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PROCESS COSTING 1.

If spoilage occur due as a result of an internal failure (discrete) in a process cost system, using fifo costing , the number of equivalent units that production costs should be charged to would be based upon: a. Spoiled units c. Units transferred out, beginning and ending units

b. Units transferred out and spoiled units d. Units transferred out, spoilage, ending and beginning units 2. Spoilage occurs as a result of normal production shrinkage in a process cost system, using average costing, the number of equivalent units that production costs should be charged to would be based upon: a. Spoiled units c. units transferred out, spoiled units and ending inventory b. Units transferred out and spoiled units d. units transferred out and units in ending inventory 3. In a process costing, the cost of spoilage due to an internal failure should be recorded as: a. DR: WIP; CR: FG b. DR:WIP; CR: FOHc. DR: FOH, CR: WIP d. DR: FG; CR: WIP 4. In a process costing, the cost of rework is usually debited to: a. FOH Control b. Applied FOH c. Spoiled Goods Inventory d. WIP 5. Spoilage occurs as a result of normal production shrinkage in a process cost system, using FIFO costing, the number of equivalent units that production costs should be charged to would be based upon: a. Spoiled Units c. units transferred out, beginning and ending units b. Units transferred out and spoiled units d. units transferred out, spoiled, beginning and ending units 6. The FIFO will produce the same cost of goods manufactured amount in Weighted Average when: a. Beginning inventory is 100% complete c. there is no ending inventory b. Beginning and ending are 50% complete d. there is no beginning inventory 7. The method that allows the addition of beginning inventory costs with cost incurred in the period is: a. FIFO b. Accretion c. LIFO d. Average e. Last in, First Out 8. In a process cost system, using the Weighted Average method, Cost per EUP for a given unit cost component is found by dividing which of the following by EUP? a. Only current period cost c. Current period Cost of beginning b. Current period + Cost of beginning d. Current Period + Cost of Ending 9. The weighted average method is thought by some as inferior to the FIFO method because it: a. Commingles cost of two periods c. Only considers the last units worked in b. Ignores work performed in subsequent periods d. is more difficult to apply 10.EUP calculation for standard process costing are the same as a. Weighted Average b. FIFO c. LIFO d. none of these 11.Ozzie had 4,500 units of WIP at April 1 which were 60% complete as to conversion cost. During April, 15,000 units were completed. At April 30, 6,000 units remained in WIP which were 40% complete as to conversion cost. Direct materials are added at the beginning of the process. How many units were started during April? a. 16,500 b. 15,000 c. 14,700 d. 13,500 e. none of these 12.With the following data for a company using FIFO, compute the EUP for materials and conversion cost: Beginning WIP 15 units (DM-100%, CC 30%); Transferred in 150 units; Transferred out 120 units; Ending WIP 45 units (DM-100%, CC 40%). a. DM 195; CC -179 units c. DM 150, CC - 134 units e . none of these

b. DM 165; CC 149 units d. DM 134, CC 150 units 13.The Romeo Company manufactures the famous DingDong watch on an assembly line basis. January WIP consisted of 5,000 units partially completed. During the month an additional 110,000 units were started and 105,000 units were completed. The ending WIP was 3/5 complete as to conversion costs. Conversion costs are added evenly throughout the process. The following conversion costs were incurred: Beginning Cost P1,500; Total Current Conversion cost P273,920. The conversion costs assigned to Ending WIP totaled to P15,360 using the FIFO method of process costing. What was the percentage of completion as to conversion cost on the 5,000 units in Beginning Work in process? a. 80% b. 60% c. 40% d. 20% e. none of these 14.Sed Incorporated had 8,000 units of WIP in Department A on October 1, 2012. These units were 60% complete as to conversion costs. Materials are added at the beginning of the process. During the month of October, 34,000 units were started and 36,000 units completed. Sed had 6,000 units of WIP on October 31. These units were 80% complete as to conversion costs. By how much did the EUP for the month of October using Weighted Average exceed the EUP for the month October using the FIFO? a. DM 8,000; CC 4,800 c. DM 0; CC 4,800 e. none of these b. DM 8,000; CC 3,200 d. DM 0; CC 3,200 15.Marlon Corporations production cycle starts in the Mixing Department. The following information is available for the month of April 2012: WIP, April 1 (50% complete) 40,000 units; Started in April 240,000 units; WIP, April 30 (60% complete) 25,000 units. Materials are added at the end of the process in the Mixing Department. Using the weighted average method, what are the EUP of production for the month of April? a. DM 280,000; CC 270,000 c. DM 255,000; CC 255,000 e. none of these b. DM 270,000; CC 280,000 d. DM 240,000; CC 250,000 16.Stanley Inc., had 8,000 units or WIP in its Department A on March 1, which were 50% complete as to conversion costs. Materials are introduced at the beginning of the process. During March 17,000 units were started, 18,000 units were completed and there were 2,000 units of normal spoilage. Stanley had 5,000 units of WIP at March 31, which was 60% complete as to conversion costs. Under Stanleys cost system, spoilage units reduce the number of units over which total costs can be spread. Using the Weighted average method, the EUP for March for conversion costs were a. 23,000 b. 21,000 c. 19,000 d. 17,000 e. none of these 17.Kiray CO. had the following production for the month of June: WIP June 1 10,000 units; Started during June 40,000 units; Completed and transferred 33,000 units; Abnormal spoilage 2,000 units; WIP- June 30 15,000 units. Materials are added at the end of the process. As to conversion cost, the beginning work in process was 70% completed and the ending WIP was 60% completed. Spoilage is detected at the end of the process. Using the weighted average method, the equivalent units for June, with respect to the conversion costs, were a. 50,000 b. 45,000 c. 44,000 d. 42,000 e. none of these 18.A company manufactures a product that passes through two production departments, molding and assembly. Direct materials are added in the assembly department when conversion is 50% complete. Conversion costs are incurred uniformly. The activity in units for the assembly department during April is as follows: WIP, April 1 (CC- 60% complete) 5,000 units; Transferred in 32,000 units; Defective units at final inspection (within normal limits) 2,500 units; Transferred out 28,500 units; WIP, April30 (CC- 40% complete) 6,000 units. The number of EUP for direct materials in the assembly department for April calculated on the weighted average basis is: a. 37,000 units b. 34,000 units c. 31,000 units d. 26,000 unit e. none of these 19.Lea Company adds materials in the beginning of the process in the Forming Department, which is the first of two stages of its production. Information concerning the materials used in the Forming Department is as follows: WIP beg 6,000 units and P3,000 cost; Units started during the period 50,000 units and P25,000 cost; Units completed and

transferred 44,000 units. Using the weighted average method, what was the material cost of work in process at the end of the month? a. P6,120 b. P6,000 c. P5,520 d. P3,060 e. none of these 20.The Forming Department is the first of a two-stage production process. Spoilage is identified when the units have completed the Forming process. Costs of spoiled units are assigned to units completed and transferred to the second department in the period spoilage is identified. The following information concerns Formings conversion costs in May 2012: Units Conversion Costs Beginning WIP (50% 2,00 P10,000 complete) 0 Units started during May 8,00 P75,500 0 Spoilage normal 500 Units completed and 7,00 Transferred 0 Ending WIP (80% complete) 2,50 0 Using the weighted average, what was Formings conversion cost transferred to the second department? a. P71,250 b. P67,500 c. P64,125 d. P59,850 e. none of these JOINT AND BY PRODUCT 21.The allocation of Joint Cost to individual products used primarily to: a. Deciding whether to sell at the SOP c. inventory costing b. Determining the best market price d. determining whether to produce one of the joint products 22.In a joint production process, a by- product is also described as: a. A simultaneously produced product of relatively low value b. A form of main product with controllable production proportions c. Waste d. Products of low value recovered at the end of a production process 23.All of the following are methods of costing by-products except the: a. Average unit cost method c. Recognition of net revenue method b. Recognition of gross revenue method d. market value method 24.All of the following are methods of allocating joint products costs except the: a. Recognition of net revenue method c. quantitative unit method b. Average cost method d. market value method 25.If a company obtains two salable products from the refining of one ore, the refining process should be accounted as: a. Extractive process b. Joint Process c. Mixed cost process d. Depletion process 26.The characteristic that is most often used to distinguish a product as either joint or byproduct is the: a. Amount of labor b. Separate Cost c. sales value d. none of these 27.Which of the following methods of allocating costs use market based data? a. Sales value at split off method c. the constant gross margin percentage method b. Estimated NRV method d. all of the above 28.When a product is the result of a joint process, the decision to process the product past the split off point further should be influenced by a. The extra operating income earned past the split off point b. The extra revenue earned past the split off point c. The portion of the joint cost allocated to individual products d. The total amount of joint cost 29.All costs incurred beyond the split off point are called

a. By product cost b. joint cost c. main cost d. separable cost d. selling cost 30.What type of cost is the result of an event that results in more than one product or service simultaneously? a. By product cost b. joint cost c. main cost d. separable cost d. selling cost 31.Jojo Corporation manufactures products S and T from a joint process. The sales value at split off was P50,000 for 6,000 units of Product S and P25,000 for 2,000 units of Product T. Assuming that the portion of the total joint costs properly allocated to Product S using the relative-sales value at split off approach was P30,000, what were the total joint costs? a. P60,000 b. P45,000 c. P42,000 d. P40,000 e. none of these 32.Laika Inc manufactures product P, Q and R from a joint process. Additional Information is as follows. P Q R Total Units Produced 4,000 2,000 1,000 7,000 Joint Cost P36,000 ? ? P60,000 Sales Value at ? ? P15,000 P100,000 SOP Separate Cost P7,000 P5,000 P3,000 P15,000 Final Selling P70,000 P30,000 P20,000 P120,000 Price Assuming the joint cost is allocated using the relative sales value at split off approach, what were the joint costs allocated to Product Q and R? a. Q P16,000 ; R P8,000 c. Q P14,400; R P9,600 e. none of the above b. Q P15,000; R P9,000 d. Q P 12,00; R P12,000 33.Based on Laika Inc, Assuming the company uses Approximated NRV, how much total production cost incurred under joint process to Product P? P36,000 34.Wong Manufacturing purchases trees from Cascara Lumber and process them up to the split off point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company and distribute them to retail outlets. The following information was collected for the month. Trees Processed: 75 trees (yield is 45,000 sheets of paper and 45,000 pencil casings and scrap) Production: Paper 45,000 sheets; Pencil Casings 45,000 Sales: Paper 43,500 sheets @ P0.04 per page; Pencil casing 45,000 @ P0.10 per casing Cost of purchasing 75 trees to process the joint products is P2,250. Wong reported no beginning inventory and ending inventory of 1,500 sheets of paper. What is the sales value at the SOP for paper? a. P2,925 b. P1,800 c. P1,740 d. P180 e. none of the above 35.Based on Wong Manufacturing, what is the sales value at SOP of the pencil casings? a. P5,625 b. P4,500 c. P2,220 d. P450 e. none of these 36.Based on Wong Manufacturing, If the sales value at Split off point is used, what is the approximate cost of ending inventory for paper? a. P1,125 b. P652.50 c. P75 d. P21.435 e. none of these 37.Based on Wong Manufacturing, If the sales Value at Split off point is used, what is the approximate production cost for each pencil casing? a. P0.0357 b. P0.0335 c. P0.0255 d. 0.0250 e. none of these 38. Kobe Co. manufactures a major product that gives rise to by-product called May. Mays only separable cost is a P1 selling cost when a unit is sold for P4. Kobe accounts for Mays sales by deducting the P3 net amount from the cost of good sold of the major product. There are no inventories. If Kobe were to change its method of accounting for May from a by-product to a joint cost product, what would be the effect on Kobes overall gross margin? a. No effect b. Gross margin increases by P1 for each unit of May sold c. Gross margin increases by P3 for each unit of May sold

d. Gross Margin increases by P4 for each unit of May sold 39.Kite Co. manufactures X an Y from a joint process that also yields a by-product Z. Revenue from sales of Z is treated as a reduction of joint cost. Additional Information is as follows: X Y Z Total Units Produced 20,000 20,000 10,000 50,000 Joint Costs ? ? ? P262,000 Sales Value @ P300,000 P150,000 P10,000 P460,000 SOP Joint cost were allocated using the sales value at split off approach. The joint costs allocated to product X were: a. P168,000 b. P150,000 c. P100,000 d. P75,000 e. none of the above 40.Based on Kite Co., if no amount of joint cost allocated to by-product, how much joint cost will be allocated to product Y using the sales value at split off point? P87,333