Post on 03-Jan-2016
description
transcript
Chapter 6—Process Costing
MULTIPLE CHOICE
1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments?a. standardb. actualc. processd. job order
ANS: C PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
2. Process costing is used in companies thata. engage in road and bridge construction.b. produce sailboats made to customer specifications.c. produce bricks for sale to the public.d. construct houses according to customer plans.
ANS: C PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
3. A producer of ____ would not use a process costing system.a. gasolineb. potato chipsc. blank videotapesd. stained glass windows
ANS: D PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 2
4. A process costing system is used by a company thata. produces heterogeneous products.b. produces items by special request of customers.c. produces homogeneous products.d. accumulates costs by job.
ANS: C PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
5. Which is the best cost accumulation procedure to use for continuous mass production of like units?a. actualb. standardc. job orderd. process
ANS: D PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
6. Equivalent units of production are equal to thea. units completed by a production department in the period.b. number of units worked on during the period by a production department.c. number of whole units that could have been completed if all work of the period had been
used to produce whole units.d. identifiable units existing at the end of the period in a production department.
ANS: C PTS: 1 DIF: Moderate OBJ: 6-2NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
7. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP?a. only current period costb. current period cost plus the cost of beginning inventoryc. current period cost less the cost of beginning inventoryd. current period cost plus the cost of ending inventory
ANS: B PTS: 1 DIF: Easy OBJ: 6-2NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
8. The weighted average method is thought by some accountants to be inferior to the FIFO method because ita. is more difficult to apply.b. only considers the last units worked on.c. ignores work performed in subsequent periods.d. commingles costs of two periods.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 3
9. The first step in determining the cost per EUP per cost component under the weighted average method is toa. add the beginning Work in Process Inventory cost to the current period's production cost.b. divide the current period's production cost by the equivalent units.c. subtract the beginning Work in Process Inventory cost from the current period's
production cost.d. divide the current period's production cost into the EUP.
ANS: A PTS: 1 DIF: Moderate OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
10. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent unitsa. started and completed during the period.b. residing in beginning Work in Process Inventory.c. residing in ending Work in Process Inventory.d. uncompleted in Work in Process Inventory.
ANS: B PTS: 1 DIF: Moderate OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
11. EUP calculations for standard process costing are the same asa. the EUP calculations for weighted average process costing.b. the EUP calculations for FIFO process costing.c. LIFO inventory costing for merchandise.d. the EUP calculations for LIFO process costing.
ANS: B PTS: 1 DIF: Moderate OBJ: 6-5NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
12. In a FIFO process costing system, which of the following are assumed to be completed first in the current period?a. units started this periodb. units started last periodc. units transferred outd. units still in process
ANS: B PTS: 1 DIF: Easy OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
13. To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in unitsa. completed during the period and units in ending inventory.b. completed from beginning inventory, units started and completed during the period, and
units partially completed in ending inventory.c. started during the period and units transferred out during the period.d. processed during the period and units completed during the period.
ANS: B PTS: 1 DIF: Moderate OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 4
14. The FIFO method of process costing will produce the same cost of goods transferred out amount as the weighted average method whena. the goods produced are homogeneous.b. there is no beginning Work in Process Inventory.c. there is no ending Work in Process Inventory.d. beginning and ending Work in Process Inventories are each 50 percent complete.
ANS: B PTS: 1 DIF: Easy OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
15. The primary difference between the FIFO and weighted average methods of process costing isa. in the treatment of beginning Work in Process Inventory.b. in the treatment of current period production costs.c. in the treatment of spoiled units.d. none of the above.
ANS: A PTS: 1 DIF: Easy OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
16. Material is added at the beginning of a process in a process costing system. The beginning Work in Process Inventory for the process was 30 percent complete as to conversion costs. Using the FIFO method of costing, the number of equivalent units of material for the process during this period is equal to thea. beginning inventory this period for the process.b. units started and completed this period in the process.c. units started this period in the process plus the beginning Work in Process Inventory.d. units started and completed this period plus the units in ending Work in Process Inventory.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
17. In a cost of production report using process costing, transferred-in costs are similar to thea. cost of material added at the beginning of production.b. conversion cost added during the period.c. cost transferred out to the next department.d. cost included in beginning inventory.
ANS: A PTS: 1 DIF: Easy OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
18. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is aa. debit Work in Process Inventory #2, credit Finished Goods Inventory.b. debit Finished Goods Inventory, credit Work in Process Inventory #1.c. debit Finished Goods Inventory, credit Work in Process Inventory #2.d. debit Cost of Goods Sold, credit Work in Process Inventory #2.
ANS: C PTS: 1 DIF: Easy OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 5
19. Transferred-in cost represents the cost froma. the last department only.b. the last production cycle.c. all prior departments.d. the current period only.
ANS: C PTS: 1 DIF: Easy OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
20. Which of the following is(are) the same between the weighted average and FIFO methods of calculating EUPs?
Units to EUP Total cost toaccount for calculations account for
a. no yes no
b. yes yes yes
c. yes no no
d. yes no yes
ANS: D PTS: 1 DIF: Easy OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
21. Process costing techniques should be used in assigning costs to productsa. if a product is manufactured on the basis of each order received.b. when production is only partially completed during the accounting period.c. if a product is composed of mass-produced homogeneous units.d. whenever standard-costing techniques should not be used.
ANS: C PTS: 1 DIF: Easy OBJ: 6-1NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
22. Averaging the total cost of completed beginning work-in-process inventory and units started and completed over all units transferred out is known asa. strict FIFO.b. modified FIFO.c. weighted average costing.d. normal costing.
ANS: B PTS: 1 DIF: Moderate OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 6
23. A process costing systema. cannot use standard costs.b. restates Work in Process Inventory in terms of completed units.c. accumulates costs by job rather than by department.d. assigns direct labor and manufacturing overhead costs separately to units of production.
ANS: B PTS: 1 DIF: Easy OBJ: 6-2NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
24. A process costing system does which of the following?
Calculates EUPs Assigns costs to inventories
a. no no
b. no yes
c. yes yes
d. yes no
ANS: C PTS: 1 DIF: Easy OBJ: 6-3NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
25. A process costing system
Calculates average cost Determines total units toper whole unit account for
a. yes yes
b. no no
c. yes no
d. no yes
ANS: D PTS: 1 DIF: Easy OBJ: 6-2NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
26. A hybrid costing system combines characteristics ofa. job order and standard costing systems.b. job order and process costing systems.c. process and standard costing systems.d. job order and normal costing systems.
ANS: B PTS: 1 DIF: Easy OBJ: 6-6NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 7
27. When standard costs are used in process costing,a. variances can be measured during the production period.b. total costs rather than current production and current costs are used.c. process costing calculations are made simpler.d. the weighted average method of calculating EUPs makes computing transferred-out costs
easier.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-5NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
28. Which of the following is subtracted from weighted average EUP to derive FIFO EUP?a. beginning WIP EUP completed in current periodb. beginning WIP EUP produced in prior periodc. ending WIP EUP not completedd. ending WIP EUP completed
ANS: B PTS: 1 DIF: Easy OBJ: 6-4NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
29. The cost of abnormal continuous losses isa. considered a product cost.b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis.c. written off as a loss on an equivalent unit basis.d. absorbed by all units past the inspection point.
ANS: C PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
30. Abnormal spoilage can be
continuous discrete
a. yes nob. no noc. yes yesd. no yes
ANS: C PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
31. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considereda. normal and discrete.b. normal and continuous.c. abnormal and discrete.d. abnormal and continuous.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 8
32. A continuous lossa. occurs unevenly throughout a process.b. never occurs during the production process.c. always occurs at the same place in a production process.d. occurs evenly throughout the production process.
ANS: D PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
33. Which of the following would be considered a discrete loss in a production process?a. adding the correct ingredients to make a bottle of ketchupb. putting the appropriate components together for a stereoc. adding the wrong components when assembling a stereod. putting the appropriate pieces for a bike in the box
ANS: C PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
34. The method of neglect handles spoilage that isa. discrete and abnormal.b. discrete and normal.c. continuous and abnormal.d. continuous and normal.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
35. The cost of normal discrete losses isa. absorbed by all units past the inspection point on an equivalent unit basis.b. absorbed by all units in ending inventory.c. considered a period cost.d. written off as a loss on an equivalent unit basis.
ANS: A PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
36. The cost of abnormal continuous losses isa. considered a product cost.b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis.c. written off as a loss on an equivalent unit basis.d. absorbed by all units past the inspection point.
ANS: C PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 9
37. Normal spoilage units resulting from a continuous processa. are extended to the EUP schedule.b. result in a higher unit cost for the good units produced.c. result in a loss being incurred.d. cause estimated overhead to increase.
ANS: B PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
38. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considereda. normal and discrete.b. normal and continuous.c. abnormal and discrete.d. abnormal and continuous.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
39. Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?a. Miscellaneous Revenueb. Loss from Spoilagec. Finished Goodsd. Work in Process
ANS: D PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
40. The cost of abnormal discrete units must be assigned to
good units lost units
a. yes yesb. no noc. yes nod. no yes
ANS: D PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 10
41. Which of the following statements is false? The cost of rework on defective units, ifa. abnormal, should be assigned to a loss account.b. normal and if actual costs are used, should be assigned to material, labor and overhead
costs of the good production.c. normal and if standard costs are used, should be considered when developing the overhead
application rate.d. abnormal, should be prorated among Work In Process, Finished Goods, and Cost of Goods
Sold.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
42. If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that spoilage should bea. included with the cost of the units sold during the period.b. included with the cost of the units completed in that department during the period.c. allocated to ending work in process units and units transferred out based on their relative
values.d. allocated to the good units that have passed the inspection point.
ANS: D PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
43. Dallas Co. has a production process in which the inspection point is at 65 percent of conversion. The beginning inventory for July was 35 percent complete and ending inventory was 80 percent complete. Normal spoilage costs would be assigned to which of the following groups of units, using FIFO costing?
Beginning Ending Units StartedInventory Inventory & Completed
a. no yes yes
b. yes yes yes
c. no no yes
d. yes no no
ANS: B PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
44. Which of the following is not a question that needs to be answered with regard to quality control?a. What happens to the spoiled units?b. What is the actual cost of spoilage?c. How can spoilage be controlled?d. Why does spoilage happen?
ANS: A PTS: 1 DIF: Moderate OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 11
45. Normal spoilage units resulting from a continuous processa. are extended to the EUP schedule.b. result in a higher unit cost for the good units produced.c. result in a loss being incurred.d. cause estimated overhead to increase.
ANS: B PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
46. The addition of material in a successor department that causes an increase in volume is calleda. accretion.b. reworked units.c. complex procedure.d. undetected spoilage.
ANS: A PTS: 1 DIF: Easy OBJ: 6-8NAT: AACSB: Reflective ThinkingLOC: AICPA Functional Competencies: Measurement, Reporting
47. Wood Company transferred 5,500 units to Finished Goods Inventory during October. On October 1, the company had 300 units on hand (40 percent complete as to both material and conversion costs). On October 31, the company had 800 units (10 percent complete as to material and 20 percent complete as to conversion costs). The number of units started and completed during October was:a. 5,200.b. 5,380.c. 5,500.d. 6,300.
ANS: AUnits Transferred Out 5,500Less: Units in Beginning Inventory (300) Units Started and Completed 5,200
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
48. Cole Company transferred 6,000 units to Finished Goods Inventory during August. On August 1, the company had 400 units on hand (35 percent complete as to both material and conversion costs). On August 31, the company had 750 units (20 percent complete as to material and 30 percent complete as to conversion costs). The number of units started and completed during August was:a. 5,600b. 5,860c. 6,000d. 6,750
ANS: AUnits Transferred Out 6,000Less: Units in Beginning Inventory (400) Units Started and Completed 5,600
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 12
49. Boggs Company started 9,000 units in March. The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs. Beginning Work in Process Inventory units werea. 500.b. 600.c. 1,500.d. 2,000.
ANS: CBeginning Work in Process 1,500Add: Units Started 9,000
Deduct: Units Transferred Out (7,000)
Ending Work in Process 3,500
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
50. Williams Company started 8,600 units in April. The company transferred out 6,400 finished units and ended the period with 3,200 units that were 40 percent complete as to both material and conversion costs. Beginning Work in Process Inventory units werea. 400.b. 1,000.c. 1,280.d. 2,200.
ANS: BBeginning Work in Process 1,000Add: Units Started 8,600
Deduct: Units Transferred Out (6,400)
Ending Work in Process 3,200
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
51. Lincoln Company had beginning Work in Process Inventory of 5,000 units that were 40 percent complete as to conversion costs. Lincoln Company started and completed 42,000 units this period and had ending Work in Process Inventory of 12,000 units. How many units were started this period?a. 42,000b. 47,000c. 54,000d. 59,000
ANS: CBeginning Work in Process 5,000Add: Units Started 54,000Deduct: Units Transferred Out ( 47,000)
Ending Work in Process 12,000
PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 13
52. Douglas Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to conversion costs. Douglas Company started and completed 46,000 units this period and had ending Work in Process Inventory of 11,000 units. How many units were started this period?a. 46,000b. 52,000c. 57,000d. 63,000
ANS: CBeginning Work in Process 6,000Add: Units Started 57,000Deduct: Units Transferred Out ( 52,000)
Ending Work in Process 11,000
PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
53. Streete Company uses a weighted average process costing system. Material is added at the start of production. Streete Company started 13,000 units into production and had 4,500 units in process at the start of the period that were 60 percent complete as to conversion costs. If Streete Company transferred out 11,750 units, how many units were in ending Work in Process Inventory?a. 1,250b. 3,000c. 3,500d. 5,750
ANS: DBeginning Work in Process 4,500Add: Units Started 13,000
Deduct: Units Transferred Out ( 11,750)
Ending Work in Process 5,750
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
54. Roache Company uses a weighted average process costing system. Material is added at the start of production. Roache Company started 14,000 units into production and had 5,000 units in process at the start of the period that were 75 percent complete as to conversion costs. If Roache Company transferred out 12,250 units, how many units were in ending Work in Process Inventory?a. 1,750b. 3,000c. 5,500d. 6,750
ANS: DBeginning Work in Process 5,000Add: Units Started 14,000
Deduct: Units Transferred Out ( 12,250)
Ending Work in Process 6,750
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 14
55. Jones Company uses a weighted average process costing system and started 30,000 units this month. Jones had 12,000 units that were 20 percent complete as to conversion costs in beginning Work in Process Inventory and 3,000 units that were 40 percent complete as to conversion costs in ending Work in Process Inventory. What are equivalent units for conversion costs?a. 37,800b. 40,200c. 40,800d. 42,000
ANS: BBeginning Work in Process 12,000 20% 2,400+ Completion of Units in Process 12,000 80% 9,600
+ Units Started and Completed 27,000 100% 27,000
+ Ending Work in Process 3,000 40% 1,200
Equivalent Units of Production 40,200
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
56. Summers Company uses a weighted average process costing system and started 36,000 units this month. Jones had 15,000 units that were 25 percent complete as to conversion costs in beginning Work in Process Inventory and 6,000 units that were 35 percent complete as to conversion costs in ending Work in Process Inventory. What are equivalent units for conversion costs?a. 43,350b. 47,100c. 48,900d. 51,000
ANS: BBeginning Work in Process 15,000 25% 3,750+ Completion of Units in Process 15,000 75% 11,250
+ Units Started and Completed 30,000 100% 30,000
+ Ending Work in Process 6,000 35% 2,100
Equivalent Units of Production 47,100
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
57. Weston Company makes small metal containers. The company began April with 250 containers in process that were 30 percent complete as to material and 40 percent complete as to conversion costs. During the month, 5,000 containers were started. At month end, 1,700 containers were still in process (45 percent complete as to material and 80 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for conversion costs?a. 3,450b. 4,560c. 4,610d. 4,910
Chapter 6 15
ANS: DBeginning Work in Process 250 40% 100+ Completion of Units in Process 250 60% 150
+ Units Started and Completed 3,300 100% 3,300
+ Ending Work in Process 1,700 80% 1,360
Equivalent Units of Production 4,910
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
58. Meade Company makes small metal containers. The company began October with 300 containers in process that were 35 percent complete as to material and 45 percent complete as to conversion costs. During the month, 6,000 containers were started. At month end, 1,900 containers were still in process (40 percent complete as to material and 75 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for conversion costs?a. 4,265b. 5,590c. 5,825d. 6,300
ANS: CBeginning Work in Process 300 45% 135+ Completion of Units in Process 300 55% 165+ Units Started and Completed 4,100 100% 4,100
+ Ending Work in Process 1,900 75% 1,425
Equivalent Units of Production 5,825
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
59. Ormandy Company uses a FIFO process costing system. The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month. The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process?a. 18,000b. 22,000c. 25,000d. 27,000
ANS: BThe material is added at the beginning of the process; therefore there are 22,000 equivalent units of material.
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
60. Bernstein Company uses a FIFO process costing system. The company had 6,000 units that were 75 percent complete as to conversion costs at the beginning of the month. The company started 25,000 units this period and had 8,000 units in ending Work in Process Inventory that were 40 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process?
Chapter 6 16
a. 18,500b. 25,000c. 26,500d. 31,000
ANS: BThe material is added at the beginning of the process; therefore there are 25,000 equivalent units of material.
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
61. Montgomery Company makes fabric-covered hatboxes. The company began July with 500 boxes in process that were 100 percent complete as to cardboard, 80 percent complete as to cloth, and 60 percent complete as to conversion costs. During the month, 3,300 boxes were started. On April 30, 350 boxes were in process (100 percent complete as to cardboard, 70 percent complete as to cloth, and 55 percent complete as to conversion costs). Using the FIFO method, what are equivalent units for cloth?a. 3,295b. 3,395c. 3,450d. 3,595
ANS: ABeginning Work in Process (Ignored for FIFO) 500 0% -+ Completion of Units in Process 500 20% 100
+ Units Started and Completed 2,950 100% 2,950
+ Ending Work in Process 350 70% 245
Equivalent Units of Production 3,295
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
62. Hahn Company makes fabric-covered storage totes. The company began July with 600 totes in process that were 100 percent complete as to cardboard, 75 percent complete as to cloth, and 65 percent complete as to conversion costs. During the month, 3,600 totes were started. On April 30, 450 totes were in process (100 percent complete as to cardboard, 60 percent complete as to cloth, and 50 percent complete as to conversion costs). Using the FIFO method, what are equivalent units for cloth?a. 3,570b. 3,750c. 3,870d. 4,020
ANS: ABeginning Work in Process (Ignored for FIFO) 600 0% -+ Completion of Units in Process 600 25% 150
+ Units Started and Completed 3,150 100% 3,150
+ Ending Work in Process 450 60% 270
Equivalent Units of Production 3,570
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Brewer Corporation
Chapter 6 17
Brewer Corporation. has the following information for August:
Beginning Work in Process Inventory(70% complete as to conversion) 6,000 units
Started 24,000 units
Ending Work in Process Inventory(10% complete as to conversion) 8,500 units
Beginning WIP Inventory Costs:Material $23,400
Conversion 50,607
Current Period Costs:Material $31,500
Conversion 76,956
All material is added at the start of the process and all finished products are transferred out.
63. Refer to Brewer Corporation. How many units were transferred out in August?a. 15,500b. 18,000c. 21,500d. 24,000
ANS: CBeginning Work in Process 6,000Add: Units Started 24,000Deduct: Units Transferred Out (21,500)Ending Work in Process 8,500
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
64. Refer to Brewer Corporation. Assume that weighted average process costing is used. What is the cost per equivalent unit for material?a. $0.55b. $1.05c. $1.31d. $1.83
ANS: DMaterial Costs:
Beginning $23,400Current Period 31,500
54,900 ÷ 30,000 units = $ 1.83
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 18
65. Refer to Brewer Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion?a. $3.44b. $4.24c. $5.71d. $7.03
ANS: BConversion Costs:
Beginning (Ignored for FIFO) $ -Current Period 76,956
$ 76,956Equivalent Units
Beginning Inventory (6,000 * 30%) 1,800Started and Completed (15,500) 15,500Ending Inventory (8,500 * 10%) 850
18,150 eq units
Cost per equivalent unit $ 4.24
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Collins Corporation
Collins Corporation. has the following information for May:
Beginning Work in Process Inventory(75% complete as to conversion) 7,500 units
Started 27,000 units
Ending Work in Process Inventory(15% complete as to conversion) 9,400 units
Beginning WIP Inventory Costs:Material $25,500
Conversion 52,725
Current Period Costs:Material $34,300
Conversion 80,845
All material is added at the start of the process and all finished products are transferred out.
66. Refer to Collins Corporation. How many units were transferred out in May?a. 17,600b. 19,500c. 25,100d. 27,000
Chapter 6 19
ANS: CBeginning Work in Process 7,500Add: Units Started 27,000Deduct: Units Transferred Out (25,100)Ending Work in Process 9,400
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
67. Refer to Collins Corporation. Assume that weighted average process costing is used. What is the cost per equivalent unit for material?a. $0.99b. $1.18c. $1.64d. $1.73
ANS: DMaterial Costs:
Beginning $25,500Current Period _34,300
$59,800 ÷ 34,500 units = $ 1.73
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
68. Refer to Collins Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion?a. $3.05b. $3.87c. $4.25d. $6.40
ANS: BConversion Costs:
Beginning (Ignored for FIFO) $ -Current Period 80,845
$ 80,845Equivalent Units
Beginning Inventory (7,500 * 25%) 1,875Started and Completed (17,600) 17,600Ending Inventory (9,400 * 15%) 1,410
20,885 equivalent units
Cost per equivalent unit ($80,845/20885) $ 3.87
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 20
Fantastic Decorations Corporation
The Fantastic Decorations Corporation makes wreaths in two departments: Forming and Decorating. Forming began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent complete as to conversion. During the month, 6,500 wreaths were started. At month end, Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion. Assume Forming uses the weighted average method of process costing. Costs in the Forming Department are as follows:
Beginning Work in Process Costs:Material $1,000
Conversion 1,500
Current Costs:Material $3,200
Conversion 5,045
The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent complete as to material and 90 percent complete as to conversion. The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion. Decorating uses the FIFO method of process costing, and costs associated with Decorating are:
Beginning WIP Inventory:Transferred In $1,170
Material 4,320
Conversion 6,210
Current Period:Transferred In ?
Material $67,745
Conversion 95,820
69. Refer to Fantastic Decorations Corporation. How many units were transferred to Decorating during the month?a. 600b. 4,900c. 5,950d. 7,000
ANS: BWreaths completed from BWIP 500Wreaths started and completed 4,400
4,900
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
70. Refer to Fantastic Decorations Corporation. What was the cost transferred out of Forming during the month?a. $5,341b. $6,419c. $8,245d. $8,330
Chapter 6 21
ANS: DUnits Transferred Out Cost per Eq. Unit Total
4,900 1.70 $8,330
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
71. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units as to costs in Decorating for the transferred-in cost component.a. 7,400b. 7,700c. 8,000d. 8,600
ANS: CThe transferred-in cost component is the 8,000 units that were transferred in.
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
72. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for material.a. 7,970b. 8,000c. 8,330d. 8,450
ANS: AMaterials: Decorating: FIFO Units % Complete Eqiv. UnitsBeginning Work in Process 600 20% 120+ Units Started and Completed 7,700 100% 7,700+ Ending Work in Process 300 50% 150Equivalent Units of Production 7,970
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
73. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for conversion.a. 7,925b. 7,985c. 8,360d. 8,465
Chapter 6 22
ANS: BConversion: Decorating: FIFO Units % Complete Equiv.
Units
Beginning Work in Process 600 10% 60
+ Units Started and Completed 7,700 100% 7,700
+ Ending Work in Process 300 75% 225Equivalent Units of Production 7,985
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
74. Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a total cost of $16,000. What is the material cost per equivalent unit in Decorating?a. $8.50b. $8.65c. $8.80d. $9.04
ANS: AWhen FIFO is used, consider only current costs.
Current Costs EquivUnits
Cost/Equiv Unit
$67,745 7,970 $8.50
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
75. Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a total cost of $16,000. What is the conversion cost per equivalent unit in Decorating?a. $11.32b. $11.46c. $12.00d. $12.78
ANS: CWhen FIFO is used, consider only current costs.
Current Costs EquivUnits
Cost/Equiv Unit
$95,820 7,985 $12.00
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 23
76. Refer to Fantastic Decorations Corporation. Assume the material cost per EUP is $8.00 and the conversion cost per EUP is $15 in Decorating. What is the cost of completing the units in beginning inventory?a. $ 960b. $ 1,380c. $ 1,860d. $11,940
ANS: CCosts to
Complete Beg Inv UnitsPercent toComplete
Cost per Unit Total
Materials 600 20% $8 $960Conversion 600 10% $15 $900Total Costs to Complete $1,860
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Four Seasons Company
Four Seasons Company adds material at the start to its production process and has the following information available for August:
Beginning Work in Process Inventory(40% complete as to conversion) 7,000 units
Started this period 32,000 unitsEnding Work in Process Inventory
(25% complete as to conversion) 2,500 unitsTransferred out ?
77. Refer to Four Seasons Company. Compute the number of units started and completed in August.a. 29,500b. 34,500c. 36,500d. 39,000
ANS: AUnits started this period 32,000Less: Ending Work in Process 2,500
Units started and completed this period 29,500
PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
78. Refer to Four Seasons Company. Calculate equivalent units of production for material using FIFO.a. 32,000b. 36,800c. 37,125d. 39,000
Chapter 6 24
ANS: AMaterials are added at the beginning of the process. 32,000 units were started in the current period; therefore there are 32,000 equivalent units for materials.
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
79. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using FIFO.a. 30,125b. 34,325c. 37,125d. 39,000
ANS: BEquivalent Units for Conversion
Beginning Inventory (7,000 * 60%) 4,200Started and Completed (29,500) 29,500Ending Inventory (2,500 * 25%) 625
34,325 eq. units
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
80. Refer to Four Seasons Company. Calculate equivalent units of production for material using weighted average.a. 32,000b. 34,325c. 37,125d. 39,000
ANS: DEquivalent Units--Materials
Beginning Inventory (7,000 units) 7,000Started this Period (32,000) 32,000
39,000 eq. units
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
81. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using weighted average.a. 34,325b. 37,125c. 38,375d. 39,925
ANS: BEquivalent Units--Conversion
Beginning Inventory (7,000 * 100%) 7,000Started and Completed (29,500) 29,500Ending Inventory (2,500 * 25%) 625
37,125 eq. units
Chapter 6 25
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Simpson Company
Simpson Company adds material at the start of production. The following production information is available for September:
Beginning Work in Process Inventory(45% complete as to conversion) 10,000 units
Started this period 120,000 unitsEnding Work in Process Inventory
(80% complete as to conversion) 8,200 units
Beginning Work in Process Inventory Costs:Material $24,500
Conversion 68,905
Current Period Costs:Material $ 75,600
Conversion 130,053
82. Refer to Simpson Company. How many units must be accounted for?a. 118,200b. 128,200c. 130,000d. 138,200
ANS: CBeginning Work in Process 10,000Units Started 120,000Total Units 130,000
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
83. Refer to Simpson Company. What is the total cost to account for?a. $ 93,405b. $205,653c. $274,558d. $299,058
ANS: DBWIP: Materials $ 24,500BWIP: Conversion 68,905Current Period: Materials 75,600Current Period: Conversion 130,053Total Costs $299,058
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 26
84. Refer to Simpson Company. How many units were started and completed in the period?a. 111,800b. 120,000c. 121,800d. 130,000
ANS: AUnits started this period 120,000Less: Ending Work in Process 8,200Units started and completed this period 111,800
PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
85. Refer to Simpson Company. What are the equivalent units for material using the weighted average method?a. 120,000b. 123,860c. 128,360d. 130,000
ANS: DEquivalent Units
Beginning Inventory (10,000 * 100%) 10,000Started and Completed (111,800) 111,800Ending Inventory (8,200 * 25%) 8,200
130,000 eq. units
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
86. Refer to Simpson Company. What are the equivalent units for material using the FIFO method?a. 111,800b. 120,000c. 125,500d. 130,000
ANS: BEquivalent Units
Beginning Inventory (Ignored for FIFO) 0Started and Completed (111,800) 111,800Ending Inventory (8,200 * 25%) 8,200
120,000 eq. units
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
87. Refer to Simpson Company. What are the equivalent units for conversion using the weighted average method?a. 120,000b. 123,440c. 128,360d. 130,000
Chapter 6 27
ANS: CBeginning Work in Process 10,000 45% 4,500+ Completion of Units in Process 10,000 55% 5,500+ Units Started and Completed 111,800 100% 111,800+ Ending Work in Process 8,200 80% 6,560Equivalent Units of Production 128,360
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
88. Refer to Simpson Company. What are the equivalent units for conversion using the FIFO method?a. 118,360b. 122,860c. 123,860d. 128,360
ANS: CBeginning Work in Process (ignored) 10,000 0% -+ Completion of Units in Process 10,000 55% 5,500+ Units Started and Completed 111,800 100% 111,800+ Ending Work in Process 8,200 80% 6,560Equivalent Units of Production 123,860
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
89. Refer to Simpson Company. What is the material cost per equivalent unit using the weighted average method?a. $.58b. $.62c. $.77d. $.82
ANS: CMaterial Costs:
Beginning $ 24,500Current Period 75,600
100,100 ÷ 130,000 units= $ 0.77 per unit
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
90. Refer to Simpson Company. What is the conversion cost per equivalent unit using the weighted average method?a. $1.01b. $1.05c. $1.55d. $1.61
Chapter 6 28
ANS: CConversion Costs:
Beginning $ 68,905Current Period 130,053
198,958 ÷ 128,360 units= $ 1.55 per unit
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
91. Refer to Simpson Company. What is the cost of units completed using the weighted average method?a. $237,510b. $266,742c. $278,400d. $282,576
ANS: DUnits Completed Costs per Equivalent Unit Total
121,800 (1.55 + .77) = $2.32 $282,576
PTS: 1 DIF: Difficult OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
92. Refer to Simpson Company. What is the conversion cost per equivalent unit using the FIFO method?a. $1.05b. $.95c. $1.61d. $1.55
ANS: AConversion Costs:
Beginning (Ignored)Current Period $130,053
$130,053 ÷ 123,860 units= $1.05 per unit
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
93. Refer to Simpson Company. What is the cost of all units transferred out using the FIFO method?a. $204,624b. $191,289c. $287,004d. $298,029
ANS: CBeginning Inventory10,000 units: Raw Materials (prior period) $24,500 Direct Labor (prior period 68,905 FOH (10,000 * .55 * $1.05) 5,775
$99,180Units Started and Completed111,800 units * $ (.63+1.05): $187,824 Total $287,004
Chapter 6 29
PTS: 1 DIF: Difficult OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Mercury Corporation
Beginning inventory (30% complete as to Material B and 60% complete for conversion)
700 units
Started this cycle 2,000 unitsEnding inventory (50% complete as to Material B and 80% complete for conversion)
500 units
Beginning inventory costs:Material A $14,270
Material B 5,950
Conversion 5,640
Current Period costs:Material A $40,000
Material B 70,000
Conversion 98,100
Material A is added at the start of production, while Material B is added uniformly throughout the process.
94. Refer to Mercury Corporation. Assuming a weighted average method of process costing, compute EUP units for Materials A and B.a. 2,700 and 2,280, respectivelyb. 2,700 and 2,450, respectivelyc. 2,000 and 2,240, respectivelyd. 2,240 and 2,700, respectively
ANS: BWeighted Average Material A Material BBeginning Work in Process 700 700Units Started and Completed 1,500 1,500Ending Work in Process 500 250
EUP Materials 2,700 2,450
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
95. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP units for Materials A and B.a. 2,700 and 2,280, respectivelyb. 2,700 and 2,450, respectivelyc. 2,000 and 2,240, respectivelyd. 2,450 and 2,880, respectively
ANS: CFIFO Material A Material BBeginning Work in Process 0 490Units Started and Completed 1,500 1,500Ending Work in Process 500 250 EUP Materials 2,000 2,240
Chapter 6 30
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
96. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute EUP for conversion.a. 2,600b. 2,180c. 2,000d. 2,700
ANS: AWeighted AverageBeginning Work in Process 700Units Started and Completed 1,500Ending Work in Process 400
2,600
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
97. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP for conversion.a. 2,240b. 2,180c. 2,280d. 2,700
ANS: BFIFOBeginning Work in Process (700 * 40%) 280Units Started and Completed 1,500Ending Work in Process (500 * 80%) 400
2,180
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
98. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per unit for Material A.a. $20.10b. $20.00c. $31.25d. $31.00
ANS: AWeighted Average: Material A
Beginning $ 14,270Current Period 40,000
54,270 ÷ 2,700 units= $ 20.10 per unit
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 31
99. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for Material A.a. $31.25b. $20.10c. $20.00d. $31.00
ANS: CMaterial A Costs(Current Period)
Equivalent Units Average Cost per EUP
$40,000 2,000 $20.00
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
100. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for Material B.a. $20.10b. $31.25c. $20.00d. $31.00
ANS: BMaterial B Costs(Current Period) Equivalent Units Average Cost per EUP
$70,000 2,240 $31.25
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
101. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per EUP for Material B.a. $20.00b. $31.25c. $20.10d. $31.00
ANS: DMaterial B Costs
(Beginning Inventory and Current Period) Equivalent Units Average Cost per EUP$75,950 2,450 $31.00
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
102. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for conversion.a. $45.50b. $45.00c. $43.03d. $47.59
Chapter 6 32
ANS: BConversion Costs(Current Period)
Equivalent Units Average Cost per EUP
$98,100 2,180 $45.00
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
103. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per EUP for conversion.a. $39.90b. $45.00c. $43.03d. $47.59
ANS: AConversion Costs
(Beginning WIP and Current Period) Equivalent Units Average Cost per EUP
$(98,100 + $5,640)=$103,640 2,600 $39.90
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Guthrie Corporation
The following information is available for Guthrie Corporation for the current year:
Beginning Work in Process Costs of Beginning Work in Process: (75% complete) 14,500 units Material $25,100
Started 75,000 units Conversion 50,000
Ending Work in Process Current Costs: (60% complete) 16,000 units Material $120,000
Abnormal spoilage 2,500 units Conversion 300,000
Normal spoilage (continuous)
5,000 units
Transferred out 66,000 units
All materials are added at the start of production.
104. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for material?a. 82,000b. 89,500c. 84,500d. 70,000
ANS: CMaterials: Weighted Average Units % Complete Eq. UnitsBeginning Work in Process 14,500 100% 14,500+ Units Started and Completed 51,500 100% 51,500+ Ending Work in Process 16,000 100% 16,000+ Abnormal Spoilage 2,500 100% 2,500
Equivalent Units of Production 84,500
Chapter 6 33
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
105. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for conversion costs?a. 80,600b. 78,100c. 83,100d. 75,600
ANS: BConversion: Weighted Average Units % Complete Eq UnitsBeginning Work in Process 14,500 100% 14,500+ Units Started and Completed 51,500 100% 51,500+ Ending Work in Process 16,000 60% 9,600+ Abnormal Spoilage 2,500 100% 2,500
Equivalent Units of Production 78,100
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
106. Refer to Guthrie Corporation. What is the cost per equivalent unit for material using weighted average?a. $1.72b. $1.62c. $1.77d. $2.07
ANS: AWeighted Average: Materials
Beginning $ 25,100Current Period 120,000
145,100 ÷ 84,500 units= $1.72 per unit
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
107. Refer to Guthrie Corporation. What is the cost per equivalent unit for conversion costs using weighted average?a. $4.62b. $4.21c. $4.48d. $4.34
ANS: CWeighted Average: Conversion
Beginning $ 50,000Current Period 300,000
$ 350,000 ÷ 78,100 units = $ 4.48 per unit
PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 34
108. Refer to Guthrie Corporation. What is the cost assigned to normal spoilage using weighted average?a. $31,000b. $15,500c. $30,850d. None of the responses are correct
ANS: DNo costs are assigned to normal, continuous spoilage. Higher costs are assigned to good units produced.
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
109. Refer to Guthrie Corporation. Assume that the cost per EUP for material and conversion are $1.75 and $4.55, respectively. What is the cost assigned to ending Work in Process?a. $100,800b. $87,430c. $103,180d. $71,680
ANS: DEquivalent
UnitsCost per
Equivalent Unit Total16,000 $1.75 $28,000 9,600 $4.55 $43,680
$71,680
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
110. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for material?a. 75,000b. 72,500c. 84,500d. 70,000
ANS: DMaterials: FIFOBeginning Work in Process - 0% -+ Units Started and Completed 51,500 100% 51,500+ Ending Work in Process 16,000 100% 16,000+ Abnormal Spoilage 2,500 100% 2,500
Equivalent Units of Production 70,000
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
111. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for conversion costs?a. 72,225b. 67,225c. 69,725d. 78,100
Chapter 6 35
ANS: BConversion: FIFOBeginning Work in Process 14,500 25% 3,625+ Units Started and Completed 51,500 100% 51,500+ Ending Work in Process 16,000 60% 9,600+ Abnormal Spoilage 2,500 100% 2,500
Equivalent Units of Production 67,225
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
112. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for material?a. $1.42b. $1.66c. $1.71d. $1.60
ANS: CFIFO: Materials
Current Period $ 120,000
120,000 ÷ 70,000 units = $1.71 per unit
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
113. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for conversion costs?a. $4.46b. $4.15c. $4.30d. $3.84
ANS: AFIFO: Conversion
Current Period $ 300,000
300,000 ÷ 67,225 units = $ 4.46 per unit
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
114. Refer to Guthrie Corporation. Assume that the FIFO EUP cost for material and conversion are $1.50 and $4.75, respectively. Using FIFO what is the total cost assigned to the units transferred out?a. $414,194b. $339,094c. $445,444d. $396,975
ANS: ATransferred Out Units: FIFO Equiv
UnitsCost per
Equiv UnitTotal
Beginning Work in Process 75,100+ Completion of Beginning Inventory (14,500 * 25%) 3,625 4.75 17,219+Units Started and Completed 51,500 6.25 321,875
Equivalent Units of Production 414,194
Chapter 6 36
PTS: 1 DIF: Difficult OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Crafton Corporation
Crafton Corporation has the following information for the current month:
Units started 100,000 unitsBeginning Work in Process: (35% complete) 20,000 unitsNormal spoilage (discrete) 3,500 unitsAbnormal spoilage 5,000 unitsEnding Work in Process: (70% complete) 14,500 unitsTransferred out 97,000 unitsBeginning Work in Process Costs:
Material $15,000
Conversion 10,000
All materials are added at the start of the production process. Crafton Corporation inspects goods at 75 percent completion as to conversion.
115. Refer to Crafton Corporation. What are equivalent units of production for material, assuming FIFO?a. 100,000b. 96,500c. 95,000d. 120,000
ANS: AMaterials: FIFOBeginning Work in Process - 0% -+ Units Started and Completed 77,000 100% 77,000+ Normal Spoilage--Discrete 3,500 100% 3,500+ Abnormal Spoilage 5,000 100% 5,000+ Ending Work in Process 14,500 100% 14,500
Equivalent Units of Production 100,000
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
116. Refer to Crafton Corporation. What are equivalent units of production for conversion costs, assuming FIFO?a. 108,900b. 103,900c. 108,650d. 106,525
ANS: DConversion: FIFOBeginning Work in Process 20,000 65% 13,000+ Units Started and Completed 77,000 100% 77,000+Normal Spoilage--Discrete 3,500 75% 2,625+ Abnormal Spoilage 5,000 75% 3,750+ Ending Work in Process 14,500 70% 10,150
Equivalent Units of Production 106,525
Chapter 6 37
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
117. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. What is the amount of the period cost for July using FIFO?a. $0b. $9,375c. $10,625d. $12,500
ANS: CAbnormal spoilage is a period cost.Materials 5,000 * $1.00/unit $5,000Conversion Costs 3,750 * $1.50/unit 5,625 Total Abnormal Spoilage $10,625
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
118. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest dollar)?a. $245,750b. $244,438c. $237,000d. $224,938
ANS: BTransferred Out Units: FIFOBeginning Work in Process $ 25,000+ Completion of Beginning Inventory (20,000 * 65%) 13,000 1.50 19,500+ Units Started and Completed 77,000 2.50 192,500+Normal Spoilage--Discrete-Materials 3,500 1.00 3,500+Normal Spoilage--Discrete-Conversion 2,625 1.50 3,938Equivalent Units of Production $244,438
PTS: 1 DIF: Difficult OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
119. Refer to Crafton Corporation. What are equivalent units of production for material assuming weighted average is used?a. 107,000b. 116,500c. 120,000d. 115,000
Chapter 6 38
ANS: CMaterials: Weighted AverageBeginning Work in Process 20,000 100% 20,000+ Units Started and Completed 77,000 100% 77,000+ Normal Spoilage--Discrete 3,500 100% 3,500+ Abnormal Spoilage 5,000 100% 5,000+ Ending Work in Process 14,500 100% 14,500
Equivalent Units of Production 120,000
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
120. Refer to Crafton Corporation. What are equivalent units of production for conversion costs assuming weighted average is used?a. 113,525b. 114,400c. 114,775d. 115,650
ANS: AConversion: Weighted AverageBeginning Work in Process 20,000 100% 20,000+ Units Started and Completed 77,000 100% 77,000+Normal Spoilage--Discrete 3,500 75% 2,625+ Abnormal Spoilage 5,000 75% 3,750+ Ending Work in Process 14,500 70% 10,150
Equivalent Units of Production 113,525
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
121. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned?
Value Assigned To
a. $7,438 Units transferred out and Ending Inventoryb. $7,438 Units transferred outc. $8,750 Units transferred out and Ending Inventoryd. $8,750 Units transferred out
ANS: B
Equivalent UnitsCost per
Equivalent Unit Total3,500 $1.00 $3,5002,625 $1.50 3,938
$7,438 This amount is transferred out.
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 39
122. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory?a. $29,725.00b. $37,162.50c. $38,475.00d. $36,250.00
ANS: AEnding Inventory: Weighted AverageMaterials 14,500 $1.00 $ 14,500.00Conversion (14,500 * 70%) 10,150 1.50 15,225.00
Total $ 29,725.00
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Knight Corporation
Knight Corporation has the following information for the current month:
Units started 95,000 unitsBeginning Work in Process: (30% complete) 15,000 unitsNormal spoilage (discrete) 3,000 unitsAbnormal spoilage 4,000 unitsEnding Work in Process: (75% complete) 15,000 unitsTransferred out 88,000 unitsBeginning Work in Process Costs:
Material $18,000
Conversion 14,000
All materials are added at the start of the production process. Knight Corporation inspects goods at 75 percent completion as to conversion.
123. Refer to Knight Corporation. What are equivalent units of production for material, assuming FIFO?a. 91,000b. 92,000c. 95,000d. 110,000
ANS: CMaterials: FIFOBeginning Work in Process - 0% -+ Units Started and Completed 73,000 100% 73,000+ Normal Spoilage--Discrete 3,000 100% 3,000+ Abnormal Spoilage 4,000 100% 4,000+ Ending Work in Process 15,000 100% 15,000
Equivalent Units of Production 95,000
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 40
124. Refer to Knight Corporation. What are equivalent units of production for conversion costs, assuming FIFO?a. 97,750b. 100,000c. 101,750d. 104,500
ANS: BConversion: FIFOBeginning Work in Process 15,000 70% 10,500+ Units Started and Completed 73,000 100% 73,000+Normal Spoilage--Discrete 3,000 75% 2,250+ Abnormal Spoilage 4,000 75% 3,000+ Ending Work in Process 15,000 75% 11,250
Equivalent Units of Production 100,000
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
125. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. What is the amount of the period cost for July using FIFO?a. $0b. $12,750c. $14,750d. $17,000
ANS: CAbnormal spoilage is a period cost.Materials 4,000 * $2.00/unit $ 8,000Conversion Costs 3,000 * $2.25/unit 6,750 Total Abnormal Spoilage $14,750
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
126. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest dollar)?a. $344,938b. $365,875c. $376,938d. $378,625
ANS: CTransferred Out Units: FIFOBeginning Work in Process $ 32,000+ Completion of Beginning Inventory (15,000 * 70%) 10,500 $2.25 23,625+ Units Started and Completed 73,000 4.25 310,250+Normal Spoilage--Discrete-Materials 3,000 2.00 6,000+Normal Spoilage--Discrete-Conversion (3,000 * 75%) 2,250 2.25 5,063Total Costs Assigned to Transferred Units $376,938
PTS: 1 DIF: Difficult OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 41
127. Refer to Knight Corporation. What are equivalent units of production for material assuming weighted average is used?a. 105,500b. 106,000c. 107,000d. 110,000
ANS: DMaterials: Weighted AverageBeginning Work in Process 15,000 100% 15,000+ Units Started and Completed 73,000 100% 73,000+ Normal Spoilage--Discrete 3,000 100% 3,000+ Abnormal Spoilage 4,000 100% 4,000+ Ending Work in Process 15,000 100% 15,000
Equivalent Units of Production 110,000
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
128. Refer to Knight Corporation. What are equivalent units of production for conversion costs assuming weighted average is used?a. 103,750b. 104,500c. 104,750d. 105,500
ANS: BConversion: Weighted AverageBeginning Work in Process 15,000 100% 15,000+ Units Started and Completed 73,000 100% 73,000+Normal Spoilage--Discrete 3,000 75% 2,250+ Abnormal Spoilage 4,000 75% 3,000+ Ending Work in Process 15,000 75% 11,250
Equivalent Units of Production 104,500
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
129. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned?
Value Assigned To
a. $11,063 Units transferred out and Ending Inventoryb. $11,063 Units transferred outc. $12,750 Units transferred out and Ending Inventoryd. $12,750 Units transferred out
Chapter 6 42
ANS: BEquivalent
UnitsCost per
Equivalent Unit Total3,000 $2.00 $6,0002,250 $2.25 5,063
$11,063 This amount is transferred out.
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
130. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory?a. $55,312.50b. $63,750.00c. $66,375.00d. $72,312.50
ANS: AEnding Inventory: Weighted AverageMaterials 15,000 $2.00 $ 30,000.00Conversion (15,000 * 75%) 11,250 2.25 25,312.50 Total $ 55,312.50
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapman Corporation
The following information is available for Chapman Corporation for the current month:
Started this month 80,000 unitsBeginning WIP
(40% complete) 7,500 unitsNormal spoilage (discrete) 1,100 unitsAbnormal spoilage 900 unitsEnding WIP
(70% complete) 13,000 unitsTransferred out 72,500 units
Beginning Work in Process Costs:Material $10,400
Conversion 13,800
Current Costs:Material $120,000
Conversion 350,000
All materials are added at the start of production and the inspection point is at the end of the process.
Chapter 6 43
131. Refer to Chapman Corporation. What are equivalent units of production for material using FIFO?a. 80,000b. 79,100c. 78,900d. 87,500
ANS: AMaterials: FIFO
Beginning Work in Process-
0% -+ Units Started and Completed 65,000 100% 65,000+ Ending Work in Process 13,000 100% 13,000+ Normal Spoilage (discrete) 1,100 100% 1,100+ Abnormal Spoilage 900 100% 900Equivalent Units of Production 80,000
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
132. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using FIFO?a. 79,700b. 79,500c. 81,100d. 80,600
ANS: DConversion: FIFO
Units% Complete
EUP
Beginning Work in Process 7,500 60% 4,500+ Units Started and Completed 65,000 100% 65,000+ Ending Work in Process 13,000 70% 9,100+ Normal Spoilage (discrete) 1,100 100% 1,100+ Abnormal Spoilage 900 100% 900
Equivalent Units of Production 80,600
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
133. Refer to Chapman Corporation. What are equivalent units of production for material using weighted average?a. 86,600b. 87,500c. 86,400d. 85,500
ANS: BMaterials: Weighted Average Units % Complete EUP
Beginning Work in Process 7,500 100% 7,500+ Units Started and Completed 65,000 100% 65,000+ Ending Work in Process 13,000 100% 13,000+ Normal Spoilage (discrete) 1,100 100% 1,100+ Abnormal Spoilage 900 100% 900
Equivalent Units of Production 87,500
Chapter 6 44
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
134. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using weighted average?a. 83,600b. 82,700c. 82,500d. 81,600
ANS: AConversion: FIFO Units % Complete EUP
Beginning Work in Process 7,500 100% 7,500+ Units Started and Completed 65,000 100% 65,000+ Ending Work in Process 13,000 70% 9,100+ Normal Spoilage (discrete) 1,100 100% 1,100+ Abnormal Spoilage 900 100% 900
Equivalent Units of Production 83,600
PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
135. Refer to Chapman Corporation. What is cost per equivalent unit for material using FIFO?a. $1.63b. $1.37c. $1.50d. $1.56
ANS: CFIFO: Materials
Current Period $ 120,000
$ 120,000 ÷ 80,000 units=
$ 1.50 per unit
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
136. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using FIFO?a. $4.00b. $4.19c. $4.34d. $4.38
ANS: CFIFO: Conversion
Current Period $ 350,000
$ 350,000 ÷ 80,600 units = $ 4.34 per unit
PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
Chapter 6 45
137. Refer to Chapman Corporation. What is cost per equivalent unit for material using weighted average?a. $1.49b. $1.63c. $1.56d. $1.44
ANS: AWeighted Average:Materials
Beginning $ 10,400Current Period 120,000
130,400 ÷ 87,500 units = $ 1.49 /unit
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
138. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using weighted average?a. $4.19b. $4.41c. $4.55d. $4.35
ANS: DWeighted Average:Conversion
Beginning $ 13,800Current Period 350,000
363,800 ÷ 83,600 units = $4.35 per unit
PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
139. Refer to Chapman Corporation. What is the cost assigned to ending inventory using FIFO?a. $75,920b. $58,994c. $56,420d. $53,144
ANS: BEnding Inventory: FIFOMaterials 13,000 $ 1.50 $ 19,500Conversion (13,000 * 70%) 9,100 4.34 39,494Total $ 58,994
PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
140. Refer to Chapman Corporation. What is the cost assigned to abnormal spoilage using FIFO?a. $1,350b. $3,906c. $5,256d. $6,424
Chapter 6 46
ANS: CAbnormal
Spoiled Units Price per Equivalent Unit Total900 $5.84 $5,256
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
141. Refer to Chapman Corporation. What is the cost assigned to normal spoilage and how is it classified using weighted average?a. $6,193 allocated between WIP and Transferred Outb. $6,424 allocated between WIP and Transferred Outc. $6,193 assigned to loss accountd. $6,424 assigned to units Transferred Out
ANS: DNormal
Spoiled Units Price per Equivalent Unit Total1,100 $5.84 $6,424 Transferred Out
PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting
142. Refer to Chapman Corporation. What is the total cost assigned to goods transferred out using weighted average?a. $435,080b. $429,824c. $428,656d. $423,400
ANS: BGoods Transferred Out/ Price per Eq Unit Total
73,600 $5.84 $429,824
PTS: 1 DIF: Difficult OBJ: 6-3 NAT: AACSB: Analytical SkillsLOC: AICPA Functional Competencies: Measurement, Reporting