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CHAPTER 3 PROCESS COSTING TRUE-FALSE STATEMENTS 1. Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature. 2. Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine. 3. A company that produces motion pictures would likely use a process cost system. 4. In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs. 5. In a process cost system, total costs are determined at the end of a month or year. 6. Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system. 7. In a process cost system, materials, labor and overhead are only added in the first production department. 8. The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system. 9. Fewer materials requisitions are generally required in a process cost system than in a job order cost system. 10. In a process cost system, labor costs incurred may be captured on time tickets. 11. A primary driver of overhead costs in continuous manufacturing operations is machine time used. Equivalent units of production are used to determine the cost per unit of completed products. 12. 13. Equivalent units of production measure the work done during a period, expressed in fully completed units. 14. Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process. 15. The weighted-average method of computing equivalent units is the most widely used method in practice. 16. There are no units in process at the beginning of the period, 1,500 units in process at the end of the period that are 40% complete, and 15,000 units transferred out during the period. Based on this information, there were 14,400 equivalent units of production during the period. 17. The first step performed in preparing a production cost report is computing the equivalent units of production. 18. Equivalent units of production must be calculated before the unit production costs can be computed. 19. The physical units in a department are another name for the equivalent units of production. 20. Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period. 21. When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing. 22. The total manufacturing cost per unit is used in costing the units completed and transferred during the period. 23. A production cost report is an internal document for management that shows production quantity and cost data for a particular job. 24. Production cost reports provide a basis for evaluating the productivity of a department. 25. Companies often use a combination of a process cost and a job order cost system, called operations costing. a 26. The FIFO method is easier to understand and use than the weighted-average method. a 27. The FIFO method is conceptually superior to the weighted-average method. a 28. When comparing the FIFO with the weighted-average method, the FIFO method provides current cost information. a 29. There are no units in ending work in process at the end of the period under the FIFO method. a 30. Companies using the weighted-average method do not complete units left over from the previous accounting periods, they start new units. 31. In continuous process manufacturing, generally once the production begins, it continues until the finished product emerges. 32. One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job. 33. The flow of costs in a process costing system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department. 34. When finished goods are sold, the entry to record the cost of goods sold is a debit to Finished Goods Inventory and a credit to Cost of Goods Sold. 35. When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production. 36. In order to compute the physical unit flow, a company must first compute unit production costs. 37. Under the FIFO method, it is assumed that the beginning work in process is completed before new work is started. MULTIPLE CHOICE QUESTIONS 38. 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. 39. 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. 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. 40. 41. 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. 42. 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. 43. 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. 44. Which of the following is a true statement about process cost systems? a. In process cost systems, costs are accumulated but not assigned. b. A process cost system has one work in process account for each process. c. In process cost systems, costs are summarized on job cost sheets. d. Unit costs are not computed in process cost systems. 45. 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 3 46. 47. 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. 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. 48. 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. 49. 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. 50. 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. 51. 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 ProcessPackaging Department. d. Manufacturing Overhead. 52. 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. 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. 53. 54. 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. 55. 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 ProcessCutting Department for $15,000. c. debit to Work in Process for $15,000. d. credit to Manufacturing Overhead for $24,000. 56. 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. 57. 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. 58. A process with no beginning work in process, completed and transferred out 95,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were: a. 95,000 equivalent units. b. 145,000 equivalent units. c. 110,000 equivalent units. d. 47,500 equivalent units. 59. 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. 60. 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 conversion costs for the month of January? a. 60,000 equivalent units. b. 72,000 equivalent units. c. 68,000 equivalent units. 5 d. 80,000 equivalent units. 61. 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. 62. 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. 63. Corsi Company had the following department data: Physical Units Work in process, beginning -0Completed and transferred out 70,000 Work in process, ending 7,000 Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period? a. 70,000. b. 7,000. c. 77,000. d. 63,000. 64. Gantner Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (60%) 60,000 Completed and transferred out 150,000 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. 65. It is necessary to calculate equivalent units of production in a department because a. a physical count of units is impossible. b. some units worked on in the department are not fully complete. c. the physical units in the department are always 100% complete. d. at times a department may use a job order cost system and then switch to a process cost system. 66. 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. How many units were transferred out of the process in June? a. 80,000 units. b. 70,000 units. c. 90,000 units. d. 100,000 units. 67. 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 materials for June were a. 90,000 equivalent units. b. 100,000 equivalent units. c. 104,000 equivalent units. d. 80,000 equivalent units. 68. 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 a. 80,000 equivalent units. b. 94,000 equivalent units. c. 90,000 equivalent units. d. 100,000 equivalent units. 69. A process with no beginning work in process, completed and transferred out 28,000 units during a period and had 14,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs? a. 35,000 equivalent units. b. 42,000 equivalent units. c. 49,000 equivalent units. d. 21,000 equivalent units. 70. 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? a. 24,000 equivalent units. b. 30,000 equivalent units. c. 22,000 equivalent units. d. 28,000 equivalent units. 7 71. Hanker Company had the following department data on physical units: Work in process, beginning Completed and transferred out Work in process, ending 3,000 12,000 2,400 Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period? a. 12,600. b. 2,400. c. 14,400. d. 9,000. 72.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 Completed and transferred out 18,000 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. 73. Gloria Company had no beginning work in process. During the period, 12,000 units were completed, and there were 1,200 units of ending work in process. How many units were started into production? a. 13,200. b. 12,000. c. 10,800. d. 1,200. 74. 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. 75. 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. 76. 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. 77. 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 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. 78. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 680,000 units, completed and transferred out 640,000 units, and ending work in process 80,000 units (40% complete). Assuming materials are entered at the beginning of the process, equivalent units for materials are: a. 720,000. b. 600,000. c. 640,000. d. 760,000. 79. The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 680,000 units, completed and transferred out 640,000 units, and ending work in 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. 80. Crawford Company has the following equivalent units for July: materials 20,000 and conversion costs 18,000. Production cost data are: Work in process, July 1 Costs added in July Materials $ 3,200 25,200 Conversion $ 1,500 21,000 The unit production costs for July are: Materials Conversion Costs a. $1.26 $1.25 b. 1.42 1.17 c. 1.26 1.17 d. 1.42 1.25 81. In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, transferred out 16,000 units, and had an ending work in process of 3,000 units. How many units were started by Moyer during the month? a. 10,000. 9 b. 13,000. c. 16,000. d. 19,000. 82. 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. 83. Holton Company has the following equivalent units for July: materials 20,000 and conversion 18,000. Production cost data are: Work in process, July 1 Costs added in July Materials $ 4,800 37,800 Conversion $ 2,250 31,500 The unit production costs for July are: a. b. c. d. Materials $1.89 2.13 1.89 2.13 Conversion Costs $1.88 1.75 1.75 1.88 84. 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. 85. In the Shaping Department of Jenkins Company the unit materials cost is $2.50 and the unit conversion cost is $1.50. The department transferred out 8,000 units and had 2,000 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. $1,600. b. $5,000. c. $5,600. d. $8,000. 86. Cinder Company had the following department information for the month: Total materials costs Equivalent units of materials Total conversion costs Equivalent units of conversion costs $ 80,000 10,000 $120,000 20,000 How much is the total manufacturing cost per unit? a. $14.00. b. $6.66. c. $6.00. d. $8.00. 87. Materials costs of $500,000 and conversion costs of $535,500 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, 100,000 units were started into production in September, and there were 8,000 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. $460,000. b. $977,500. c. $1,035,500. d. $1,063,000. 88. Materials costs of $500,000 and conversion costs of $535,500 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, 100,000 units were started into production in September, and there were 8,000 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 the 8,000 units in the ending work in process? a. $40,000. b. $18,000. c. $34,000. d. $58,000. 89. 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. 90. Byrd Company decided to analyze certain costs for June of the current year. Units started into production equaled 14,000 and ending work in process equaled 2,000 units. With no beginning work in process inventory, how much is the conversion cost per unit if ending work in process was 25% complete and total conversion costs equaled $35,000? a. $2.19. b. $8.75. c. $2.80. d. $1.40. 91. 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? 11 a. b. c. d. $4.00. $4.21. $15.00. $3.75. 92. Conversion cost per unit equals $7.00. Total materials costs are $60,000. Equivalent units are 20,000. How much is the total manufacturing cost per unit? a. $10.00. b. $7.00. c. $4.00. d. $3.00. 93. Physical units are 40,000. Total conversion costs are $237,000. There are 1,000 units in ending inventory which are 50% complete as to conversion costs. How much are conversion costs per unit? a. $6.00. b. $5.92. c. $11.86. d. $5.78. 94. 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. 95. Equivalent units for materials total 30,000. There were 24,000 units completed and transferred out. Equivalent units for conversion costs equal 27,000. How much are the physical units for conversion costs if ending work in process is 50% complete? a. 27,000. b. 30,000. c. 6,000. d. 24,000. 96. 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%. 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. 97. 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. 98. 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 in the ending work in process inventory on April 30 was a. $240,000. b. $210,000. c. $160,000. d. $290,000. 99. 100. 101. 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. If there are no units in process at the beginning of the period, then a. the company must be using a job order cost system. b. only one computation of equivalent units of production will be necessary. c. the units started into production will equal the number of units transferred out. d. the units to be accounted for will equal the units transferred out and the units in process at the end of the period. Which of the following is not a necessary step in preparing a production cost report? a. Compute the equivalent units of production. b. Compute the physical unit flow. c. Prepare the job order cost sheet. d. Prepare a cost reconciliation schedule. 102. 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. 103. In a process cost system, units to be accounted for in a department are equal to the a. number of units started or transferred into the department. b. number of units transferred out of the department. c. units in the beginning inventory plus the units started or transferred into the department. d. ending inventory plus the units started or transferred into the department. 104. The total units accounted for equals units in a. beginning work in process - units transferred out. 13 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. 105. The Slicing Department production process shows: Beginning Work in Process Ending Work in Process Total units to be accounted for Units 10,000 50,000 160,000 How many units were started into production in Department 1? a. 170,000. b. 110,000. c. 160,000. d. 150,000. 106. Department 1 of a two department production process shows: Beginning Work in Process Ending Work in Process Total units to be accounted for Units 10,000 50,000 160,000 How many units were transferred out to Department 2? a. 50,000. b. 110,000. c. 160,000. d. 150,000. 107. The Assembly Department shows the following information: Beginning Work in Process Ending Work in Process Units Transferred Out Units 20,000 50,000 31,000 How many total units are to be accounted for by the Assembly Department? a. 81,000. b. 50,000. c. 70,000. d. 61,000. 108. 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. 109. 110. A process began the month with 3,000 units in the beginning work in process inventory and ended the month with 2,000 units in the ending work in process. If 15,000 units were completed and transferred out of the process during the month, how many units were started into production during the month? a. 14,000. b. 16,000. c. 15,000. d. 13,000. 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. 111. 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. 112. If 120,000 units are transferred out of a department, there was no beginning work in process, and there are 20,000 units still in process at the end of a period, the number of units that were started into production during the period is a. 140,000. b. 120,000. c. 100,000. d. 20,000. 113. 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 a. b. c. d. 114. Materials $1.60 $1.60 $2.00 $2.40 Conversion Costs $1.40 $1.75 $1.40 $2.13 Conversion cost per unit equals $6. Total materials cost equal $80,000. Equivalent units for materials are 10,000. How much is the total manufacturing cost per unit? a. $14. b. $6. c. $12. d. $8. 15 115. The following department data are available: Total materials costs Equivalent units of materials Total conversion costs Equivalent units of conversion costs $240,000 60,000 $135,000 30,000 What is the total manufacturing cost per unit? a. $4.00. b. $4.50. c. $8.50. d. $6.25. 116. Byers Company had the following department information for the month: Total materials costs Equivalent units of materials Total conversion costs Equivalent units of conversion costs $48,000 5,000 $80,000 10,000 What is the total manufacturing cost per unit? a. $8.53. b. $8.00. c. $9.60. d. $17.60. 117. 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. 118. A department had the following information for the month: Total materials costs Conversion cost per unit Total manufacturing cost per unit $210,000 $3.00 $5.00 What are the equivalent units of production for materials? a. 105,000. b. 70,000. c. 42,000. d. Cannot be determined 119. Maisley Company decided to analyze certain costs for June of the current year. Units started into production equaled 28,000 and ending work in process equaled 4,000. With no beginning work in process inventory, how much is the conversion cost per unit if ending work in process was 25% complete and total conversion costs equaled $105,000? a. $3.30. b. $3.75. c. $4.20. d. $2.10. 120. 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. 121. 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 the 5,000 units in the ending work in process? a. $455,000. b. $500,000. c. $320,000. d. $200,000. 122. 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. 123. Madison Industries has equivalent units of 8,000 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. $15. b. $5. c. $20. d. $4. 124. In a process cost system, a production cost report is prepared a. only for the first processing department. b. for all departments in the aggregate. c. for each processing department. d. only for the last processing department. 125. 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. 17 d. will not identify a specific department if more than one department is involved in the production process. 126. 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. a 127. The Cutting Department's output during the period consists of 18,000 units completed and transferred out, and 4,000 units in ending work in process that were 25% complete as to materials and conversion costs. Beginning inventory was 2,000 units that were 25% complete as to materials and conversion costs. Under the FIFO method, what are the equivalent units of production for materials? a. 20,300 b. 18,500 c. 21,300 d. 20,000 a 128. 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 a 129. a 130. 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 conversion costs if the FIFO method is used? a. 60,400 b. 64,600 c. 56,000 d. 58,600 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 a 131. Schiller Company has unit costs of $3 for materials and $9 for conversion costs. There are 5,600 units in ending work in process which are 25% complete as to conversion costs, and fully complete as to materials cost. How much is the total cost assigned to the ending work in process inventory if the FIFO method is used? a. 29,400 b. 67,200 c. 16,800 d. 12,600 a 132. 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 a 133. Special Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (60%) 36,000 Completed and transferred out 65,000 Work in process, May 31 (50%) 30,000 Materials are added at the beginning of the production process. Conversion costs are added equally throughout production. What is the total number of equivalent units during May for conversion costs if the FIFO method is used? a. 131,000 b. 80,000 c. 58,400 d. 109,400 a 134. Hanker Company had the following department data on physical units: Work in process, beginning Completed and transferred out Work in process, ending 2,500 14,000 2,000 Materials are added at the beginning of the process. What is the total number of equivalent units for materials if the FIFO method is used? a. 14,500 b. 13,500 c. 16,000 d. 11,500 135. A process cost system would be used by all of the following except a(n) a. chemical company. b. advertising company. c. oil company. d. computer chip company. 136. 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. 137. The basic similarities between job order cost and process cost systems include all of the following except the a. manufacturing cost elements. b. flow of costs. c. point at which costs are totaled. 19 d. accumulation of the costs of materials, labor, and overhead. 138 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. 139. Total physical units to be accounted for are equal to the units a. started (or transferred) into production. b. started (or transferred) into production plus the units in beginning work in process. c. started (or transferred) into production less the units in beginning work in process. d. completed and transferred out. 140. 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. 141. In Saint-Simon, Inc., the Assembly Department started 30,000 units and completed 35,000 units. If beginning work in process was 15,000 units, how many units are in ending work in process? a. 0. b. 5,000. c. 10,000. d. 20,000. 142. 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. 143. In the Camria Company, materials are entered at the beginning of the process. If there is no beginning work in process, but there is an ending work in process inventory, the number of equivalent units as to materials costs will be a. the same as the units started. b. the same as the units completed. c. less than the units started. d. less than the units completed. 144. 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. 145. 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. 146. In a production cost report, which one of the following sections is not shown under Costs? a. Unit costs. b. Costs to be accounted for. c. Costs during the period. d. Units accounted for. BRIEF EXERCISES BE 147 Tip Top Painting Company has the following production data for January: Beginning work in process, 0 units Units transferred out, 35,000 Units in ending work in process, 8,000, which are 30% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs. Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 148 Lowman Painting Company has the following production data for March: Beginning work in process, 2,000 units Units transferred out, 42,000 Units in ending work in process, 10,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs. Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 149 The Kirkland Department of Delta Company began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 5,000 units that are 100% complete as to materials and 60% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December. Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management 21 BE 150 White Supplies' total material costs are $50,000 and total conversion costs are $40,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs. Instructions Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 151 Apoly Company has the following production data for January. Ending Work in Process Beginning Work in Process Units Started into Production Units % Complete as to Conversion Cost -0- 8,500 900 30% Instructions Compute the physical units for January. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 152 Sandusky Widget Company has the following production data for March. Ending Work in Process Month Beginning Work in Process Units Transferred Out Units % Complete as to Conversion Cost March 1,200 8,100 800 20% Instructions Compute the physical units for March. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 153 Sequal Company has the following production data for June: units transferred out 50,000, and ending work in process 6,000 units that are 100% complete for materials and 30% complete for conversion costs. Unit materials cost is $5 and unit conversion cost is $9. Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 154 Tomlinson Company has the following production data for May: Beginning work in process, 0 units Units started, 62,000 Ending work in process, 5,000 units that are 100% complete for materials and 60% complete for conversion costs Unit materials cost, $5 Unit conversion cost, $10 Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management 23 BE 155 Dirt Cleaners, Inc. has the following production data for January: Transferred out Ending work in process 50,000 units 6,000 units The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $6 per unit and conversion costs are $11 per unit. Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management BE 156 Production costs chargeable to the Sanding Department in July for Joyful Art are $20,000 for materials, $26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 20,000 for conversion costs. Instructions Compute the unit costs for materials and conversion costs. Ans: N/A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management a BE 157 Tip Top Painting Company has the following production data for March: Beginning work in process, 2,000 units, which are 30% complete for conversion costs Units transferred out, 44,000 Units in ending work in process, 6,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs using the FIFO method. Ans: N/A, LO: 8, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management a BE 158 The Kirkland Department of Delta Company began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 20% complete as to conversion costs. Units transferred out are 12,000 units. Ending work in process contains 1,000 units that are 100% complete as to materials and 60% complete as to conversion costs. Instructions Compute equivalent units of production for both materials and conversion costs for the month of December using the FIFO method. Ans: N/A, LO: 8, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management EXERCISES Ex. 159 Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system. (a) Purchased raw materials for $50,000 on account. (b) Raw materials requisitioned for production were: Direct materials Mixing department Finishing department $20,000 14,000 (c) Incurred labor costs of $69,000. (d) Factory labor used: Mixing department Finishing department $44,000 25,000 (e) Manufacturing overhead is applied to the product based on machine hours used in each department: Mixing department300 machine hours at $30 per machine hour. Finishing department500 machine hours at $20 per machine hour. (f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department. (g) Units costing $60,000 were completed in the Finishing Department and were transferred to finished goods. (h) Finished goods costing $40,000 were sold on account for $55,000. Instructions Prepare the journal entries to record the preceding transactions for Lutz Company. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 20, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Ex. 160 Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in ProcessFabricating, $6,030; Work in ProcessFinishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred: 1. Purchased $40,000 of raw materials on account. 2. Incurred $65,000 of factory labor. Wages are unpaid. 3. Incurred $50,000 of manufacturing overhead; $40,000 was paid and the remainder is unpaid. 4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000. 5. Used factory labor for Finishing, $52,000 and Fabricating, $13,000. 6. Applied $45,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating. 25 Instructions Journalize the transactions for the month. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 12, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Ex. 161 The Pasta Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following debits: Cooking Packaging Beginning work in process $ -0$ 6,000 Materials 40,000 26,000 Labor 16,000 9,000 Overhead 30,000 19,000 Costs transferred in 65,000 Instructions Journalize the February transactions that involved the work in process accounts. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Ex. 162 Benson Industries uses a process cost system. Products are processed first by Department A, second by Department B, and then they are transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October: Costs of units transferred in Manufacturing costs added in Department B: Direct materials Direct labor Manufacturing overhead Total costs charged to Department B in October $120,000 $50,000 6,000 19,000 75,000 $195,000 The cost of work in process in Department B at October 1 is $25,000, and the cost of work in process at October 31 has been determined to be $30,000. Instructions Prepare journal entries to record for the month of October: (a) The transfer of production from Department A to B. (b) The manufacturing costs incurred by Department B. (c) The transfer of completed units from Department B to the finished goods warehouse. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Ex. 163 Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000. Instructions Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Ex. 164 Muffy Painting Company has the following production data for March. Month March Beginning Units Work in Process Transferred Out 3,000 42,000 Ending Work in Process % Complete as to Units Conversion Cost 8,000 75% Instructions Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process. Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 165 The Nitrogen Fixation Department of Tomco Company began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 12,000 units. Ending work in process contains 5,000 units that are 100% complete as to materials and 40% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December. Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 166 At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows: Month July Sept. Beginning Work In Process Percentage Units Completed -0 2,500 20% Units Completed and Transferred Out 11,000 9,000 Ending Work In Process Percentage Units Completed 500 90% 4,000 70% Instructions (a) Compute the physical units for July. (b) Compute the equivalent units of production for materials and conversion costs for September. 27 Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 167 Watts Company adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Instructions Complete the following calculation of equivalent units for materials and conversion costs. Equivalent Units Materials Conversion Costs Physical Units Completed and transferred out 40,000 Ending work in process Materials Conversion costs, 75% complete 9,000 Total units Ans: N/A, LO: 5,6, Bloom: AN, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 168 The general ledger of Oates Company has the following work in process account. WORK IN PROCESSFINISHING 6/1 6/30 6/30 6/30 6/30 Balance Materials Labor Overhead Balance 8,000 1,800 3,800 2,800 ? 6/30 Transferred out ? Production records show that there were 2,000 units in beginning inventory, 50% complete; 6,000 units started, and 4,500 units transferred out. The beginning work in process had conversion costs of $3,300. The units in ending inventory were 60% complete. Materials are added at the beginning of the process. Instructions Answer the following questions. (a) How many units are in process at June 30? (b) What is the unit conversion cost for June? (c) What is the conversion cost in the June 30 inventory? Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Hard, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 169 The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,500 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs. Other data for the month of July are as follows: Beginning work in process inventory, 7/1 Units completed and transferred out Ending work in process inventory, 7/31 Ex. 169 (Cont.) 25,000 units 90,000 units 30,000 units (40% complete) (30% complete) Instructions Answer the following questions and show computations to support your answers. 1. How many physical units have to be accounted for in July? 2. What are the equivalent units of production for materials and for conversion costs for the month of July? 3. What is the total cost assigned to the 90,000 units that were transferred out of the process in July? 4. What is the total cost of the July 31 inventory? Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 170 The Finishing Department of Edwards Company has the following production and cost data for July: 1. Transferred out, 4,000 units. 2. Started 2,000 units that are 40% completed at July 31. 3. Materials added, $30,000; conversion costs incurred, $19,200. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Instructions (a) Compute the equivalent units of production for materials and conversion costs for the month of July. (b) Compute unit costs and prepare a cost reconciliation schedule. Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Medium, Min: 15, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 171 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 Conversion costs incurred Units completed and transferred out in March Units in ending work in process March 31 (40% complete) $305,000 $120,000 65,000 25,000 Instructions 29 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: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 172 Given below are the production data for Department No. 1 for the first month of operation: Costs charged to Department 1: Materials $12,000 Labor 2,600 Overhead 13,600 During this first month of operations, 3,000 units were started into production; 2,500 units were transferred out; and the remaining 500 units are 100% completed with respect to materials and 40% complete with respect to conversion costs. Instructions Compute the following: (a) Unit materials cost. (b) Equivalent units of conversion costs. (c) Unit conversion cost. (d) Total cost of 500 units in process at end of month. (e) Total cost of 2,500 units transferred out. Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Hard, Min: 14, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 173 The ledger of Kinsler Company has the following work in process account. 5/1 5/31 5/31 5/31 5/31 Balance Materials Labor Overhead Balance Work in ProcessPainting 5,390 5/31 Transferred out 7,740 4,110 2,470 ? ? 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: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 174 The Cutting Department of Sanderson Company has the following production and cost data for July. Production 1. Transferred out 10,000 units 2. Started 5,000 units that are 60% complete as to conversion costs and 100% complete as to materials at July 31. Costs Beginning work in process Materials Labor Manufacturing overhead $ -060,000 21,600 25,200 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Instructions (a) Determine the equivalent units of production for (1) materials and (2) conversion costs. (b) Compute unit costs and prepare a cost reconciliation schedule. Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management Ex. 175 Wilkinson Company has gathered the following information. Units in beginning work in process Units started into production Units in ending work in process Percent complete for conversion costs in ending work in process Costs incurred: Direct materials Direct labor Overhead -060,000 10,000 40% $ 81,000 $ 99,000 $130,500 Instructions (a) Compute equivalent units of production for materials and for conversion costs. (b) Determine the unit costs of production. (c) Show the assignment of costs to units transferred out and in process. Ans: N/A, LO: 5,6, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management 31 Ex. 176 Carlton Company has gathered the following information Units in beginning work in process Units started into production Units in ending work in process Percent complete for conversion costs in ending work in process Costs incurred: Direct materials Direct labor Overhead 25,000 115,000 30,000 60% $161,000 $235,400 $180,600 Instructions (a) Compute equivalent