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Chapter 6Process Costing

MULTIPLE CHOICE
1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing
environments?
a. standard
b. actual
c. process
d. job order
ANS: C
PTS: 1
DIF: Easy
OBJ: 6-1
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
2. Process costing is used in companies that
a. 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: 6-1
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
3. A producer of ____ would not use a process costing system.
a. gasoline
b. potato chips
c. blank videotapes
d. stained glass windows
ANS: D
PTS: 1
DIF: Easy
OBJ: 6-1
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

4. A process costing system is used by a company that


a. 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: 6-1
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
5. Which is the best cost accumulation procedure to use for continuous mass production of like units?
a. actual
b. standard
c. job order
d. process
ANS: D
PTS: 1
DIF: Easy
OBJ: 6-1
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
6. Equivalent units of production are equal to the
a. 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: 6-2
NAT: AACSB: Reflective Thinking
LOC: 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 cost
b. current period cost plus the cost of beginning inventory
c. current period cost less the cost of beginning inventory
d. current period cost plus the cost of ending inventory
ANS: B
PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
8. The weighted average method is thought by some accountants to be inferior to the FIFO method
because it
a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

9. The first step in determining the cost per EUP per cost component under the weighted average method
is to
a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
10. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the
equivalent units
a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
11. EUP calculations for standard process costing are the same as
a. 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: 6-5
NAT: AACSB: Reflective Thinking
LOC: 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 period
b. units started last period
c. units transferred out
d. units still in process
ANS: B
PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Reflective Thinking
LOC: 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 units
a. 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: 6-4
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

14. The FIFO method of process costing will produce the same cost of goods transferred out amount as the
weighted average method when
a. 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: 6-4
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
15. The primary difference between the FIFO and weighted average methods of process costing is
a. 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: 6-4
NAT: AACSB: Reflective Thinking
LOC: 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 the
a. 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: 6-4
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
17. In a cost of production report using process costing, transferred-in costs are similar to the
a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: 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 a
a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

19. Transferred-in cost represents the cost from


a. 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: 6-3
NAT: AACSB: Reflective Thinking
LOC: 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
account for
a.
b.
c.
d.

no
yes
yes
yes

EUP
calculations
yes
yes
no
no

Total cost to
account for
no
yes
no
yes

ANS: D
PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
21. 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
PTS: 1
DIF: Easy
OBJ: 6-1
NAT: AACSB: Reflective Thinking
LOC: 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 as
a. strict FIFO.
b. modified FIFO.
c. weighted average costing.
d. normal costing.
ANS: B
PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

23. A process costing system


a. 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: 6-2
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
24. A process costing system does which of the following?
Calculates EUPs
a.
b.
c.
d.

Assigns costs to inventories

no
no
yes
yes

no
yes
yes
no

ANS: C
PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
25. A process costing system
Calculates average cost
per whole unit
a.
b.
c.
d.

yes
no
yes
no

Determines total units to


account for
yes
no
no
yes

ANS: D
PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
26. A hybrid costing system combines characteristics of
a. 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: 6-6
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

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: 6-5
NAT: AACSB: Reflective Thinking
LOC: 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 period
b. beginning WIP EUP produced in prior period
c. ending WIP EUP not completed
d. ending WIP EUP completed
ANS: B
PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
29. The cost of abnormal continuous losses is
a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
30. Abnormal spoilage can be
continuous

discrete

a.
b.
c.
d.

no
no
yes
yes

yes
no
yes
no

ANS: C
PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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 considered
a. normal and discrete.
b. normal and continuous.
c. abnormal and discrete.
d. abnormal and continuous.
ANS: D
PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

32. A continuous loss


a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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 ketchup
b. putting the appropriate components together for a stereo
c. adding the wrong components when assembling a stereo
d. putting the appropriate pieces for a bike in the box
ANS: C
PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
34. The method of neglect handles spoilage that is
a. discrete and abnormal.
b. discrete and normal.
c. continuous and abnormal.
d. continuous and normal.
ANS: D
PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
35. The cost of normal discrete losses is
a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
36. The cost of abnormal continuous losses is
a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

37. Normal spoilage units resulting from a continuous process


a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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 considered
a. normal and discrete.
b. normal and continuous.
c. abnormal and discrete.
d. abnormal and continuous.
ANS: D
PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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 Revenue
b. Loss from Spoilage
c. Finished Goods
d. Work in Process
ANS: D
PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
40. The cost of abnormal discrete units must be assigned to
good units

lost units

a.
b.
c.
d.

yes
no
no
yes

yes
no
yes
no

ANS: D
PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

10

41. Which of the following statements is false? The cost of rework on defective units, if
a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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 be
a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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
Inventory

Ending
Inventory

Units Started
& Completed

no
yes
no
yes

yes
yes
no
no

yes
yes
yes
no

a.
b.
c.
d.

ANS: B
PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

11

45. Normal spoilage units resulting from a continuous process


a. 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: 6-8
NAT: AACSB: Reflective Thinking
LOC: AICPA Functional Competencies: Measurement, Reporting
46. The addition of material in a successor department that causes an increase in volume is called
a. accretion.
b. reworked units.
c. complex procedure.
d. undetected spoilage.
ANS: A
PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Reflective Thinking
LOC: 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: A
Units Transferred Out
Less: Units in Beginning Inventory
Units Started and Completed

5,500
(300)
5,200

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 5,600
b. 5,860
c. 6,000
d. 6,750
ANS: A
Units Transferred Out
Less: Units in Beginning Inventory
Units Started and Completed

6,000
(400)
5,600

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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 were
a. 500.
b. 600.
c. 1,500.
d. 2,000.
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

1,500
9,000
(7,000)
3,500

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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 were
a. 400.
b. 1,000.
c. 1,280.
d. 2,200.
ANS: B
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

1,000
8,600
(6,400)
3,200

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 42,000
b. 47,000
c. 54,000
d. 59,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

5,000
54,000
( 47,000)
12,000

PTS: 1
DIF: Moderate
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 46,000
b. 52,000
c. 57,000
d. 63,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

6,000
57,000
( 52,000)
11,000

PTS: 1
DIF: Moderate
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 1,250
b. 3,000
c. 3,500
d. 5,750
ANS: D
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

4,500
13,000
( 11,750)
5,750

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 1,750
b. 3,000
c. 5,500
d. 6,750
ANS: D
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

5,000
14,000
( 12,250)
6,750

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. 37,800
b. 40,200
c. 40,800
d. 42,000
ANS: B
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

12,000
12,000
27,000
3,000

20%
80%
100%
40%

2,400
9,600
27,000
1,200
40,200

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. 43,350
b. 47,100
c. 48,900
d. 51,000
ANS: B
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

15,000
15,000
30,000
6,000

25%
75%
100%
35%

3,750
11,250
30,000
2,100
47,100

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. 3,450
b. 4,560
c. 4,610
d. 4,910

Chapter 6

15

ANS: D
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

250
250
3,300
1,700

40%
60%
100%
80%

100
150
3,300
1,360
4,910

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. 4,265
b. 5,590
c. 5,825
d. 6,300
ANS: C
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

300
300
4,100
1,900

45%
55%
100%
75%

135
165
4,100
1,425
5,825

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. 18,000
b. 22,000
c. 25,000
d. 27,000
ANS: B
The 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 Skills
LOC: 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

a.
b.
c.
d.

16

18,500
25,000
26,500
31,000

ANS: B
The 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 Skills
LOC: 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. 3,295
b. 3,395
c. 3,450
d. 3,595
ANS: A
Beginning Work in Process (Ignored for FIFO)
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

500
500
2,950
350

0%
20%
100%
70%

100
2,950
245
3,295

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. 3,570
b. 3,750
c. 3,870
d. 4,020
ANS: A
Beginning Work in Process (Ignored for FIFO)
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

600
600
3,150
450

0%
25%
100%
60%

150
3,150
270
3,570

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

17

Brewer Corporation
Brewer Corporation. has the following information for August:
Beginning Work in Process Inventory
(70% complete as to conversion)
Started
Ending Work in Process Inventory
(10% complete as to conversion)

6,000 units
24,000 units
8,500 units

Beginning WIP Inventory Costs:


Material
Conversion

$23,400
50,607

Current Period Costs:


Material
Conversion

$31,500
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. 15,500
b. 18,000
c. 21,500
d. 24,000
ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

6,000
24,000
(21,500)
8,500

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. $0.55
b. $1.05
c. $1.31
d. $1.83
ANS: D
Material Costs:
Beginning
Current Period

$23,400
31,500
54,900 30,000 units =

$ 1.83

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. $3.44
b. $4.24
c. $5.71
d. $7.03
ANS: B
Conversion Costs:
Beginning (Ignored for FIFO)
Current Period

$
$

Equivalent Units
Beginning Inventory (6,000 * 30%)
Started and Completed (15,500)
Ending Inventory (8,500 * 10%)

76,956
76,956
1,800
15,500
850
18,150 eq units

Cost per equivalent unit

$ 4.24

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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)
Started
Ending Work in Process Inventory
(15% complete as to conversion)

7,500 units
27,000 units
9,400 units

Beginning WIP Inventory Costs:


Material
Conversion

$25,500
52,725

Current Period Costs:


Material
Conversion

$34,300
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. 17,600
b. 19,500
c. 25,100
d. 27,000

Chapter 6

19

ANS: C
Beginning Work in Process
Add: Units Started
Deduct: Units Transferred Out
Ending Work in Process

7,500
27,000
(25,100)
9,400

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: 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. $0.99
b. $1.18
c. $1.64
d. $1.73
ANS: D
Material Costs:
Beginning
Current Period

$25,500
_34,300
$59,800 34,500 units =

$ 1.73

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. $3.05
b. $3.87
c. $4.25
d. $6.40
ANS: B
Conversion Costs:
Beginning (Ignored for FIFO)
Current Period

$
$

Equivalent Units
Beginning Inventory (7,500 * 25%)
Started and Completed (17,600)
Ending Inventory (9,400 * 15%)

80,845
80,845
1,875
17,600
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 Skills
LOC: 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
Conversion
Current Costs:
Material
Conversion

$1,000
1,500
$3,200
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
Material
Conversion
Current Period:
Transferred In
Material
Conversion

$1,170
4,320
6,210
?
$67,745
95,820

69. Refer to Fantastic Decorations Corporation. How many units were transferred to Decorating during
the month?
a.
600
b. 4,900
c. 5,950
d. 7,000
ANS: B
Wreaths completed from BWIP
Wreaths started and completed

500
4,400
4,900

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
70. Refer to Fantastic Decorations Corporation. What was the cost transferred out of Forming during the
month?
a. $5,341
b. $6,419
c. $8,245
d. $8,330

Chapter 6

21

ANS: D
Units Transferred Out
4,900

Cost per Eq. Unit


1.70

Total
$8,330

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. 7,400
b. 7,700
c. 8,000
d. 8,600
ANS: C
The transferred-in cost component is the 8,000 units that were transferred in.

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. 7,970
b. 8,000
c. 8,330
d. 8,450
ANS: A
Materials: Decorating: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

Units
600
7,700
300

% Complete
20%
100%
50%

Eqiv. Units
120
7,700
150
7,970

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. 7,925
b. 7,985
c. 8,360
d. 8,465

Chapter 6

22

ANS: B
Conversion: Decorating: FIFO

Units

Beginning Work in Process


+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

% Complete

Equiv.
Units

600

10%

60

7,700

100%

7,700

300

75%

225
7,985

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $8.50
b. $8.65
c. $8.80
d. $9.04
ANS: A
When FIFO is used, consider only current costs.
Current Costs
$67,745

Equiv
Units
7,970

Cost/
Equiv Unit
$8.50

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $11.32
b. $11.46
c. $12.00
d. $12.78
ANS: C
When FIFO is used, consider only current costs.
Current Costs
$95,820

Equiv
Units
7,985

Cost/
Equiv Unit
$12.00

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

76.

23

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. $ 960
b. $ 1,380
c. $ 1,860
d. $11,940
ANS: C
Costs to
Complete Beg Inv
Materials
Conversion
Total Costs to Complete

Units
600
600

Percent to
Complete

Cost per
Unit
20%
$8
10%
$15

Total
$960
$900
$1,860

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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)
Started this period
Ending Work in Process Inventory
(25% complete as to conversion)
Transferred out

7,000
32,000

units
units

2,500
?

units

77. Refer to Four Seasons Company. Compute the number of units started and completed in August.
a. 29,500
b. 34,500
c. 36,500
d. 39,000
ANS: A
Units started this period
Less: Ending Work in Process
Units started and completed this period

32,000
2,500
29,500

PTS: 1
DIF: Moderate
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
78. Refer to Four Seasons Company. Calculate equivalent units of production for material using FIFO.
a. 32,000
b. 36,800
c. 37,125
d. 39,000

Chapter 6

24

ANS: A
Materials 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 Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
79. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using FIFO.
a. 30,125
b. 34,325
c. 37,125
d. 39,000
ANS: B
Equivalent Units for Conversion
Beginning Inventory (7,000 * 60%)
Started and Completed (29,500)
Ending Inventory (2,500 * 25%)

4,200
29,500
625
34,325 eq. units

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
80. Refer to Four Seasons Company. Calculate equivalent units of production for material using weighted
average.
a. 32,000
b. 34,325
c. 37,125
d. 39,000
ANS: D
Equivalent Units--Materials
Beginning Inventory (7,000 units)
Started this Period (32,000)

7,000
32,000
39,000 eq. units

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
81. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using
weighted average.
a. 34,325
b. 37,125
c. 38,375
d. 39,925
ANS: B
Equivalent Units--Conversion
Beginning Inventory (7,000 * 100%)
Started and Completed (29,500)
Ending Inventory (2,500 * 25%)

7,000
29,500
625
37,125 eq. units

Chapter 6

25

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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)
Started this period
Ending Work in Process Inventory
(80% complete as to conversion)
Beginning Work in Process Inventory Costs:
Material
Conversion
Current Period Costs:
Material
Conversion

10,000
120,000

units
units

8,200

units

$24,500
68,905

$ 75,600
130,053

82. Refer to Simpson Company. How many units must be accounted for?
a. 118,200
b. 128,200
c. 130,000
d. 138,200
ANS: C
Beginning Work in Process
Units Started
Total Units

10,000
120,000
130,000

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
83. Refer to Simpson Company. What is the total cost to account for?
a. $ 93,405
b. $205,653
c. $274,558
d. $299,058
ANS: D
BWIP: Materials
BWIP: Conversion
Current Period: Materials
Current Period: Conversion
Total Costs

$ 24,500
68,905
75,600
130,053
$299,058

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting

Chapter 6

26

84. Refer to Simpson Company. How many units were started and completed in the period?
a. 111,800
b. 120,000
c. 121,800
d. 130,000
ANS: A
Units started this period
Less: Ending Work in Process
Units started and completed this period

120,000
8,200
111,800

PTS: 1
DIF: Easy
OBJ: 6-2
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
85. Refer to Simpson Company. What are the equivalent units for material using the weighted average
method?
a. 120,000
b. 123,860
c. 128,360
d. 130,000
ANS: D
Equivalent Units
Beginning Inventory (10,000 * 100%)
Started and Completed (111,800)
Ending Inventory (8,200 * 25%)

10,000
111,800
8,200
130,000 eq. units

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
86. Refer to Simpson Company. What are the equivalent units for material using the FIFO method?
a. 111,800
b. 120,000
c. 125,500
d. 130,000
ANS: B
Equivalent Units
Beginning Inventory (Ignored for FIFO)
Started and Completed (111,800)
Ending Inventory (8,200 * 25%)

0
111,800
8,200
120,000 eq. units

PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
87. Refer to Simpson Company. What are the equivalent units for conversion using the weighted average
method?
a. 120,000
b. 123,440
c. 128,360
d. 130,000

Chapter 6

27

ANS: C
Beginning Work in Process
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

10,000
10,000
111,800
8,200

45%
55%
100%
80%

4,500
5,500
111,800
6,560
128,360

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
88. Refer to Simpson Company. What are the equivalent units for conversion using the FIFO method?
a. 118,360
b. 122,860
c. 123,860
d. 128,360
ANS: C
Beginning Work in Process (ignored)
+ Completion of Units in Process
+ Units Started and Completed
+ Ending Work in Process
Equivalent Units of Production

10,000
10,000
111,800
8,200

0%
55%
100%
80%

5,500
111,800
6,560
123,860

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
89. Refer to Simpson Company. What is the material cost per equivalent unit using the weighted average
method?
a. $.58
b. $.62
c. $.77
d. $.82
ANS: C
Material Costs:
Beginning
Current Period

$ 24,500
75,600
100,100 130,000 units=

$ 0.77 per unit

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
90. Refer to Simpson Company. What is the conversion cost per equivalent unit using the weighted
average method?
a. $1.01
b. $1.05
c. $1.55
d. $1.61

Chapter 6

28

ANS: C
Conversion Costs:
Beginning
Current Period

$ 68,905
130,053
198,958 128,360 units=

$ 1.55 per unit

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
91. Refer to Simpson Company. What is the cost of units completed using the weighted average method?
a. $237,510
b. $266,742
c. $278,400
d. $282,576
ANS: D
Units Completed
121,800

Costs per Equivalent Unit


(1.55 + .77) = $2.32

Total
$282,576

PTS: 1
DIF: Difficult
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
92. Refer to Simpson Company. What is the conversion cost per equivalent unit using the FIFO method?
a. $1.05
b. $.95
c. $1.61
d. $1.55
ANS: A
Conversion 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 Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
93. Refer to Simpson Company. What is the cost of all units transferred out using the FIFO method?
a. $204,624
b. $191,289
c. $287,004
d. $298,029
ANS: C
Beginning Inventory
10,000 units:
Raw Materials (prior period)
Direct Labor (prior period
FOH (10,000 * .55 * $1.05)
Units Started and Completed
111,800 units * $ (.63+1.05):
Total

$24,500
68,905
5,775
$99,180
$187,824
$287,004

Chapter 6

29

PTS: 1
DIF: Difficult
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
Mercury Corporation
Beginning inventory (30% complete as to Material B
and 60% complete for conversion)
Started this cycle
Ending inventory (50% complete as to Material B and
80% complete for conversion)

700

units

2,000
500

units
units

Beginning inventory costs:


Material A
Material B
Conversion

$14,270
5,950
5,640

Current Period costs:


Material A
Material B
Conversion

$40,000
70,000
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, 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
Beginning Work in Process
Units Started and Completed
Ending Work in Process
EUP Materials

Material A
700
1,500
500
2,700

Material B
700
1,500
250
2,450

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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, 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
Beginning Work in Process
Units Started and Completed
Ending Work in Process

Material A
0
1,500
500

Material B
490
1,500
250

Chapter 6

30

EUP Materials

2,000

2,240

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
96. Refer to Mercury Corporation 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
Units Started and Completed
Ending Work in Process

700
1,500
400
2,600

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
97. Refer to Mercury Corporation 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%)
Units Started and Completed
Ending Work in Process (500 * 80%)

280
1,500
400
2,180

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $20.10
b. $20.00
c. $31.25
d. $31.00
ANS: A
Weighted Average: Material A
Beginning
Current Period

14,270
40,000
54,270 2,700 units=

$ 20.10 per unit

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. $31.25
b. $20.10
c. $20.00
d. $31.00
ANS: C
Material A Costs
(Current Period)
$40,000

Equivalent Units

Average Cost per EUP

2,000

$20.00

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $20.10
b. $31.25
c. $20.00
d. $31.00
ANS: B
Material B Costs
(Current Period)
$70,000

Equivalent Units
2,240

Average Cost per EUP


$31.25

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $20.00
b. $31.25
c. $20.10
d. $31.00
ANS: D
Material B Costs
(Beginning Inventory and Current Period)
$75,950

Equivalent Units
2,450

Average Cost per EUP


$31.00

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. $45.50
b. $45.00
c. $43.03
d. $47.59

Chapter 6

32

ANS: B
Conversion Costs
(Current Period)
$98,100

Equivalent Units

Average Cost per EUP


2,180

$45.00

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $39.90
b. $45.00
c. $43.03
d. $47.59
ANS: A
Conversion Costs
(Beginning WIP and Current Period)

Equivalent Units

$(98,100 + $5,640)=$103,640

Average Cost per EUP

2,600

$39.90

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
Guthrie Corporation
The following information is available for Guthrie Corporation for the current year:
Beginning Work in Process
(75% complete)
Started
Ending Work in Process
(60% complete)
Abnormal spoilage
Normal spoilage
(continuous)
Transferred out

Costs of Beginning Work in Process:


$25,100
Material
50,000
Conversion
Current Costs:
16,000 units
$120,000
Material
2,500 units
300,000
Conversion
14,500 units
75,000 units

5,000 units
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. 82,000
b. 89,500
c. 84,500
d. 70,000
ANS: C
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production

Units
14,500
51,500
16,000
2,500

% Complete
100%
100%
100%
100%

Eq. Units
14,500
51,500
16,000
2,500
84,500

Chapter 6

33

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
105. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for conversion costs?
a. 80,600
b. 78,100
c. 83,100
d. 75,600
ANS: B
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production

Units
14,500
51,500
16,000
2,500

% Complete
100%
100%
60%
100%

Eq Units
14,500
51,500
9,600
2,500
78,100

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
106. Refer to Guthrie Corporation. What is the cost per equivalent unit for material using weighted
average?
a. $1.72
b. $1.62
c. $1.77
d. $2.07
ANS: A
Weighted Average: Materials
Beginning
Current Period

25,100
120,000
145,100 84,500 units= $1.72 per unit

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
107. Refer to Guthrie Corporation. What is the cost per equivalent unit for conversion costs using weighted
average?
a. $4.62
b. $4.21
c. $4.48
d. $4.34
ANS: C
Weighted Average: Conversion
Beginning
Current Period

$
$

50,000
300,000
350,000 78,100 units = $ 4.48 per unit

PTS: 1
DIF: Moderate
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: 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. $31,000
b. $15,500
c. $30,850
d. None of the responses are correct
ANS: D
No 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 Skills
LOC: 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. $100,800
b. $87,430
c. $103,180
d. $71,680
ANS: D
Equivalent
Units
16,000
9,600

Cost per
Equivalent Unit
$1.75
$4.55

Total
$28,000
$43,680
$71,680

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
110. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for material?
a. 75,000
b. 72,500
c. 84,500
d. 70,000
ANS: D
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production

51,500
16,000
2,500

0%
100%
100%
100%

51,500
16,000
2,500
70,000

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
111. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for conversion costs?
a. 72,225
b. 67,225
c. 69,725
d. 78,100

Chapter 6

35

ANS: B
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Abnormal Spoilage
Equivalent Units of Production

14,500
51,500
16,000
2,500

25%
100%
60%
100%

3,625
51,500
9,600
2,500
67,225

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
112. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for material?
a. $1.42
b. $1.66
c. $1.71
d. $1.60
ANS: C
FIFO: Materials
Current Period

120,000
120,000 70,000 units = $1.71 per unit

PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
113. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for conversion costs?
a. $4.46
b. $4.15
c. $4.30
d. $3.84
ANS: A
FIFO: Conversion
Current Period

300,000
300,000 67,225 units =

$ 4.46 per unit

PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $414,194
b. $339,094
c. $445,444
d. $396,975
ANS: A
Transferred Out Units: FIFO
Beginning Work in Process
+ Completion of Beginning Inventory
+Units Started and Completed
Equivalent Units of Production

Equiv
Units
(14,500 * 25%)

3,625
51,500

Cost per
Equiv Unit
4.75
6.25

Total
75,100
17,219
321,875
414,194

Chapter 6

36

PTS: 1
DIF: Difficult
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
Crafton Corporation
Crafton Corporation has the following information for the current month:
Units started
Beginning Work in Process: (35% complete)
Normal spoilage (discrete)
Abnormal spoilage
Ending Work in Process: (70% complete)
Transferred out
Beginning Work in Process Costs:
Material
Conversion

100,000
20,000
3,500
5,000
14,500
97,000

units
units
units
units
units
units

$15,000
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. 100,000
b. 96,500
c. 95,000
d. 120,000
ANS: A
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

77,000
3,500
5,000
14,500

0%
100%
100%
100%
100%

77,000
3,500
5,000
14,500
100,000

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
116. Refer to Crafton Corporation. What are equivalent units of production for conversion costs, assuming
FIFO?
a. 108,900
b. 103,900
c. 108,650
d. 106,525
ANS: D
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process

20,000
77,000
3,500
5,000
14,500

65%
100%
75%
75%
70%

13,000
77,000
2,625
3,750
10,150

Chapter 6

37

Equivalent Units of Production

106,525

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $0
b. $9,375
c. $10,625
d. $12,500
ANS: C
Abnormal spoilage is a period cost.
Materials
Conversion Costs
Total Abnormal Spoilage

5,000 * $1.00/unit
3,750 * $1.50/unit

$5,000
5,625
$10,625

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $245,750
b. $244,438
c. $237,000
d. $224,938
ANS: B
Transferred Out Units: FIFO
Beginning Work in Process
+ Completion of Beginning Inventory
+ Units Started and Completed
+Normal Spoilage--Discrete-Materials
+Normal Spoilage--Discrete-Conversion
Equivalent Units of Production

(20,000 * 65%)

13,000
77,000
3,500
2,625

1.50
2.50
1.00
1.50

$ 25,000
19,500
192,500
3,500
3,938
$244,438

PTS: 1
DIF: Difficult
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
119. Refer to Crafton Corporation. What are equivalent units of production for material assuming weighted
average is used?
a. 107,000
b. 116,500
c. 120,000
d. 115,000

Chapter 6

38

ANS: C
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

20,000
77,000
3,500
5,000
14,500

100%
100%
100%
100%
100%

20,000
77,000
3,500
5,000
14,500
120,000

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. 113,525
b. 114,400
c. 114,775
d. 115,650
ANS: A
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

20,000
77,000
3,500
5,000
14,500

100%
100%
75%
75%
70%

20,000
77,000
2,625
3,750
10,150
113,525

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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
a.
b.
c.
d.

$7,438
$7,438
$8,750
$8,750

Assigned To
Units transferred out and Ending Inventory
Units transferred out
Units transferred out and Ending Inventory
Units transferred out

ANS: B

Equivalent Units
3,500
2,625

Cost per
Equivalent Unit
$1.00
$1.50

Total
$3,500
3,938
$7,438

This amount is transferred out.

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $29,725.00
b. $37,162.50
c. $38,475.00
d. $36,250.00
ANS: A
Ending Inventory: Weighted Average
Materials
14,500
Conversion (14,500 * 70%)
10,150
Total

$1.00
1.50

14,500.00
15,225.00
$ 29,725.00

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
Knight Corporation
Knight Corporation has the following information for the current month:
Units started
Beginning Work in Process: (30% complete)
Normal spoilage (discrete)
Abnormal spoilage
Ending Work in Process: (75% complete)
Transferred out
Beginning Work in Process Costs:
Material
Conversion

95,000
15,000
3,000
4,000
15,000
88,000

units
units
units
units
units
units

$18,000
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. 91,000
b. 92,000
c. 95,000
d. 110,000
ANS: C
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

73,000
3,000
4,000
15,000

0%
100%
100%
100%
100%

73,000
3,000
4,000
15,000
95,000

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. 97,750
b. 100,000
c. 101,750
d. 104,500
ANS: B
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

15,000
73,000
3,000
4,000
15,000

70%
100%
75%
75%
75%

10,500
73,000
2,250
3,000
11,250
100,000

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $0
b. $12,750
c. $14,750
d. $17,000
ANS: C
Abnormal spoilage is a period cost.
Materials
Conversion Costs
Total Abnormal Spoilage

4,000 * $2.00/unit
3,000 * $2.25/unit

$ 8,000
6,750
$14,750

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $344,938
b. $365,875
c. $376,938
d. $378,625
ANS: C
Transferred Out Units: FIFO
Beginning Work in Process
+ Completion of Beginning Inventory
+ Units Started and Completed
+Normal Spoilage--Discrete-Materials
+Normal Spoilage--Discrete-Conversion
Total Costs Assigned to Transferred Units

(15,000 * 70%)

(3,000 * 75%)

10,500
73,000
3,000
2,250

$2.25
4.25
2.00
2.25

$ 32,000
23,625
310,250
6,000
5,063
$376,938

PTS: 1
DIF: Difficult
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. 105,500
b. 106,000
c. 107,000
d. 110,000
ANS: D
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

15,000
73,000
3,000
4,000
15,000

100%
100%
100%
100%
100%

15,000
73,000
3,000
4,000
15,000
110,000

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. 103,750
b. 104,500
c. 104,750
d. 105,500
ANS: B
Conversion: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+Normal Spoilage--Discrete
+ Abnormal Spoilage
+ Ending Work in Process
Equivalent Units of Production

15,000
73,000
3,000
4,000
15,000

100%
100%
75%
75%
75%

15,000
73,000
2,250
3,000
11,250
104,500

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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
a.
b.
c.
d.

$11,063
$11,063
$12,750
$12,750

Assigned To
Units transferred out and Ending Inventory
Units transferred out
Units transferred out and Ending Inventory
Units transferred out

Chapter 6

42

ANS: B
Equivalent
Units
3,000
2,250

Cost per
Equivalent Unit
$2.00
$2.25

Total
$6,000
5,063
$11,063

This amount is transferred out.

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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. $55,312.50
b. $63,750.00
c. $66,375.00
d. $72,312.50
ANS: A
Ending Inventory: Weighted Average
Materials
15,000
Conversion (15,000 * 75%)
11,250
Total

$2.00
2.25

30,000.00
25,312.50
$ 55,312.50

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
Chapman Corporation
The following information is available for Chapman Corporation for the current month:
Started this month
Beginning WIP
(40% complete)
Normal spoilage (discrete)
Abnormal spoilage
Ending WIP
(70% complete)
Transferred out
Beginning Work in Process Costs:
Material
Conversion
Current Costs:
Material
Conversion

80,000

units

7,500
1,100
900

units
units
units

13,000
72,500

units
units

$10,400
13,800
$120,000
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. 80,000
b. 79,100
c. 78,900
d. 87,500
ANS: A
Materials: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production

0%
100%
100%
100%
100%

65,000
13,000
1,100
900

65,000
13,000
1,100
900
80,000

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
132. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using
FIFO?
a. 79,700
b. 79,500
c. 81,100
d. 80,600
ANS: D
% Complete

Conversion: FIFO

EUP

Units

Beginning Work in Process


+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production

7,500
65,000
13,000
1,100
900

60%
100%
70%
100%
100%

4,500
65,000
9,100
1,100
900
80,600

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
133. Refer to Chapman Corporation. What are equivalent units of production for material using weighted
average?
a. 86,600
b. 87,500
c. 86,400
d. 85,500
ANS: B
Materials: Weighted Average
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production

Units

7,500
65,000
13,000
1,100
900

% Complete

100%
100%
100%
100%
100%

EUP

7,500
65,000
13,000
1,100
900
87,500

Chapter 6

44

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
134. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using
weighted average?
a. 83,600
b. 82,700
c. 82,500
d. 81,600
ANS: A
Conversion: FIFO
Beginning Work in Process
+ Units Started and Completed
+ Ending Work in Process
+ Normal Spoilage (discrete)
+ Abnormal Spoilage
Equivalent Units of Production

Units

% Complete

7,500
65,000
13,000
1,100
900

100%
100%
70%
100%
100%

EUP

7,500
65,000
9,100
1,100
900
83,600

PTS: 1
DIF: Easy
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
135. Refer to Chapman Corporation. What is cost per equivalent unit for material using FIFO?
a. $1.63
b. $1.37
c. $1.50
d. $1.56
ANS: C
FIFO: Materials
Current Period

$ 120,000
$ 120,000 80,000
units=

$ 1.50 per unit

PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
136. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using FIFO?
a. $4.00
b. $4.19
c. $4.34
d. $4.38
ANS: C
FIFO: Conversion
Current Period

$ 350,000
$ 350,000 80,600 units = $ 4.34 per unit

PTS: 1
DIF: Easy
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: 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. $1.49
b. $1.63
c. $1.56
d. $1.44
ANS: A
Weighted Average:
Materials
Beginning
Current Period

$ 10,400
120,000
130,400 87,500 units =

$ 1.49 /unit

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
138. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using weighted
average?
a. $4.19
b. $4.41
c. $4.55
d. $4.35
ANS: D
Weighted Average:
Conversion
Beginning
Current Period

$ 13,800
350,000
363,800 83,600 units = $4.35 per unit

PTS: 1
DIF: Easy
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
139. Refer to Chapman Corporation. What is the cost assigned to ending inventory using FIFO?
a. $75,920
b. $58,994
c. $56,420
d. $53,144
ANS: B
Ending Inventory: FIFO
Materials
Conversion (13,000 * 70%)
Total

13,000
9,100

$ 1.50
4.34

$ 19,500
39,494
$ 58,994

PTS: 1
DIF: Moderate
OBJ: 6-4
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
140. Refer to Chapman Corporation. What is the cost assigned to abnormal spoilage using FIFO?
a. $1,350
b. $3,906
c. $5,256
d. $6,424

Chapter 6

46

ANS: C
Abnormal
Spoiled Units
900

Price per Equivalent Unit


$5.84 $5,256

Total

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: 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 Out
b. $6,424 allocated between WIP and Transferred Out
c. $6,193 assigned to loss account
d. $6,424 assigned to units Transferred Out
ANS: D
Normal
Spoiled Units
1,100

Price per Equivalent Unit


Total
$5.84 $6,424 Transferred Out

PTS: 1
DIF: Moderate
OBJ: 6-8
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting
142. Refer to Chapman Corporation. What is the total cost assigned to goods transferred out using weighted
average?
a. $435,080
b. $429,824
c. $428,656
d. $423,400
ANS: B
Goods Transferred Out/ Price per Eq Unit
73,600
$5.84

Total
$429,824

PTS: 1
DIF: Difficult
OBJ: 6-3
NAT: AACSB: Analytical Skills
LOC: AICPA Functional Competencies: Measurement, Reporting