $65,000 with an additional $270,400 added during the period. During the month, 62,000 units were transferred out to the next department. The equivalent cost per unit was $1.50 for materials and $3.30 for conversion costs. How much is the total cost of the inventory transferred out during the period?

A. $389,000

B. $224,400

C. $297,600

D. $93,000

13. Shiner Rock Car Wax uses a process costing system. The company has three processing departments?mixing, melting, and packaging. Ending Work in Process Inventory of the Mixing Department consists of 3,000 cans of wax in process carrying a total cost of $14,400. These units are 80% complete with respect to materials. The equivalent cost per unit for materials and conversion costs is $2.00 and $8.00, respectively. With regard to conversion costs, what percentage of completion is the ending inventory?

A. 100%

B. 40%

C. 80%

D. 60%

14. A cost is $4,900 at 800 units, $5,600 at 900 units, and $6,200 at 980 units. This cost is a

A. variable cost.

B. fixed cost.

C. mixed cost.

D. step cost.

15. Step costs

A. per unit are the same for each range of volume.

B. are classified as step variable or step fixed depending on the range of activity for which the cost remains fixed.

C. change in total at every level of activity.

D. are considered to be step fixed costs within a relatively small range.

16. A company has a cost that is $7.00 per unit at a volume of 10,000 units and $5.00 per unit at a volume of 14,000 units. What type of cost is this?

A. Fixed costs

B. Variable costs

C. Mixed costs

D. Incremental costs

17. Which of the following is not a method that is used to estimate variable and fixed costs?

A. Account analysis

B. High-low method

C. CVP analysis

D. Regression analysis

18. Bunch of Books, a producer of children?s books, has provided the following information:

Selling price per unit $6.60

Contribution margin per unit $3.00

Total fixed costs $46,200

What is the break-even point in books?

A. 20,790 books

B. 15,400 books

C. 12,833 books

D. 7,000 books

19. Duradyne, Inc. has total costs of $18,000 when 2,000 units are produced and $26,000 when 5,200 units are produced. During March, 4,000 units were produced and sold for $8 each. If the high-low method is used, how much is the variable cost per unit?

A. $2.50

B. $0.40

C. $2.00

D. $4.00

20. Ranger Pressure Cleaners has total monthly costs of $5,800 when 3,200 units are produced and $6,425 when 3,700 units are produced. If the high-low method is used, how much is the estimated total monthly fixed cost?

A. $625

B. $6,113

C. $7,250

D. $1,800

21. Carpet Renewal dyes carpets for residential customers. The company is interested in estimating fixed and variable costs. The following data are available for the month of June when 420 carpets were dyed:

Office rent $ 1,250

Depreciation - equipment 900

Cleaning supplies 5,140

Hourly wages 11,000

Transportation (variable) 3,600

Owner?s salary 3,100

Total $24,990

Using account analysis, how much is estimated variable cost per carpet?

A. $47.00

B. $38.43

C. $59.50

D. $52.12

22. Lawn Cut Perfection provided data concerning the costs incurred to mow residential lawns for which customers pay $45 per mowing. Data for the past 7 months are as follows:

January February March April May June July

Number of lawns mowed 200 110 150 100 220 120 210

Mowing cost $12,900 $8,120 $10,200 $8,200 $13,060 $8,400 $13,280

How much is the estimated variable cost of mowing one lawn using the high-low method?

A. $43.00

B. $40.50

C. $44.90

D. $51.60

23. Hardigree Insurance has collected the following information over the last six months.

Month Units produced Total costs

March 2,000 $6,700

April 3,200 9,400

May 2,200 7,100

June 3,000 9,500

July 2,800 8,000

August 2,100 6,600

Using the high-low method, how much is the total fixed cost?

A. $2,300

B. $2,200

C. $4,400

D. $7,910

24. Diva Products produces scarves. The estimated fixed costs for the year are $164,500, and the estimated variable costs per unit are $9. The company expects to produce and sell 40,000 scarves at a unit selling price of $16 per unit. By how much can sales revenue drop before Diva Products incurs a loss?

A. $16,500

B. $264,000

C. $23,500

D. $115,500

25. At Bahama Foods, the break-even point is 1,600 units. If fixed costs total $44,000 and variable costs are $12 per unit, what is the selling price per unit?

A. $15.50

B. $39.50

C. $63,200

D. There is not enough information provided to determine the answer.