Managerial Accounting

1

Following is a partial process cost summary for Mitchell Manufacturing’s Canning Department.

Equivalent Units of Production Direct Materials   Conversion  
Units Completed and transferred out     56,000         15,000    
Units in Ending Work in Process:                    
Direct Materials (15,000 * 100%)     15,000              
Conversion (15,000 * 70%)               10,500    
Equivalent Units of Production     71,000         66,500    
                     
Cost per Equivalent Unit                    
Costs of beginning work in process   $ 40,800       $ 60,100    
Costs incurred this period     136,900         184,300    
Total costs   $ 177,700       $ 244,400    
Cost per equivalent unit   $ 2.50 per EUP     $ 3.68 per EUP  
   

If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

 

· Finished Goods—Labeling $244,400; Finished Goods—Canning $244,400.

· 

Work in Process—Labeling $177,700; Finished Goods—Canning $177,700.

· 

Work in Process—Labeling $177,700; Work in Process—Canning $177,700.

· 

Work in Process—Labeling $140,000; Work in Process—Canning $140,000.

· 

Finished Goods $140,000; Work in Process $140,000.

 

2

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $63,000. Costs in beginning Work in Process – Conversion: $68,850. Costs incurred in February – Direct Materials: $420,600. Costs incurred in February – Conversion: $619,150. Calculate the cost per equivalent unit of materials.

 

· $2.36

· 

$1.99

· 

$1.63

· 

$2.05

· 

$2.63

 

 

3

At the beginning of the month, the Forming Department of Martin Manufacturing had 23,000 units in inventory, 40% complete as to materials, and 20% complete as to conversion. During the month the department started 73,000 units and transferred 81,500 units to the next manufacturing department. At the end of the month, the department had 14,500 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

· 83,900 materials; 85,600 conversion.

· 

93,100 materials; 90,200 conversion.

· 

83,900 materials; 90,200 conversion.

· 

70,100 materials; 67,200 conversion.

· 

68,400 materials; 77,600 conversion.

 

4

During March, the production department of a process operations system completed and transferred to finished goods 17,000 units that were in process at the beginning of March and 130,000 that were started and completed in March. March’s beginning inventory units were 100% complete with respect to materials and 57% complete with respect to conversion. At the end of March, 32,000 additional units were in process in the production department and were 100% complete with respect to materials and 26% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the FIFO method.

· 179,000 materials; 179,000 conversion.

· 

179,000 materials; 155,320 conversion.

· 

147,000 materials; 138,320 conversion.

· 

155,320 materials; 155,320 conversion.

· 

162,000 materials; 145,630 conversion.

 

 

5

 

A production department’s output for the most recent month consisted of 9,900 units completed and transferred to the next stage of production and 6,900 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

 

 

· 6,450 units.

· 

11,850 units.

· 

16,800 units.

· 

8,400 units.

· 

13,350 units.

6

At the beginning of the month, the Painting Department of Skye Manufacturing had 26,000 units in inventory, 70% complete as to materials, and 25% complete as to conversion. The cost of the beginning inventory, $34,650, consisted of $28,400 of material costs and $6,250 of conversion costs. During the month the department started 121,000 units and transferred 129,000 units to the next manufacturing department. Costs added in the current month consisted of $264,640 of materials costs and $517,130 of conversion costs. At the end of the month, the department had 18,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

 

· $2.21; $3.95.

· 

$2.48; $4.21.

· 

$1.91; $3.95.

· 

$2.21; $4.10.

· 

$2.15; $4.00.

7.

Wilturner Company incurs $77,000 of labor related directly to the product in the Assembly Department, $26,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $13,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor would include:

· Debit Work in Process Inventory $103,000; debit Factory Overhead $13,000.

· 

Debit Work in Process Inventory $116,000.

· 

Debit Work in Process Inventory $103,000; debit Wages Expense $13,000.

· 

Debit Work in Process Inventory $77,000; debit Factory Overhead $39,000.

· 

Debit Work in Process Inventory $77,000; debit Wages Expense $39,000.

8

A company’s beginning Work in Process inventory consisted of 30,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 106,000 units were started during the current period. Of those started, 70,000 were finished and the remaining 36,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

· 118,000.

· 

70,000.

· 

114,400.

· 

94,000.

· 

88,000.

9

At the beginning of the recent period, there were 960 units of product in a department, 35% completed. These units were finished and an additional 5,200 units were started and completed during the period. 880 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:

 

· 5,740 units.

· 

6,160 units.

· 

5,200 units.

· 

7,040 units.

· 

6,380 units.

10

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:   Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $63,000. Costs in beginning Work in Process – Conversion: $68,850. Costs incurred in February – Direct Materials: $307,000. Costs incurred in February – Conversion: $619,150. Calculate the equivalent units of materials.

 

· 150,000

· 

236,000

· 

206,000

· 

110,000

· 

154,800

11

Williams Company computed its cost per equivalent unit for direct materials to be $2.70 and its cost per equivalent unit for conversion to be $3.42. A total of 212,000 units of product were completed and transferred out as finished goods during the month, and 30,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

 

· $572,400.

· 

$183,600.

· 

$1,378,440.

· 

$102,600.

· 

$1,297,440.

12

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:   Units: Beginning Inventory: 38,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 123,000. Units completed and transferred out: 161,000. Ending Inventory: 36,500 units, 100% complete as to materials and 25% complete as to conversion.   Costs: Costs in beginning Work in Process – Direct Materials: $56,000. Costs in beginning Work in Process – Conversion: $61,850. Costs incurred in February – Direct Materials: $375,730. Costs incurred in February – Conversion: $612,150.   Calculate the cost per equivalent unit of conversion.

· $3.26

· 

$4.10

· 

$3.39

· 

$5.10

· 

$2.44

13

A company uses the weighted average method for inventory costing. At the beginning of a period the production department had 44,000 units in beginning Work in Process inventory which were 38% complete; the department completed and transferred 173,000 units. At the end of the period, 20,000 units were in the ending Work in Process inventory and are 73% complete. Compute the number of equivalent units produced by the department.

· 190,220.

· 

173,000.

· 

129,000.

· 

187,600.

· 

193,000.

14

A company’s beginning Work in Process inventory consisted of 35,000 units that were 90% complete with respect to direct labor. A total of 105,000 were finished during the period and 40,000 remaining in Work in Process inventory were 50% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

· 105,000.

· 

125,000.

· 

72,500.

· 

156,500

· 

98,000.

15

The following is an account for a production department, showing its costs for one month:

Work in Process Inventory
Beginning Balance 6,800 Completed and transferred out 53,610
Direct materials 23,000    
Direct labor 17,600    
Overhead 12,200    
Ending Balance 5,990    

Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $43,250, what was the cost of completing the units in the beginning Work in Process inventory?

· $37,260.

· 

$10,360.

· 

$16,350.

· 

$3,560.

· 

$59,600.

16

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 98,000 units, 80% complete as to materials and 20% complete as to conversion. Units started and completed: 268,000. Units completed and transferred out: 366,000. Ending Inventory: 39,000 units, 30% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $55,200. Costs in beginning Work in Process – Conversion: $97,700. Costs incurred in October – Direct Materials: $844,050. Costs incurred in October – Conversion: $1,105,390. Calculate the cost per equivalent unit of conversion.

 

· $2.70

· 

$3.42

· 

$4.12

· 

$3.14

· 

$2.93

17

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department:

       
Equivalent units of production—direct materials   125,000 EUP
Equivalent units of production—conversion   107,800 EUP
Costs in beginning Work in Process—direct materials $ 65,700  
Costs in beginning Work in Process—conversion $ 48,300  
Costs incurred in February—direct materials $ 555,500  
Costs incurred in February—conversion $ 697,800  
 

The cost per equivalent unit of production for direct materials is:

 

 

· $10.03

· 

$4.44

· 

$4.97

· 

$5.58

· 

$5.76

18

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. Calculate the equivalent units of production for the year:

       
Beginning Work in Process (30% complete, $3,100) 400 units  
Ending inventory of Work in Process (70% complete) 600 units  
Total units started during the year 5,200 units  
 

· 5,420 units.

· 

5,300 units.

· 

5,620 units.

· 

5,200 units.

· 

6,200 units.

19

A company uses the FIFO method for inventory costing. At the beginning of a period, the production department had 36,000 units in beginning Work in Process inventory which were 48% complete; the department completed and transferred 173,000 units. At the end of the period, 30,000 units were in the ending Work in Process inventory and are 83% complete. Compute the number of equivalent units produced by the department.

 

· 173,000.

· 

137,000.

· 

197,900.

· 

180,620.

· 

203,000.

20

During January, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units. At the end of January, 13,000 additional units were in process in the production department and were 45% complete with respect to labor. The beginning inventory included labor cost of $38,700 and the production department incurred direct labor cost of $307,100 during January. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

Multiple Choice

Top of Form

· 

$4.72.

· 

$4.43.

· 

$4.33.

· 

$4.88.

· 

$5.32.

Bottom of Form

21

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 93,000 units, 70% complete as to materials and 20% complete as to conversion. Units started and completed: 276,000. Units completed and transferred out: 369,000. Ending Inventory: 36,500 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $37,200. Costs in beginning Work in Process – Conversion: $79,700. Costs incurred in October – Direct Materials: $646,800. Costs incurred in October – Conversion: $919,300. Calculate the equivalent units of materials.

Multiple Choice

Top of Form

· 

318,500

· 

374,475

· 

355,875

· 

239,500

· 

383,600

Bottom of Form

22

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:   Units: Beginning Inventory: 38,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 136,000. Units completed and transferred out: 174,000. Ending Inventory: 36,500 units, 100% complete as to materials and 25% complete as to conversion.   Costs: Costs in beginning Work in Process – Direct Materials: $56,000. Costs in beginning Work in Process – Conversion: $61,850. Costs incurred in February – Direct Materials: $300,000. Costs incurred in February – Conversion: $612,150.   Calculate the equivalent units of conversion.

Multiple Choice

Top of Form

· 

183,125

· 

141,175

· 

99,500

· 

136,000

· 

210,500

Bottom of Form

23

During March, the production department of a process operations system completed and transferred to finished goods 20,000 units that were in process at the beginning of March and 170,000 units that were started and completed in March. March’s beginning inventory units were 100% complete with respect to materials and 65% complete with respect to labor. At the end of March, 37,000 additional units were in process in the production department and were 100% complete with respect to materials and 40% complete with respect to labor. The production department incurred direct materials cost of $255,000 and its beginning inventory included materials cost of $94,100. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Multiple Choice

Top of Form

· 

$2.05.

· 

$1.54.

· 

$1.50.

· 

$1.84.

· 

$1.37.

Bottom of Form

24

During March, the production department of a process operations system completed and transferred to finished goods 17,000 units that were in process at the beginning of March and 150,000 units that were started and completed in March. March’s beginning inventory units were 100% complete with respect to materials and 59% complete with respect to conversion. At the end of March, 34,000 additional units were in process in the production department and were 100% complete with respect to materials and 24% complete with respect to conversion. Compute the number of physical units transferred to finished goods.

Multiple Choice

Top of Form

· 

145,000.

· 

167,000.

· 

201,000.

· 

150,000.

· 

188,000.

Bottom of Form

25

Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Work in Process, May 1 (26,000 units, 100% complete for direct materials, 80% complete with respect to conversion costs; includes $71,000 of direct material cost; $34,270 of conversion costs).

     
Units started in May 180,000  
Units completed in May 152,000  
 

Work in Process, May 31 (54,000 units, 100% complete for direct materials; 70% complete for conversion costs).

Costs incurred in May      
Direct materials $ 342,500  
Conversion costs $ 353,450  
 

If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and conversion respectively for May.

Multiple Choice

Top of Form

· 

206,000 materials; 189,800 conversion.

· 

126,000 materials; 126,000 conversion.

· 

180,000 materials; 169,000 conversion.

· 

169,000 materials; 169,000 conversion.

· 

169,000 materials; 180,000 conversion.

Bottom of Form

26

During December, the production department of a process operations system completed and transferred to finished goods a total of 58,000 units of product. At the end of March, 15,000 additional units were in process in the production department and were 60% complete with respect to materials. The beginning inventory included materials cost of $60,400 and the production department incurred direct materials cost of $191,700 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Multiple Choice

Top of Form

· 

$4.35.

· 

$3.76.

· 

$3.31.

· 

$2.86.

· 

$3.45.

Bottom of Form

27

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is:

       
Direct materials used $  107,000  
Direct labor used $ 180,000  
Predetermined overhead rate (based on direct labor)   163 %
Goods transferred to finished goods $ 452,000  
Cost of goods sold $ 464,000  
Credit sales $ 1,010,000  
 

Multiple Choice

Top of Form

· 

Debit Factory Overhead $293,400; credit Cash $293,400.

· 

Debit Work in Process Inventory $293,400; credit Factory Overhead $293,400.

· 

Debit Work in Process Inventory $180,000; credit Factory Overhead $180,000.

· 

Debit Work in Process Inventory $180,000; credit Cash $180,000.

· 

Debit Work in Process Inventory $180,000; credit Factory Payroll $180,000.

Bottom of Form

28

During July, the production department of a process operations system completed and transferred to finished goods 29,000 units that were in process at the beginning of July and 68,000 that were started and completed in July. July’s beginning inventory units were 100% complete with respect to materials and 50% complete with respect to labor. At the end of July, 29,000 additional units were in process in the production department and were 100% complete with respect to materials and 55% complete with respect to labor. The beginning inventory included labor cost of $54,600 and the production department incurred direct labor cost of $453,350 during July. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

Multiple Choice

Top of Form

· 

$4.01.

· 

$4.50.

· 

$5.24.

· 

$.80.

· 

$1.88.

Bottom of Form

29

During November, the production department of a process operations system completed and transferred to finished goods 32,000 units that were in process at the beginning of November and 170,000 units that were started and completed in November. November’s beginning inventory units were 100% complete with respect to materials and 60% complete with respect to conversion. At the end of November, 29,000 additional units were in process in the production department and were 100% complete with respect to materials and 40% complete with respect to conversion. Compute the number of equivalent units with respect to materials for November using the weighted-average method.

Multiple Choice

Top of Form

· 

231,000.

· 

173,000.

· 

29,000.

· 

181,600.

· 

202,000.

Bottom of Form

30

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 99,000 units, 75% complete as to materials and 20% complete as to conversion. Units started and completed: 269,000. Units completed and transferred out: 368,000. Ending Inventory: 39,500 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $37,200. Costs in beginning Work in Process – Conversion: $79,700. Costs incurred in October – Direct Materials: $646,800. Costs incurred in October – Conversion: $919,300.   Calculate the equivalent units of conversion.

Multiple Choice

Top of Form

· 

413,425

· 

354,125

· 

324,400

· 

423,300

· 

269,000

Bottom of Form

31

Following is a partial process cost summary for Mitchell Manufacturing’s Canning Department.

Equivalent Units of Production Direct Materials   Conversion  
Units Completed and transferred out     72,000         72,000    
Units in Ending Work in Process:                    
Direct Materials (12,000 * 100%)     12,000              
Conversion (12,000 * 60%)               7,200    
Equivalent Units of Production     84,000         79,200    
                     
Cost per Equivalent Unit                    
Costs of beginning work in process   $ 43,200       $ 63,400    
Costs incurred this period     144,400         194,200    
Total costs   $ 187,600       $ 257,600    
Cost per equivalent unit   $ 2.23 per EUP     $ 3.25 per EUP  
   

The total conversion costs transferred out of the Canning Department equals:

Multiple Choice

Top of Form

· 

$187,600.

· 

$257,400.

· 

$257,600.

· 

$194,200.

· 

$234,000.

Bottom of Form

32

A company uses a process costing system. Its Assembly Department’s beginning inventory consisted of 53,200 units, 75% complete with respect to direct labor and overhead. The direct labor beginning inventory costs were $9,700. The department completed and transferred out 119,500 units this period. The ending inventory consists of 43,200 units that are 25% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $32,000 and overhead costs of $40,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

· $0.32.

· 

$0.44.

· 

$0.20.

· 

$0.37.

· 

$0.22.

33

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is:

       
Direct materials used $ 90,000  
Direct labor used $ 165,600  
Predetermined overhead rate (based on direct labor)   100 %
Goods transferred to finished goods $ 434,000  
Cost of goods sold $ 446,000  
Credit sales $ 813,600  
 

Multiple Choice

Top of Form

· 

Debit Accounts Receivable $813,600; credit Cost of Goods Sold $813,600.

· 

Debit Finished Goods Inventory $446,000; debit Sales $813,600; credit Accounts Receivable $813,600; credit Cost of Goods Sold $446,000.

· 

Debit Accounts Receivable $813,600; credit Sales $367,600; credit Finished Goods Inventory $446,000.

· 

Debit Accounts Receivable $813,600; credit Sales $813,600; debit Cost of Goods Sold $446,000; credit Finished Goods Inventory $446,000.

· 

Debit Cost of Goods Sold $446,000; credit Sales $446,000.

Bottom of Form

34

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

       
Beginning Work in Process (30% complete, $1,300) 220 units  
Ending inventory of Work in Process (70% complete) 420 units  
Total units started during the year 3,400 units  
   

Multiple Choice

Top of Form

· 

3,848 units.

· 

3,200 units.

· 

3,392 units.

· 

3,400 units.

· 

3,600 units.

Bottom of Form

35

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department:

       
Equivalent units of production—direct materials   113,000 EUP
Equivalent units of production—conversion   97,600 EUP
Costs in beginning Work in Process—direct materials $ 55,100  
Costs in beginning Work in Process—conversion $ 40,500  
Costs incurred in February—direct materials $ 465,800  
Costs incurred in February—conversion $ 585,100  
 

The cost per equivalent unit of production for conversion is:

Multiple Choice

Top of Form

· 

$5.54

· 

$5.34

· 

$10.77

· 

$5.99

· 

$6.41

Bottom of Form

36

Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $960 and sold them on credit to Percy Corporation for $1,395. The complete journal entry to be made by Wyman at the time of this sale is:

Multiple Choice

Top of Form

· 

Debit Cost of Goods Sold $1,395; credit Sales $1,395.

· 

Debit Accounts Receivable $1,395; debit Selling expense $960; credit Sales $1,395; credit Cost of Goods Sold $960.

· 

Debit Accounts Receivable $1,395; credit Sales $1,395; debit Cost of Goods Sold $960; credit Finished Goods Inventory $960.

· 

Debit Accounts Receivable $1,395; credit Sales $435; credit Finished Goods Inventory $960.

· 

Debit Finished Goods Inventory $960; debit Sales $1,395; credit Accounts Receivable $1,395; credit Cost of Goods Sold $960.

Bottom of Form

37

A company uses the weighted average method for inventory costing. At the start of a period the production department had 40,000 units in beginning Work in Process inventory which were 30% complete; the department completed and transferred 165,000 units. At the end of the period, 12,000 units were in the ending Work in Process inventory and are 65% complete. The production department had conversion costs in the beginning goods is process inventory of $87,000 and total conversion costs added during the period are $726,550. Compute the conversion cost per equivalent unit.

Multiple Choice

Top of Form

· 

$4.92.

· 

$4.35.

· 

$4.71.

· 

$4.56.

· 

$4.77.

Bottom of Form

38

Luker Corporation uses a process costing system. The company had $167,500 of beginning Finished Goods Inventory on October 1. It transferred in $844,000. of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $165,200. The entry to account for the cost of goods sold in October is:

Multiple Choice

Top of Form

· 

Debit Cost of Goods Sold $844,000; credit Finished Goods Inventory $844,000.

· 

Debit Finished Goods Inventory $165,200; credit Cost of Goods Sold $165,200.

· 

Debit Cost of Goods Sold $846,300; credit Work in Process Inventory $846,300.

· 

Debit Cost of Goods Sold $846,300; credit Finished Goods Inventory $846,300.

· 

Debit Finished Goods Inventory $844,000; credit Work in Process Inventory $844,000.

Bottom of Form

39

At the beginning of the month, the Painting Department of Skye Manufacturing had 25,000 units in inventory, 70% complete as to materials, and 20% complete as to conversion. During the month the department started 120,000 units and transferred 127,500 units to the next manufacturing department. At the end of the month, the department had 17,500 units in inventory, 40% complete as to materials and 15% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Painting Department.

Multiple Choice

Top of Form

· 

117,000 materials; 125,125 conversion.

· 

117,000 materials; 130,125 conversion.

· 

130,125 materials; 134,500 conversion.

· 

134,500 materials; 130,125 conversion.

· 

134,500 materials; 125,125 conversion.

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40

A company uses the weighted average method for inventory costing. During a period, Department B finished and transferred 64,000 units to Department C. Also in Department B during the period, 17,000 units were started but brought only to a stage of being 60% completed. The number of equivalent units produced by Department B during the period was:

Multiple Choice

Top of Form

· 

81,000 units.

· 

70,800 units.

· 

53,800 units.

· 

74,200 units.

· 

64,000 units.

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41

A company uses the weighted-average method for inventory costing. At the end of the period, 28,000 units were in the ending Work in Process inventory and are 100% complete for materials and 81% complete for conversion. The equivalent costs per unit are materials, $2.71, and conversion $2.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period.

Multiple Choice

Top of Form

· 

$205,156.

· 

$129,178.

· 

$190,739.

· 

$128,726.

· 

$235,480.

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42

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 83,000 units, 70% complete as to materials and 25% complete as to conversion. Units started and completed: 253,000. Units completed and transferred out: 336,000. Ending Inventory: 31,500 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $37,200. Costs in beginning Work in Process – Conversion: $79,700. Costs incurred in October – Direct Materials: $646,800. Costs incurred in October – Conversion: $919,300. Calculate the equivalent units of materials.

Multiple Choice

Top of Form

· 

349,900

· 

380,100

· 

253,000

· 

370,650

· 

290,500

Bottom of Form

 

43

During March, the production department of a process operations system completed and transferred to finished goods 30,000 units that were in process at the beginning of March and 120,000 that were started and completed in March. March’s beginning inventory units were 100% complete with respect to materials and 70% complete with respect to labor. At the end of March, 31,000 additional units were in process in the production department and were 100% complete with respect to materials and 70% complete with respect to labor. The production department incurred direct labor cost of $580,600 and its beginning inventory included labor cost of $56,200. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

Multiple Choice

Top of Form

· 

$4.84.

· 

$3.38.

· 

$3.87.

· 

$3.71.

· 

$4.25.

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44

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is:

       
Direct materials used $ 88,000  
Direct labor used   161,000  
Predetermined overhead rate (based on direct labor)   150 %
Goods transferred to finished goods   433,000  
Cost of goods sold   445,000  
Credit sales   811,000  
 

Multiple Choice

Top of Form

· 

Debit Work in Process Inventory $161,000; credit Factory Payroll Payable $161,000.

· 

Debit Cost of Goods Sold $161,000; credit Factory Payroll Payable $161,000.

· 

Debit Work in Process Inventory $161,000; credit Raw Materials Inventory $161,000.

· 

Debit Work in Process Inventory $161,000; credit Cash $161,000.

· 

Debit Factory Payroll Payable $161,000; credit Cash $161,000.

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45

Following is a partial process cost summary for Mitchell Manufacturing’s Canning Department.

Equivalent Units of Production Direct Materials   Conversion  
Units Completed and transferred out     72,000         72,000    
Units in Ending Work in Process:                    
Direct Materials (15,000 * 100%)     15,000              
Conversion (15,000 * 80%)               12,000    
Equivalent Units of Production     87,000         84,000    
                     
Cost per Equivalent Unit                    
Costs of beginning work in process   $ 43,500       $ 63,800    
Costs incurred this period     145,300         195,400    
Total costs   $ 188,800       $ 259,200    
Cost per equivalent unit   $ 2.17 per EUP     $ 3.09 per EUP  
   

The total materials costs transferred out of the Canning Department equals:

Multiple Choice

Top of Form

· 

$156,240.

· 

$188,800.

· 

$188,790.

· 

$222,480.

· 

$182,280.

Bottom of Form

 

46

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 90,000 units, 70% complete as to materials and 20% complete as to conversion. Units started and completed: 270,000. Units completed and transferred out: 360,000. Ending Inventory: 35,000 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $37,200. Costs in beginning Work in Process – Conversion: $79,700. Costs incurred in October – Direct Materials: $646,800. Costs incurred in October – Conversion: $919,300. Calculate the equivalent units of conversion.

Multiple Choice

Top of Form

· 

374,000

· 

235,000

· 

347,250

· 

365,250

· 

311,000

Bottom of Form

 

47

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 95,000 units, 70% complete as to materials and 20% complete as to conversion. Units started and completed: 280,000. Units completed and transferred out: 375,000. Ending Inventory: 37,500 units, 30% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $52,200. Costs in beginning Work in Process – Conversion: $94,700. Costs incurred in October – Direct Materials: $802,800. Costs incurred in October – Conversion: $1,091,050. Calculate the cost per equivalent unit of conversion.

Multiple Choice

Top of Form

· 

$3.13

· 

$3.40

· 

$3.03

· 

$2.95

· 

$2.94

Bottom of Form

48

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

       
Direct materials used $ 104,000  
Direct labor used   177,000  
Predetermined overhead rate (based on direct labor)   155 %
Goods transferred to finished goods   449,000  
Cost of goods sold   461,000  
Credit sales   827,000  
 

Multiple Choice

Top of Form

· 

Debit Work in Process Inventory $104,000; credit Raw Materials Inventory $104,000.

· 

Debit Cost of Goods Sold $104,000; credit Finished Goods Inventory $104,000.

· 

Debit Raw Materials Inventory $104,000; credit Finished Goods Inventory $104,000.

· 

Debit Work in Process Inventory $104,000; credit Cost of Goods Sold $104,000.

· 

Debit Raw Materials Inventory $104,000; credit Accounts Payable $104,000.

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49

Williams Company computed its cost per equivalent unit for direct materials to be $2.70 and its cost per equivalent unit for conversion to be $3.42. A total of 212,000 units of product were completed and transferred out as finished goods during the month. The ending Work in Process inventory consists of 30,000 equivalent units of direct materials and 30,000 equivalent units of conversion costs. The amount that should be reported in ending Work in Process Inventory is:

Multiple Choice

Top of Form

· 

$1,378,440.

· 

$1,297,440.

· 

$102,600.

· 

$183,600.

· 

$81,000.

 

Bottom of Form

50

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 41,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 126,000. Units completed and transferred out: 167,000. Ending Inventory: 38,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $59,000. Costs in beginning Work in Process – Conversion: $64,850. Costs incurred in February – Direct Materials: $394,600. Costs incurred in February – Conversion: $615,150. Calculate the cost per equivalent unit of materials.

Multiple Choice

Top of Form

· 

$2.81

· 

$1.59

· 

$3.13

· 

$2.41

· 

$1.92

Bottom of Form

 
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