6 2014 Questions and Answers - Compress

CHAPTER 6—PROCESS COST ACCOUNTING--ADDITIONAL PROCEDURES
MULTIPLE CHOICE
1. The following information is available for the month of April from the First department of
the Armque Corporation:
Units
Work in process, April 1 (50% complete) 90,000
Started in April 250,000
Transferred to Second Department in April 280,000
Materials are added in the beginning of the process in the First department. Using the
average cost method, what are the equivalent units of production for the month of April?
Materials Conversion
a. 310,000 250,000
b. 250,000 295,000
c. 340,000 316,000
d. 340,000 304,000
Equivalent production:
Materials:
Finished and transferred during month 280,000
Equivalent units of work in process, end of month (60,000 units, 40%
completed, all materials) 60,000
Total 340,000
Labor and factory overhead:
Finished and transferred during April 280,000
Work in process, end of April (60,000 units, 40% completed) 24,000
Total 304,000
2. The following information is available for the month of August from the First department
of the Twigg Corporation:
Units
Work in process, August 1 (60% complete) 50,000
Started in August 190,000
Materials are added in the beginning of the process in the First department. Using the
average cost method, what are the equivalent units of production for the month of August?
a. 192,000 240,000
b. 190,000 192,000
c. 240,000 208,000
d. 240,000 192,000
Work in process, August 1 50,000

Total processed during August 240,000
Finished and transferred during August 160,000
Materials:
Total 240,000
Work in process, end of August (80,000 units, 40% completed) 32,000
Total 192,000
3. Information concerning Department A of Ali Company for the month of June is as follows:
Units Materials Costs
Work in process, beginning of month 20,000 $14,550

Started in June 85,000 $66,300
Units completed 90,000
Work in process, end of month 15,000
All materials are added at the beginning of the process. Using the average cost method, the
cost (rounded to two places) per equivalent unit for materials for June is:
a. $0.74.
b. $0.90.
c. $0.77. ($80,850 / 105,000 units = cost per equivalent unit $ .77)
d. $0.78.
Units completed during June 90,000
Units in process, June 30 with all materials 15,000
Equivalent production for materials 105,000
Materials cost:
Work in process, beginning of June $14,550
Added during June 66,300
Total materials cost $80,850
4. Plemmon Company adds materials at the beginning of the process in the forming
department, which is the first of two stages of its production cycle. Information concerning
the materials used in the forming department in April follows:
Units Materials Costs

Work in process at April 1 15,000 $ 8,000
Units started during April 60,000 $38,500
Units completed and transferred to next department
during April 65,000
Using the average cost method, what is the materials cost of the work in process at April 30
(rounded to nearest dollar)?
a. $7,154
b. $6,200
c. $7,750
d. $6,417
Units
Beginning work in process 15,000
Started 60,000
Total 75,000
Less completed 65,000
Ending work in process (complete as to material) 10,000
Unit cost (See calculation below) $ .62
Materials cost in ending work in process $ 6,200
Units completed during April 65,000

Units in process, April 30 with all materials 10,000
Materials cost:
Work in process, April 1 $ 8,000
Costs added during April 38,500
Total materials cost for period $46,500
$38,500 / 60,000 units = cost per equivalent unit $ .62

Units
Materials are added at the end of the process in the First department. Using the average cost
method, what are the equivalent units of production for the month of April?
a. 304,000 250,000
b. 280,000 295,000
c. 340,000 316,000
d. 280,000 304,000
Materials:
completed, no materials) 0
Total 280,000
Finished and transferred during April 280,000
Total 304,000
6. The following information is available for the month of August from the First department
of the Twigg Corporation:
Units
Materials are added at the end of the process in the First department. Using the average cost
method, what are the equivalent units of production for the month of August?
a. 192,000 160,000
b. 160,000 192,000
c. 160,000 208,000
d. 240,000 192,000

Total processed during August 240,000
Materials:
Total 160,000
Work in process, end of August (80,000 units, 40% completed) 32,000
Total 192,000
7. During June, Birch Bay Company's Department B equivalent unit product costs computed
under the average cost method were as follows:
Materials $2
Conversion $3
Transferred-in $5
Materials are introduced at the end of the process in Department B. There were 4,000 units
(60 % complete as to conversion costs) in work in process at June 30. The total costs assigned
to the June 30 work in process inventory should be:
a. $20,000.
b. $24,800.
c. $27,200.
d. $35,200.
Transferred-in costs:
4,000 units @ $5 $20,000
Conversion costs:
4,000 units (60% complete) @ $3 7,200
$27,200
Because materials are introduced at the end of the process, no materials cost would be
included in the ending work in process.
8. Van Pelt Company uses the average cost method of process costing. The production report
for the Mixing department follows:
In process, beginning of period 1,000 units

800 units - materials 50% complete; conversion costs 40% complete
Placed in process during period 5,000 units
Transferred to packing department 4,800 units
In process, end of period 1,200 units
What are the equivalent units for:
Materials Conversion Costs

a. 5,650 5,450
b. 5,450 5,250
c. 4,850 4,400
d. 5,400 5,220
Material Conversion Costs

Completed and transferred to packing department 4,800 4,800
Ending work-in-process:
700 x 75% - Material 525
700 x 50% - Conversion costs 350
500 x 25% - Material 125

500 x 20% - Conversion costs 100
5,450 5,250
9. Normal losses that occur in the manufacturing process are properly classified as:
a. Extraordinary items.
b. Product costs.
c. Period costs.
d. Deferred charges.
Normal losses are properly classified as product costs and considered as part of the total cost
of production.
10. Stanley Company adds materials at the beginning of the process in Department M. Data
concerning the materials used in the March production follows:
Units
Work in process at March 1 15,000
Started during March 38,000
Completed and transferred to next department during March 37,000
Normal spoilage incurred 2,000
Work in process at March 31 14,000
Using the average cost method, the equivalent units for the materials unit cost calculation
are:
a. 38,000.
b. 51,000.
c. 55,000.
d. 37,000.
Units completed and transferred 37,000

Ending work in process with all materials 14,000
51,000
11. Materials are added at the start of the process in McKay Company's blending department,
the first stage of the production cycle. The following information is available for the month
of July:
Units
Work in process, July 1 (60% complete as to conversion costs) 50,000
Started in July 200,000
Transferred to the next department 195,000
Lost in production 15,000
Work in process, July 31 (50% complete as to conversion costs) 40,000
Under McKay's cost accounting system, the costs incurred on the lost units are absorbed by
the remaining good units. Using the average cost method, what are the equivalent units for
the materials unit cost calculation?
a. 210,000
b. 195,000
c. 250,000
d. 235,000
Units completed and transferred 195,000

Ending work in process with all materials 40,000
235,000
12. In a process cost system, the cost attributable to abnormal losses that occur due to
unexpected circumstances such as machine operator error should be assigned to:
a. Ending work in process inventory.
b. Cost of goods manufactured and ending work in process inventory in the ratio of units
worked on during the period to units remaining in work in process inventory.
c. A separate loss account in order to highlight production inefficiencies
d. Cost of good manufactured (transferred out)
Losses from abnormal spoilage should be assigned to a separate account. These should be
treated as a period cost.
13. If the amount of loss in a manufacturing process is abnormal, it should be classified as a:

a. Period cost.
b. Deferred charge.
c. Joint cost.
d. Product cost.
Abnormal loss should be classified as a period cost (charged to expense of the current period
and reflected separately on the income statement).
14. What losses should not affect the recorded cost of inventories?
a. Normal losses
b. Abnormal losses
c. Seasonal losses
d. Standard losses
Abnormal losses should not affect the recorded cost of inventories because they are charged
off as a period cost rather than being included in the cost of manufactured goods.
15. In a process cost system, how is the unit cost affected in a production cost report when
materials are added in a department subsequent to the first department and the added
materials result in additional units?
a. It causes an increase in the preceding department's unit cost that necessitates an
adjustment of the transferred-in unit cost.
b. It causes a decrease in the preceding department's unit cost that necessitates an
c. It causes an increase in the preceding department's unit cost but does not necessitate an
d. It causes a decrease in the preceding department's unit cost but does not necessitate an
If added materials result in additional units, it causes a decrease in the preceding

department's unit cost and necessitates an adjustment of the transferred-in cost because
there are more units over which to spread this cost.
16. Boyce Company manufactures chemicals. Chemical agent ABX is refined in the Refining
department and, after it is transferred to the Mixing department, a reactive agent is added to
it. In May, 25,000 gallons of ABX having a cost of $100,000 were transferred from the refining
to the Mixing department where 15,000 gallons of the reactive agent were added. When
calculating the inventory costs in the Mixing department, what will the cost per unit relating
to gallons transferred in from the Refining department be?
a. $4.00
b. $2.50
c. $3.75
d. $6.67
Gallons transferred in from the Refining Department 25,000

Additional gallons of reactive agent added in Mixing 15,000
Total gallons 40,000
Cost of ABX - $100,000 / 40,000 gallons = $2.50
17. In order to compute equivalent units of production using the FIFO method of process
costing, work for the period must be broken down to units:
a. Completed from beginning inventory, started and completed during the month, and
units in ending inventory.
b. Completed during the period and units 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.
18. Material is added at the beginning of a process in a process costing system. The
beginning work in process inventory for this process this period was 30 percent complete as to
conversion costs. Using the first-in, first-out method of costing, the total equivalent units for
material for this process during this period are equal to the:
a. Units started this period in this process.

b. Beginning inventory this period for this process.
c. Units started this period in this process plus the beginning inventory.
d. Units started this period in this process plus 70 percent of the beginning inventory.
With the FIFO method of costing, equivalent units for materials would be the units started in
process this period because the beginning work in process would have been complete as to
materials. The proof follows:
Beginning work in process, 20% completed 5,000

Units started 25,000
30,000
Units transferred out 22,000
Ending work in process 8,000

Units started and completed (25,000 started less 8,000 remaining in ending work in process
17,000
Ending work in process 8,000
Equivalent units of material:

Needed to complete beginning work in process 0
Started and completed (17,000 x 100%) 17,000
Ending work in process (8,000 x 100%) 8,000
Equivalent units of material 25,000
.
19. Under which of the following conditions will the first-in, first-out method of process
costing produce the same cost of goods manufactured amount as the average cost method?
a. When goods produced are homogeneous in nature
b. When there is no beginning inventory
c. When there is no ending inventory
d. When beginning and ending inventories are each 50 percent complete
When there is no beginning inventory, the FIFO method and the average cost method will
both produce the same cost of goods manufactured amount because equivalent production
and unit costs will be the same.
20. The average cost method of process costing differs from the FIFO method of process
costing in that the average cost method:
a. Requires that ending work in process inventory be stated in terms of equivalent units of
production.
b. Can be used under any cost-flow assumption.
c. Does not consider the degree of completion of beginning work in process inventory
when computing equivalent units of production.
d. Considers the ending work in process inventory only partially complete.
The average cost method of process costing does not consider the degree of completion of
beginning work in process inventory when computing equivalent units of production, while the
FIFO method does.
21. Regina Manufacturing uses the FIFO method of process costing. The production report for
the Curing Department, where the materials are added at the beginning of the period, for
September was as follows:
In process, beginning of the period 3,000 units

Stage of completion 30 %
Transferred to stockroom during period 12,000 units
In process, end of the period 6,000 units
The number of units started and completed during the period was:
a. 12,000
b. 9,000
c. 15,000
d. 6,000
Units finished during the period 12,000

Less units in process at beginning of period 3,000
Units started and completed during period 9,000
22. Regina Manufacturing uses the FIFO method of process costing. The production report for
the Curing Department, where the materials are added at the beginning of the period, for
September was as follows:
In process, beginning of the period 3,000 units

Transferred to stockroom during period 12,000 units

In process, end of the period 6,000 units
The number of equivalent units for conversion costs during the period was:
a. 13,500
b. 16,500
c. 12,300
d. 14,700
Units finished during the period 12,000

Less units in process at beginning of period 3,000
Units started and completed during period 9,000
Needed to finish beginning work in process

(3,000 x 70%)
2,100
Started and completed during period 9,000
Ending work in process (6,000 x 40%) 2,400
Equivalent units for conversion costs 13,500
Units
Materials are added in the beginning of the process in the First department. Using the first-
in, first-out method, what are the equivalent units of production for the month of April?
a. 250,000 259,000
b. 340,000 259,000
c. 280,000 271,000
d. 250,000 271,000
Materials:
To complete beginning units in process (materials were 100% complete) 0
Units started and finished during the month (250,000 started - 60,000 in ending WIP)
190,000
Total 250,000
To complete beginning units in process (conversion costs were 50% complete) 45,000
190,000
Total 259,000
24. Information concerning Department A of Ali Company for the month of June is as follows:
Units Materials
Costs
Work in process, beginning of month 20,000 $14,550

Started in June 85,000 $66,300
Units completed 90,000
Work in process, end of month 15,000
All materials are added at the beginning of the process. Using the first-in, first-out method,
the cost (rounded to two places) per equivalent unit for materials for June is:
a. $0.63.
b. $0.90.
c. $0.77.
d. $0.78.
To complete beginning units in process (all had 100% of materials) 0

Units started and completed during the month (85,000 started - 15,000 in ending WIP) 70,000
Equivalent production for materials in period 85,000
Materials cost:
Added during June $66,300
Units Materials
Costs
during April
65,000
Using the FIFO method, what is the materials cost of the work in process at April 30 (rounded
to nearest dollar)?
a. $7,154
b. $6,200
c. $7,750
d. $6,417
Units
Started 60,000
Total 75,000
To complete beginning in process units (materials all 100%) 0
Units started and finished during month (60,000 started - 10,000 in ending WIP) 50,000
Materials cost:
Costs added during June $38,500
Units
Materials are added at the end of the process in the First department. Using the first-in,
first-out method, what are the equivalent units of production for the month of April?
a. 250,000 259,000
b. 280,000 259,000
c. 340,000 271,000
d. 280,000 271,000
Materials:
To complete beginning units in process (materials were 0% complete) 90,000
190,000
Total 280,000
190,000
Total 259,000
27. During June, Birch Bay Company's Department B equivalent unit product costs computed
under the FIFO method were as follows:
Materials $2
Conversion $3
Transferred-in $5
Materials are introduced at the end of the process in Department B. There were 4,000 units
(60 % complete as to conversion costs) in work in process at June 30. The total costs assigned
to the June 30 work in process inventory should be:
a. $20,000.
b. $24,800.
c. $27,200.
d. $35,200.
Transferred-in costs:
4,000 units @ $5 $20,000
Conversion costs:
4,000 units (60% complete) @ $3 7,200
$27,200
Because materials are introduced at the end of the process, no materials cost would be
included in the ending work in process.
28. When two products are produced during a common process, what is the factor that
determines whether the products are joint products or one principal product and a by-
product?
a. Potential marketability for each product
b. Amount of work expended in the production of each product
c. Management policy
d. Relative total sales value
The relative total sales value is the determining factor in deciding whether a product is a
joint product or a by-product. Products with relatively little value are by-products.
29. If two or more products share a common process before they are separated, the joint
costs should be allocated in a manner that:
a. Assigns a proportionate amount of the total cost to each product by means of a
quantitative basis.
b. Maximizes total earnings.
c. Minimizes variations in a unit of production cost.
d. Does not introduce an element of estimation into the process of accumulating costs for
each product.
An allocation method is usually selected that will assign a portion of a given total cost to each
of the products that are sharing a physical part of the total item. A quantitative method is
chosen that will least affect the gross profit percentage differences among these products.
30. Each of the following is a method by which to allocate joint costs except:
a. Chemical or engineering analysis.
b. Relative sales value.
c. Relative weight, volume, or linear measure.
d. Relative marketing costs.
Joint costs would not be allocated according to relative marketing costs because marketing
costs are not necessarily incurred directly in proportion to production costs.
31. Joint costs are commonly allocated based upon relative:

a. Sales value.
b. Marketing costs.
c. Conversion costs.
d. Prime costs.
Joint costs are commonly allocated based upon relative sales value. Profitability, conversion
costs, and prime costs do not necessarily have a direct relationship to production costs.
32. Budde Chemicals produces two industrial chemical compounds, X15 and Z24, from the
same process, which last year, cost $300,000. Budde produced 15,000 gallons of X15, which
sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. Using the
relative sales method, how much of the joint cost should be allocated to X15?
a. $100,000
b. $200,000
c. $60,000
d. $75,000
Product Gallons Selling price Ultimate sales value Percent sales value Assignment of
join costs
X15 15,000 $40 $ 400,000 33.3% $100,000
Z24 45,000 $20 800,000 66.7% 200,000
$1,200,000 $300,000
33. If a company produces two products, A and B, from a joint process, and B requires
additional processing after the split-off in order to be salable, how is the joint cost allocated
to B determined?
a. The costs of the additional processing are ignored in allocating joint costs.
b. The costs of the additional processing are subtracted from the joint costs allocated to B.
c. The relative sales value used to allocate the joint cost are determined after the costs of
further processing are subtracted from the ultimate sales value of B.
d. None of these are correct.
The relative sales value used to determine joint costs is determined by subtracting the costs
of further processing from the ultimate sales value of B.
sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. After the
split-off point, X15 required additional processing costing $200,000 to make it salable. Using
the adjusted sales method, how much of the joint cost should be allocated to X15?
a. $100,000
b. $240,000
c. $60,000
d. $75,000
Product
Gallons Selling price Ultimate sales value Costs after split-off Sales value at split-off Percent
sales value Assignment of joint costs
X15 10,000 $40 $400,000 $200,000 $ 200,000 20% $ 60,000
Z24 40,000 $20 800,000 0 800,000 80% 240,000

$1,200,000 $200,000 $1,000,000 $300,000
sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. Using the
physical units method, how much of the joint cost should be allocated to X15?
a. $100,000
b. $225,000
c. $60,000
d. $75,000
Product
Selling price
Gallons
Percentage of total gallons Assignment of joint
costs
X15 $40 15,000 25% $ 75,000
Z24 $20 45,000 75% 225,000
60,000 $300,000
36. Which of the following statements best describes a by-product?

a. A product with a value that can easily and accurately be determined.
b. A product that has a greater value than the main product.
c. A product created along with the main product whose sales value does not cover the cost
of its production.
d. A product that usually produces a small amount of revenue when compared to the main
product revenue.
37. Which of the following is most likely to be accounted for as a by-product?

a. Heating oil resulting from processing crude oil at a refinery.
b. Cream resulting from processing raw milk at a dairy.
c. Sawdust resulting from processing lumber at a lumber mill.
d. Ground beef resulting from processing beef at a meat packer.
Of the choices above, it is most likely that sawdust would have very little sales value
compared to the lumber being processed.
38. Which of the following is not an acceptable method for accounting for by-products in a
joint manufacturing process?
a. Costs before the split-off point are allocated to by-products.
b. The estimated sales value of the by-product reduces the cost of the main product.
c. The joint costs allocated to by-products are included in an account called “By-products
Inventory.”
d. In some instances, the revenue from selling by-products may be treated as “other income”
on the income statement.
Joint costs are not allocated to by-products. When accounting for by-products, the estimated
sales value of the by-product reduces the cost of the main product, and is recorded to an
account called “By-products Inventory.” Alternatively, if the sales value is not easily
estimated, the sales may be recorded as “Other Income.”
39. Thomas Lumber Company produces furniture grade lumber and building grade lumber
from a joint process. Sawdust, a by-product of the manufacturing process is sold to a local
toy manufacturer to stuff leather toys for $10 per ton. In February, the company produced
3,000 tons of sawdust. What is the entry to reduce the cost of the main products by the
estimated sales value of the by-product?
a. By-product inventory $30,000
Work in process $30,000
b. Work in process $30,000

Other income $30,000
c. Cost of goods sold $30,000

By-product inventory $30,000
d. By-product inventory $30,000

Gain or loss on sale of by-product $30,000
PROBLEM
1. Information for Tyson Company in May for Department One, the first stage of the
production cycle, is as follows:
Costs
Beginning work in process $ 7,500 $ 6,000
Costs added during May 28,500 16,050
Total costs $36,000 $22,050
Goods completed 9,000 units

Ending work in process 1,000 units
Material costs are added at the beginning of the process. The ending work in process is 80
percent complete as to conversion costs. How would the total costs accounted for be
distributed using the average cost method?
2. Highlander Corporation is a manufacturer that uses the average cost method to account
for costs of production. Highlander manufactures a product that is produced in three
separate departments: molding, assembling, and finishing. The following information was
obtained for the assembling department for the month of June:
Work in process, June 1: 4,000 units composed of the following:
Amount Percent of
Completion
Transferred in from the molding department $60,000 100%
Costs added by the assembling department:
Direct materials $ 0 0%
Direct labor 12,300 60%
Factory overhead applied 4,700 50%
$17,000
Work in process, June 1 $77,000
The following activity occurred during the month of June:

(1) 20,000 units were transferred in from the molding department at a cost of $300,000.
(2) Costs were added by the assembling department as follows:
Direct materials $ 93,600

Direct labor 43,200
Factory overhead 19,420
$156,220
(3) Materials are added at the end of the process.
(4) 18,000 units were completed and transferred to the finishing department. At June 30,
6,000 units were still in process. The degree of completion of work in process at June 30
follows:
Direct labor 70%

Factory overhead applied 35%
Prepare in good form a cost of production report for the assembling department for the
month of June. Show supporting computations in good form. The report should include:
a. Equivalent units of production.

b. Total manufacturing costs.
c. Cost per equivalent unit.
d. Dollar amount of ending work in process.
e. Dollar amount of inventory cost transferred out.
3. Logan, Inc., had 9,000 units of work in process in Department M on March 1 that were 50
percent complete as to conversion costs. Materials are introduced at the beginning of the
process. During March, 18,000 units were started, 20,000 units were completed, and there
were 1,000 units of normal losses. Logan had 6,000 units of work in process at March 31 that
were 60 percent complete as to conversion costs. Under Logan's cost accounting system, lost
units reduce the number of units over which total cost can be spread. Using the average cost
method, what were the equivalent units for March for conversion costs?
5. The Roberto Company had computed the flow of units for Department A for the month of
May as follows:
Work in process, May 1: 10,000

Started into production during May 39,000
Units to be accounted for 49,000
the cost (rounded to two places) per equivalent unit for materials for June is:
a. $0.63.
b. $0.90.
c. $0.77.
d. $0.78.
To complete beginning units in process (all had 100% of materials) 0

Units started and completed during the month (85,000 started - 15,000 in ending WIP) 70,000
Equivalent production for materials in period 85,000
Materials cost:
Added during June $66,300
Units Materials
Costs
during April
65,000
Using the FIFO method, what is the materials cost of the work in process at April 30 (rounded
to nearest dollar)?
a. $7,154
b. $6,200
c. $7,750
d. $6,417
Units
Started 60,000
Total 75,000
To complete beginning in process units (materials all 100%) 0
Units started and finished during month (60,000 started - 10,000 in ending WIP) 50,000
Materials cost:
Costs added during June $38,500
Units
Materials are added at the end of the process in the First department. Using the first-in,
first-out method, what are the equivalent units of production for the month of April?
a. 250,000 259,000
b. 280,000 259,000
c. 340,000 271,000
d. 280,000 271,000
Materials:
To complete beginning units in process (materials were 0% complete) 90,000
190,000
Total 280,000

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CHAPTER 6—PROCESS COST ACCOUNTING--ADDITIONAL PROCEDURES

Work in process, August 1 50,000

Units Materials Costs

Work in process, beginning of month 20,000 $14,550

Units Materials Costs

Units completed during April 65,000

$38,500 / 60,000 units = cost per equivalent unit $ .62

Work in process, August 1 50,000

In process, beginning of period 1,000 units

What are the equivalent units for:

Materials Conversion Costs

Material Conversion Costs

500 x 25% - Material 125

Units completed and transferred 37,000

Units completed and transferred 195,000

13. If the amount of loss in a manufacturing process is abnormal, it should be classified as a:

If added materials result in additional units, it causes a decrease in the preceding

Gallons transferred in from the Refining Department 25,000

Cost of ABX - $100,000 / 40,000 gallons = $2.50

a. Units started this period in this process.

Beginning work in process, 20% completed 5,000

Beginning work in process 5,000

Equivalent units of material:

In process, beginning of the period 3,000 units

Units finished during the period 12,000

In process, beginning of the period 3,000 units

Transferred to stockroom during period 12,000 units

Units finished during the period 12,000

Needed to finish beginning work in process

Work in process, beginning of month 20,000 $14,550

To complete beginning units in process (all had 100% of materials) 0

$66,300 / 85,000 units = cost per equivalent unit $ .78

$38,500 / 60,000 units = cost per equivalent unit $ .6417

31. Joint costs are commonly allocated based upon relative:

X15 10,000 $40 $400,000 $200,000 $ 200,000 20% $ 60,000

Z24 40,000 $20 800,000 0 800,000 80% 240,000

36. Which of the following statements best describes a by-product?

37. Which of the following is most likely to be accounted for as a by-product?

b. Work in process $30,000

c. Cost of goods sold $30,000

d. By-product inventory $30,000

Goods completed 9,000 units

Work in process, June 1: 4,000 units composed of the following:

The following activity occurred during the month of June:

(2) Costs were added by the assembling department as follows:

Direct materials $ 93,600

(3) Materials are added at the end of the process.

Direct labor 70%

a. Equivalent units of production.

Work in process, May 1: 10,000

To complete beginning units in process (all had 100% of materials) 0

$66,300 / 85,000 units = cost per equivalent unit $ .78

$38,500 / 60,000 units = cost per equivalent unit $ .6417

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