Cost Accounting

COST ACCOUNTING & COST
CONCEPTS
Chapter 8: Process Costing
Accounting Demands Passion
Instructions: Write the letter that best corresponds to your answer. Do not write on the test
questions and return it after use. Thank you and GODBLESS!
1. If a company uses actual process costing, the amount transferred

from Work in Process Inventory to Finished Goods Inventory is the
cost of
a. equivalent unit production for the period.
b. units completed during the period.
c. units completed and sold during the period.
d. all units worked on during the period.
2. Howe has a FIFO EUP of 46,580 units. Beginning inventory of 6,500

units was 80% complete; the ending inventory of 2,800 units was
60% complete. Weighted-average EUP is
a. 46,580.
b. 47,880.
c. 51,780.
d. some other number.
3. Which of the following is(are) the same between the weighted average and FIFO methods of calculating
EUPs?
Units to EUP Total cost to

account for calculations account for
a. no yes no
b. yes yes yes
c. yes no no
d. yes no yes
ANS: D DIF: Easy OBJ: 6-3,6-4

4. Process costing techniques should be used in assigning costs to products
a. 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 DIF: Easy OBJ: 6-1
5. 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 DIF: Easy OBJ: 6-3

6. Dixie Company uses a weighted average process costing system. Material is added at the start of
production. Dixie 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 Dixie transferred out 11,750 units,
how many units were in ending Work in Process Inventory?
a. 1,250
b. 3,000
c. 3,500
d. 5,750
ANS: D
Cost Accounting: Chapter 7- Job Order Costing 1

Cost Accounting & Cost Concepts Cost Accounting & Cost Concepts Cost Accounting
Beginning Work in Process 4,500
Add: Units Started 13,000
Deduct: Units Transferred Out 11,750
Ending Work in Process 5,750
DIF: Easy OBJ: 6-2

Cherub Co.
Beginning inventory (30% complete as to Material B 700 units
and 60% complete for conversion)
Started this cycle 2,000 units
Ending inventory (50% complete as to Material B and 500 units
80% complete for conversion)
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.
7. Refer to Cherub Company. Assuming a weighted average method of process costing, compute EUP units
for Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,240 and 2,700, respectively
ANS: B
Weighted Average Material A Material B

Beginning Work in Process 700 700
Units Started and Completed 1500 1500
Ending Work in Process 500 250
EUP Materials 2700 2450
DIF: Easy OBJ: 6-2,6-3
8. Refer to Cherub Company Assuming a FIFO method of process costing, compute EUP units for Materials
A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,450 and 2,880, respectively
ANS: C
FIFO Material A Material B

Beginning Work in Process 0 490
Units Started and Completed 1500 1500
Ending Work in Process 500 250
EUP Materials 2000 2240
DIF: Moderate OBJ: 6-2,6-4
9. Refer to Cherub Company Assuming a weighted average method of process costing, compute EUP for
conversion.
a. 2,600
b. 2,180
c. 2,000

d. 2,700
ANS: A
Weighted Average
Beginning Work in Process 700
Units Started and Completed 1500
Ending Work in Process 400
2600
10. Refer to Cherub Company Assuming a FIFO method of process costing, compute EUP for conversion.
a. 2,240
b. 2,180
c. 2,280
d. 2,700
ANS: B
FIFO
Beginning Work in Process (700 * 40%) 280
Units Started and Completed 1500
Ending Work in Process (500 * 80%) 400
2180
11. Refer to Cherub Company Assuming a weighted average method of process costing, compute the average
cost per unit for Material A.
a. $20.10
b. $20.00
c. $31.25
d. $31.00
ANS: A
Weighted Average: Material A

Beginning $ 14,270
Current Period 40,000
54,270 ÷ 2,700 = $ 20.10
units per unit
12. Refer to Cherub Company Assuming a FIFO method of process costing, compute the average cost per EUP
for Material A.
a. $31.25
b. $20.10
c. $20.00
d. $31.00
ANS: C
Material A Costs Equivalent Average Cost

(Current Period) Units per EUP
$40,000 2,000 $20.00
for Material B.
a. $20.10
b. $31.25
c. $20.00
d. $31.00
ANS: B
Material B Costs Equivalent Average Cost

$70,000 2,240 $31.25
cost per EUP for Material B.
a. $20.00
b. $31.25
c. $20.10
d. $31.00
ANS: D
Material B Costs Equivalent Average Cost

(Beginning Units per EUP
Inventory and
Current Period)
$75,950 2,450 $31.00
for conversion.
a. $45.50
b. $45.00
c. $43.03
d. $47.59
ANS: B
Conversion Costs Equivalent Average Cost
$98,100 2,180 $45.00
cost per EUP for conversion.
a. $39.90
b. $45.00
c. $43.03
d. $47.59
ANS: A
Conversion Costs Equivalent Average Cost
(Beginning WIP Units per EUP
and Current Period)
$98,100 + $5,640 2,600 $39.90

17. Process costing would be used in all of the following industries except:
A. petroleum refining.
B. chemicals.
C. truck tire manufacturing.
D. wood pulp production.
E. automobile repair.
Answer: E LO: 1 Type: RC

18. Gregory, which uses a process-costing system, adds all material at the beginning of production and incurs
conversion cost evenly throughout manufacturing. The information that follows relates to the period just
ended:
Units started and completed: 75,000

Units in ending work-in-process inventory: 15,000, 60% complete
Which of the following choices correctly expresses the total equivalent units of production with respect to
material and conversion cost?
Material Conversion
A. 75,000 75,000
B. 84,000 84,000
C. 90,000 81,000
D. 90,000 84,000
E. 90,000 90,000
Answer: D LO: 3 Type: A

19. Majestic, which uses a process-costing system, adds material at the beginning of production and incurs
conversion cost evenly throughout manufacturing. The following selected information was taken from the
company's accounting records:
Total equivalent units of materials: 5,000

Total equivalent units of conversion: 4,400
Units started and completed during the period: 3,500
On the basis of this information, the ending work-in-process inventory's stage of completion is:
A. 40%.
B. 60%.
C. 70%.
D. 80%.
E. some other percentage not listed above.
Answer: B LO: 3 Type: A, N

20. Tulsa Corporation, which adds materials at the beginning of production, uses a weighted-average process-
costing system. Consider the data that follow.
Number of Units Cost of Materials

Beginning work in process 40,000 $ 80,600
Started in June 60,000 124,400
Production completed 75,000
Ending work in process 25,000
The company's cost per equivalent unit for materials is:

A. $1.24.
B. $1.66.
C. $1.67.
D. $2.05.
E. some other amount.

Use the following to answer questions 40-45:
South River Chemical manufactures a product called Zbek. Direct materials are added at the beginning of the
process, and conversion activity occurs uniformly throughout production. The beginning work-in-process
inventory is 60% complete with respect to conversion; the ending work-in-process inventory is 20% complete. The
following data pertain to May:
Units
Work in process, May 1 15,000
Units started during May 60,000
Units completed and transferred out 68,000
Work in process, May 31 7,000
Direct Conversion
Total Materials Costs
Costs:
Work in process, May 1 $ 41,250 $16,500 $ 24,750
Costs incurred during May 234,630 72,000 162,630
Totals $275,880 $88,500 $187,380

21. Using the weighted-average method of process costing, the equivalent units of direct materials total:
A. 68,000.
B. 69,400.
C. 74,000.
D. 75,000.
22. Using the weighted-average method of process costing, the equivalent units of conversion activity total:
A. 60,400.
B. 68,000.
C. 69,400.
D. 74,000.
Answer: C LO: 3 Type: A
23. Using the weighted-average method of process costing, the cost per unit of direct materials is:
A. $1.17.
B. $1.18.
C. $1.20.
D. $1.28.
Answer: B LO: 4 Type: A
24. Using the weighted-average method of process costing, the cost per unit of conversion activity is:
A. $2.50.
B. $2.53.
C. $2.70.
D. $2.76.
25. Using the weighted-average method of process costing, the cost of goods completed and transferred during
May is:
A. $249,560.
B. $250,240.
C. $258,400.
D. $263,840.
26. Using the weighted-average method of process costing, the total costs remaining in work in process on May
31 are:
A. $0.
B. $12,040.
C. $17,480.
D. $25,640.
Answer: B LO: 5 Type: A

Use the following to answer questions 46-47:
Chen Corporation, a new company, adds material at the beginning of its production process; conversion cost, in
contrast, is incurred evenly throughout manufacturing. During May, the firm completed 15,000 units and had
ending work in process of 2,000 units, 60% complete. Equivalent-unit costs were: materials, $15; conversion, $22.
27. The cost of Chen's completed production is:

A. $225,000.
B. $330,000.
C. $333,000.

D. $555,000.
28. The cost of the company's ending work-in-process inventory is:

A. $26,640.
B. $44,400.
C. $56,400.
D. $74,000.

29. Which of the following items is not a characteristic of a process cost system?
A. Once production begins, it continues until the finished product emerges
B. The products produced are heterogeneous in nature
C. The focus is on continually producing homogeneous products
D. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead
30. A process cost system would be used for all of the following products except
a. chemicals.
b. computer chips.
c. public accountant.
d. soft drinks.
Answer: c
Objective: 6
Section: Process cost systems
31. A process with no beginning work in process completed and transferred out 30 000 units during a
period and had 20 000 units in the ending work in process that were 30% complete. The
equivalent units of production for the period were
a. 30 000 equivalent units.
b. 50 000 equivalent units.
c. 36 000 equivalent units.
d. 15 000 equivalent units.
Answer: c
Objective: 10
32. Minor Company had the following department data:

Physical Units
Work in process, 1 July 8 000
Completed and transferred out 36 000
Work in process, 31 July 12 000
Materials are added at the beginning of the process. What is the total number of equivalent units
for materials in July?
a. 36 000
b. 40 000
c. 56 000
d. 48 000
Answer: d
Objective: 10

Use the following information to answer questions 25–27.
In the month of June, a department had 8000 units in beginning work in process that were 70% complete.
During June, 32 000 units were transferred into production from another department. At the end of June
there were 4000 units in ending work in process that were 40% complete. Materials are added at the
beginning of the process, while conversion costs are incurred uniformly throughout the process.
33. How many units were transferred out of the process in June?
a. 32 000 units
b. 28 000 units
c. 36 000 units
d. 40 000 units
Answer: c
Objective: 10
34. The equivalent units of production for materials for June were
Answer: b
Objective: 10
35. The equivalent units of production for conversion costs for June were
Answer: b
Objective: 10
36. With a process costing system the total units accounted for equals units in
a. ending work in process + units transferred out.
b. ending work in process – units started into production.
c. beginning work in process – units transferred out.
b. beginning work in process + ending work in process.
Answer: a
Objective: 11
37. A department had the following information for the month:

Total materials costs $90 000
Conversion cost per unit $3.00
Total manufacturing cost per unit $5.00
What are the equivalent units of production for materials?
a. 45 000
b. 30 000
c. 18 000
d. Cannot be determined

Answer: a
Objective: 11
Use the following information to answer questions 30-31.
Material costs of $320 000 and conversion costs of $408 000 were charged to a processing department in
the month of September. Materials are added at the beginning of the process, while conversion costs are
incurred uniformly throughout the process. There were no units in beginning work in process, 20 000
units were started into production in September, and there were 5000 units in ending work in process that
were 40% complete at the end of September.
38. What was the total amount of manufacturing costs assigned to those units that were completed and
transferred out of the process in September?
a. $600 000
b. $800 000
c. $642 600
d. $546 000
Answer: a
Objective: 11
39. What was the total amount of manufacturing costs assigned to the 5000 units in the ending work in
process?
a. $182 000
b. $200 000
c. $128 000
d. $80 000
Answer: c
Objective: 11
40. Reed Manufacturing has recently tried to improve its analysis for its manufacturing process. Units
started into production are 6000 and ending work in process is 400 units. Reed had no beginning
work in process inventory. Conversion costs are applied equally throughout production, and
materials are applied at the beginning of the process. How much is the materials cost per unit if
ending work in process was 25% complete and total materials cost is $60 000?
a. $10.00
b. $10.53
c. $37.50
d. $9.38
Answer: a
Objective: 11
41. In the production cost report, the total

a. physical units accounted for equals the costs accounted for.
b. physical units accounted for equals the units to be accounted for.
c. costs charged equal the units to be accounted for.
d. costs accounted for equals the costs of the units started into production.
Answer: b
Objective: 12
42. Sosa Inc. had $3,000 in beginning work in process and

incurred an additional $28,500 during the period. If weighted-
average EUP was 10,000 units, unit cost would be
a. $2.85.
b. $3.15.
c. $9.50.
43. Field Company had a beginning inventory of 2,000 units 40%

complete, ending inventory of 1,500 units 70% complete, and
transferred out 23,500 units. Weighted-average unit costs were
$1.15 for materials, $0.75 for conversion costs. All materials
are added at the start of the process. The cost of finished units
transferred to finished goods is
a. $28,750.
b. $44,650.
c. $47,500.
d. $52,250.
44. Field Company had a beginning inventory of 4,000 units 40%

are added at the start of the process. The cost of ending
inventory is
a. $5,700.
b. $5,025
c. $3,990.
45. Garden Co. had a beginning inventory of 3,000 units 60%

transferred out 27,500 units. FIFO unit costs were $2.15 for
materials, $1.25 for conversion costs. All materials are added at
the start of the process. Beginning inventory cost $9,400. The
cost of finished units transferred out is
a. $69,875.
b. $92,900.
c. $93,500.
d. $103,700.
46. Garden Co. had a beginning inventory of 3,000 units 60%

transferred out 27,500 units. FIFO unit costs were $2.15 for
materials, $1.25 for conversion costs. All materials are added at
the start of the process. Beginning inventory cost $9,400. The
cost of ending inventory is
a. $8,160.
b. $9,450.
c. $10,200.
d. $17,000.
47. Woods Run has a weighted-average EUP of 49,750 units.

Beginning inventory of 4,500 units was 60% complete; the ending
inventory of 4,800 units was 60% complete. The units completed
during the period is
a. 49,750.
b. 44,950.
Cost Accounting: Chapter 7- Job Order Costing
10
c. 47,050.
d. 46,870.
48. Woods Run has a weighted-average EUP of 49,750 units.

Beginning inventory of 4,500 units was 60% complete; the ending
inventory of 4,800 units was 60% complete. Conversion costs in
beginning inventory were $1,960; conversion costs added during
the period were $40,825. Conversion costs per unit are
a. $0.82.
b. $0.86.
c. $0.70.
d. cannot be determined with the information given.
49. Grover Co. had a beginning inventory of 1,750 units 70%

are added at the start of the process. The cost of finished units
transferred to finished goods is
a. $95,550.
b. $102,375.
c. $107,250.
d. $114,075.
50. Grover Co. had a beginning inventory of 1,750 units 70%

are added at the start of the process. The cost of ending
inventory is
a. $2,340.
b. $6,450.
c. $7,500.
d. $11,700.
END OF THE EXAMINATION!
Cost Accounting: Chapter 7- Job Order Costing

11

Cost Accounting

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COST ACCOUNTING & COST

1. If a company uses actual process costing, the amount transferred

2. Howe has a FIFO EUP of 46,580 units. Beginning inventory of 6,500

Units to EUP Total cost to

ANS: D DIF: Easy OBJ: 6-3,6-4

Calculates EUPs Assigns costs to inventories

ANS: C DIF: Easy OBJ: 6-3

Cost Accounting: Chapter 7- Job Order Costing 1

DIF: Easy OBJ: 6-2

Beginning inventory costs:

Current Period costs:

Weighted Average Material A Material B

DIF: Easy OBJ: 6-2,6-3

FIFO Material A Material B

DIF: Moderate OBJ: 6-2,6-4

Cost Accounting: Chapter 7- Job Order Costing 2

DIF: Moderate OBJ: 6-2,6-3

DIF: Moderate OBJ: 6-2,6-4

Weighted Average: Material A

DIF: Moderate OBJ: 6-2,6-3

Material A Costs Equivalent Average Cost

DIF: Moderate OBJ: 6-2,6-4

Material B Costs Equivalent Average Cost

DIF: Moderate OBJ: 6-2,6-4

Material B Costs Equivalent Average Cost

DIF: Moderate OBJ: 6-2,6-3

DIF: Moderate OBJ: 6-2,6-4

DIF: Moderate OBJ: 6-2,6-3

Answer: E LO: 1 Type: RC

Units started and completed: 75,000

Answer: D LO: 3 Type: A

Total equivalent units of materials: 5,000

Answer: B LO: 3 Type: A, N

Number of Units Cost of Materials

The company's cost per equivalent unit for materials is:

Answer: D LO: 4 Type: A

Cost Accounting: Chapter 7- Job Order Costing 5

Answer: D LO: 3 Type: A

Answer: C LO: 3 Type: A

Answer: B LO: 4 Type: A

Answer: C LO: 4 Type: A

Answer: D LO: 5 Type: A

Answer: B LO: 5 Type: A

27. The cost of Chen's completed production is:

Cost Accounting: Chapter 7- Job Order Costing 6

Answer: D LO: 5 Type: A

28. The cost of the company's ending work-in-process inventory is:

Answer: C LO: 5 Type: A

32. Minor Company had the following department data:

Cost Accounting: Chapter 7- Job Order Costing 7

37. A department had the following information for the month:

Cost Accounting: Chapter 7- Job Order Costing 8

Use the following information to answer questions 30-31.

41. In the production cost report, the total

42. Sosa Inc. had $3,000 in beginning work in process and

43. Field Company had a beginning inventory of 2,000 units 40%

44. Field Company had a beginning inventory of 4,000 units 40%

45. Garden Co. had a beginning inventory of 3,000 units 60%

46. Garden Co. had a beginning inventory of 3,000 units 60%

47. Woods Run has a weighted-average EUP of 49,750 units.

48. Woods Run has a weighted-average EUP of 49,750 units.

49. Grover Co. had a beginning inventory of 1,750 units 70%