Abc and Sda

Smithson Company
Smithson Company produces two products (A and B). Direct material and labor costs for Product A total
$35 (which reflects 4 direct labor hours); direct material and labor costs for Product B total $22 (which
reflects 1.5 direct labor hours). Three overhead functions are needed for each product. Product A uses 2
hours of Function 1 at $10 per hour, 1 hour of Function 2 at $7 per hour, and 6 hours of Function 3 at $18
per hour. Product B uses 1, 8, and 1 hours of Functions 1, 2, and 3, respectively. Smithson produces 800
units of A and 8,000 units of B each period.
70. Refer to Smithson Company If total overhead is assigned to A and B on the basis of units produced,
Product A will have an overhead cost per unit of
a. $ 88.64.
b. $123.64.
c. $135.00.
d. None of the responses are correct.
ANS: A
Total Overhead
Product A Function Hourly Hours Total
Rate
1 $ 10 2 $ 20
2 $ 7 1 $ 7
3 $ 18 6 $ 108
Totals 9 $ 135
Product B Function Hourly Hours Total

Rate
1 $ 10 1 $ 10
2 $ 7 8 $ 56
3 $ 18 1 $ 18
Totals 10 $ 84
OH/Unit Units Total

Produced
$ 135 800$ 108,000
$ 84 8000$ 672,000
$ 780,000
Total OH Proportion Allocated Units OH per
OH Produced Unit
$ 780,000 0.090909091 $ 70,909.09 800 $ 88.64
(800/8800)
DIF: Moderate OBJ: 5-3

71. Refer to Smithson Company If total overhead is assigned to A and B on the basis of units produced,
Product B will have an overhead cost per unit of
a. $84.00.
b. $88.64.
c. $110.64.
ANS: B
See #70 for Total Overhead Computations
OH Produced Unit
$ 780,000 0.909090909 $ 709,090.91 8000 $ 88.64
(8000/8800)
72. Refer to Smithson Company If total overhead is assigned to A and B on the basis of direct labor hours,
Product A will have an overhead cost per unit of
a. $51.32.
b. $205.28.
c. $461.88.
ANS: B
Product DL Hrs/Unit Units Produced Total DL

Hours
A 4 800 3200
B 1.5 8000 12000
15200

OH Produced Unit
$ 780,000 0.210526316 $ 164,210.53 800 $ 205.28
(3,200/15,200)

73. Refer to Smithson Company If total overhead is assigned to A and B on the basis of direct labor hours,
Product B will have an overhead cost per unit of
a. $51.32.
b. $76.98.
c. $510.32.
ANS: B
See #72 for Direct Labor Computations

OH Produced Unit
$ 780,000 0.789473684 $ 615,789.47 8000 $ 76.98
(12,000/15,200)
74. Refer to Smithson Company If total overhead is assigned to A and B on the basis of overhead activity
hours used, the total product cost per unit assigned to Product A will be
a. $86.32.
b. $95.00.
c. $115.50.
ANS: C
Total OH Proportion Allocated Units OH per DM and Total

OH Produced Unit DL/Unit
$ 780,000 0.082568807 $ 64,403.67 800 $ 80.50 $ 35.00 $ 115.50
(7,200/87,200)
75. Refer to Smithson Company If total overhead is assigned to A and B on the basis of overhead activity
hours used, the total product cost per unit assigned to Product B will be
a. $115.50.
b. $73.32.
c. $34.60.
ANS: D
Total OH Proportion Allocated Units OH per DM and Total

OH Produced Unit DL/Unit
$ 780,000 0.917431193 $ 715,596.33 8000 $ 89.44 $ 22.00 $ 111.44
(80,000/87,200)

Phelps Company
Phelps Company produces 50,000 units of Product Q and 6,000 units of Product Z during a period. In that
period, four set-ups were required for color changes. All units of Product Q are black, which is the color
in the process at the beginning of the period. A set-up was made for 1,000 blue units of Product Z; a set-
up was made for 4,500 red units of Product Z; a set-up was made for 500 green units of Product Z. A set-
up was then made to return the process to its standard black coloration and the units of Product Q were
run. Each set-up costs $500.
76. Refer to Phelps Company. If set-up cost is assigned on a volume basis for the department, what is the
approximate per-unit set-up cost for Product Z?
a. $.010.
b. $.036.
c. $.040.
ANS: B
Total setup cost: $500 x 4 = $2,000
$2,000/56,000 = $0.0357
77. Refer to Phelps Company. If set-up cost is assigned on a volume basis for the department, what is the
approximate per-unit set-up cost for the red units of Product Z?
a. $.036.
b. $.111.
c. $.250.
ANS: A
Total setup cost: $500 x 4 = $2,000
$2,000/56,000 = $0.0357
78. Refer to Phelps Company. Assume that Phelps Company has decided to allocate overhead costs using
levels of cost drivers. What would be the approximate per-unit set-up cost for the blue units of Product Z?
a. $.04.
b. $.25.
c. $.50.
ANS: C
Setup cost for blue units = $500.00
Number of blue units produced = 1,000
$500/1,000 = $.50
79. Refer to Phelps Company. Assume that Phelps Company has decided to allocate overhead costs using
levels of cost drivers. What would be the approximate per-unit set-up cost for the green units of Product
Z?
a. $1.00.
b. $0.25.
c. $0.04.
ANS: A
Setup cost = $500.00

Units produced = 500
$500.00/500 = $1.00/unit
Lafayette Savings and Loan
Lafayette Savings and Loan had the following activities, traceable costs, and
physical flow of driver units:
Traceable Physical flow of

Activities Costs Driver Units
Open new accounts $50,000 1,000 accounts

Process deposits 36,000 400,000 deposits
Process withdrawals 15,000 200,000 withdrawals
Process loan applications 27,000 900 applications
The above activities are used by the Jennings branch and the Crowley branch:
Jennings Crowley
New accounts 200 400

Deposits 40,000 20,000
Withdrawals 15,000 18,000
Loan applications 100 160
80. Refer to Lafayette Savings and Loan. What is the cost per driver unit for new account activity?
a. $0.09 c. $30.00
b. $0.075 d. $50.00
ANS: D
$50,000 / 1,000 = $50.00 per account
DIF: Easy OBJ: 5-4

81. Refer to Lafayette Savings and Loan. What is the cost per driver unit for the deposit activity?
a. $0.09 c. $30.00
b. $0.075 d. $50.00
ANS: A
$36,000/400,000 = $0.09
DIF: Easy OBJ: 5-4
82. Refer to Lafayette Savings and Loan. What is the cost per driver unit for the withdrawal activity?
a. $0.09 c. $30.00
b. $0.075 d. $50.00
ANS: B
$15,000/200,000 = $0.075
DIF: Easy OBJ: 5-4
83. Refer to Lafayette Savings and Loan. What is the cost per driver unit for the loan application activity?
a. $0.09 c. $30.00
b. $0.075 d. $50.00
ANS: C
$27,000/900 = $30.00
DIF: Easy OBJ: 5-4
84. Refer to Lafayette Savings and Loan. How much of the loan application cost will be assigned to the
Jennings branch?
a. $3,000 c. $ 7,800
b. $4,800 d. $27,000
ANS: A
$30.00 x 100 = $3,000
DIF: Easy OBJ: 5-4
85. Refer to Lafayette Savings and Loan. How much of the deposit cost will be assigned to the Crowley
branch?
a. $1,800 c. $ 5,400
b. $3,600 d. $36,000
ANS: A
$0.09 * 20,000 = $1,800
DIF: Easy OBJ: 5-4

86. Refer to Lafayette Savings and Loan. How much of the new account cost will be assigned to the Crowley
branch?
a. $10,000 c. $30,000
b. $20,000 d. $50,000
ANS: B
400 * $50 = $20,000
DIF: Easy OBJ: 5-4
Hazel Company uses activity-based costing. The company produces two products: coats and hats. The
annual production and sales volume of coats is 8,000 units and of hats is 6,000 units. There are three
activity cost pools with the following expected activities and estimated total costs:
Activity Estimated Expected Expected

Cost Pool Cost Activity Activity
Coats Hats Total
Activity 1 $20,000 100 400 500
Activity 2 $37,000 800 200 1,000
Activity 3 $91,200 800 3,000 3,800
87. Refer to Hazel Company. Using ABC, the cost per unit of coats is approximately:
a. $2.40 c. $ 6.60
b. $3.90 d. $10.59
ANS: C
Activity Cost Allocation Cost per Unit
1 $20,000 * 100/500 = $ 4,000 / 8,000 $0.50
2 $37,000 * 800/1,000 = $29,600 / 8,000 3.70
3 $91,200 * 800/3,800 = $19,200 / 8,000 2.40
Total Cost per Unit 6.60
DIF: Difficult OBJ: 5-4
88. Refer to Hazel Company. Using ABC, the cost per unit of hats is approximately:
a. $2.40 c. $12.00
b. $3.90 d. $15.90
ANS: D
Activity Cost Allocation Cost per Unit
1 $20,000 * 400/500 = $ 16,000 / 6,000 $2.67
2 $37,000 * 200/1,000 = $ 7,400/ 6,000 1.23
3 $91,200 * 3,000/3,800 = $72,000 / 6,000 12.00
Total Cost per Unit 15.90

Long Company transferred 5,500 units to Finished Goods Inventory during September. On September 1, the
company had 300 units on hand (40 percent complete as to both material and conversion costs). On June
30, 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 September was:
a. 5,200.
b. 5,380.
c. 5,500.
d. 6,300.
ANS: A
Units Transferred Out 5,500
Less: Units in Beginning Inventory (300)
Units Started and Completed 5,200
DIF: Easy OBJ: 6-2

48. Green Company started 9,000 units in February. 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 1,500
Add: Units Started 9,000
Deduct: Units Transferred Out 7,000
Ending Work in Process 3,500
DIF: Easy OBJ: 6-2
49. Bush Company had beginning Work in Process Inventory of 5,000 units that were 40 percent complete as
to conversion costs. X 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

50. Dixie Company uses a weighted average process costing system. Material is added at the start of
production. Dixie Company started 13,000 units into production and had 4,500 units in process at the start
of the period that were 60 percent complete as to conversion costs. If Dixie transferred out 11,750 units,
how many units were in ending Work in Process Inventory?
a. 1,250
b. 3,000
c. 3,500
d. 5,750
ANS: D

DIF: Easy OBJ: 6-2

51. Taylor Company uses a weighted average process costing system and started 30,000 units this month.
Taylor 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 12,000 20% 2,400
+ Completion of Units in Process 12,000 80% 9,600
+ Units Started and Completed 27,000 100% 27,000
+ Ending Work in Process 3,000 40% 1,200
Equivalent Units of Production 40,200
DIF: Easy OBJ: 6-2,6-3
52. Kerry Company makes small metal containers. The company began December 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
ANS: D
Beginning Work in Process 250 40% 100

+ Completion of Units in Process 250 60% 150
DIF: Moderate OBJ: 6-2,6-3
53. Mehta Company Co. 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.
54. Julia Company makes fabric-covered hatboxes. The company began September 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 September 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) 500 0% -

+ Completion of Units in Process 500 20% 100
+ Ending Work in Process 350 70% 245
Reed Company
Reed Company. has the following information for November:
Beginning Work in Process Inventory

(70% complete as to conversion) 6,000 units
Started 24,000 units
Ending Work in Process Inventory
Beginning WIP Inventory Costs:

Material $23,400
Conversion 50,607
Current Period Costs:

Material $31,500
Conversion 76,956
All material is added at the start of the process and all finished products are transferred out.
55. Refer to Reed Company. How many units were transferred out in November?
a. 15,500
b. 18,000
c. 21,500
d. 24,000
ANS: C

DIF: Easy OBJ: 6-2
56. Refer to Reed Company. 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 $ 23,400
Current Period 31,500
54,900 ÷ 30,000 = $ 1.83
units

57. Refer to Reed Company. 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) $ -
$ 76,956
Equivalent Units
Beginning Inventory (6,000 * 1,800
30%)
Started and Completed (15,500) 15,500
Ending Inventory (8,500 * 10%) 850
18,150 equivalent units
Cost per equivalent unit $ 4.24
Holiday Company
The Holiday Company 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 $1,000
Conversion 1,500
Current Costs:
Material $3,200
Conversion 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 $1,170
Material 4,320
Conversion 6,210
Current Period:
Transferred In ?
Material $67,745
Conversion 95,820
58. Refer to Holiday Company. 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 500

Wreaths started and completed 4400
4900
DIF: Easy OBJ: 6-2
59. Refer to Holiday Company. What was the cost transferred out of Forming during the month?
a. $5,341
b. $6,419
c. $8,245
d. $8,330
ANS: D
Units
Transferred Cost per
Out Eq. Unit Total
4,900 1.70 $8,330
60. Refer to Holiday Company. 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.

equivalent units in Decorating for material.
a. 7,970
b. 8,000
c. 8,330
d. 8,450
ANS: A
Materials: Decorating: FIFO Units % Eqiv.

Complete Units
12
equivalent units in Decorating for conversion.
a. 7,925
b. 7,985
c. 8,360
d. 8,465
ANS: B
Conversion: Decorating: Units % Equiv.

FIFO Complete Units

Equivalent Units of
Production 7,985

63. Refer to Holiday Company. 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 Equiv Cost/

Costs Units Equiv
Unit
$67,745 7,970 $8.50
64. Refer to Holiday Company. 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 Equiv Cost/

Costs Units Equiv
Unit
$95,820 7,985 $12.00
65. Refer to Holiday Company. 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 Percent to Cost per

Beg Inv Units Complete Unit Total
Materials 600 20% $8 $960
Conversion 600 10% $15 $900
Total Costs to Complete $1,860
Ryan Company
Ryan Company adds material at the start to its production process and has the following information
available for March:

Started this period 32,000 units
Transferred out ?
66. Refer to Ryan Company. Compute the number of units started and completed in March.
a. 29,500
b. 34,500
c. 36,500
d. 39,000
ANS: A
Units started this period 32,000

Less: Ending Work in Process 2,500
Units started and completed this period 29,500
67. Refer to Ryan Company. Calculate equivalent units of production for material using FIFO.
a. 32,000
b. 36,800
c. 37,125
d. 39,000
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.
68. Refer to Ryan 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
Beginning Inventory (7,000 * 60%) 4,200
69. Refer to Ryan 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
Beginning Inventory (7,000 units) 7,000
Started this Period (32,000) 32,000
70. Refer to Ryan 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
Maxwell Company
Maxwell Company adds material at the start of production. The following production information is
available for June:

Started this period 120,000 units
Beginning Work in Process Inventory Costs:

Material $24,500
Conversion 68,905
Current Period Costs:
Material $ 75,600
Conversion 130,053
71. Refer to Maxwell Company. How many units must be accounted for?
a. 118,200
b. 128,200
c. 130,000
d. 138,200
ANS: C
Units Started 120,000
Total Units 130,000
DIF: Easy OBJ: 6-2
72. Refer to Maxwell 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 $ 24,500

BWIP: Conversion 68,905
Current Period: Materials 75,600
Current Period: Conversion 130,053
Total Costs $299,058
DIF: Easy OBJ: 6-2
73. Refer to Maxwell 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 120,000

Less: Ending Work in Process 8,200
Units started and completed this period 111,800
DIF: Easy OBJ: 6-2

74. Refer to Maxwell 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
Ending Inventory (8,200 * 25%) 8,200
DIF: Easy OBJ: 6-3
75. Refer to Maxwell 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) 0
Ending Inventory (8,200 * 25%) 8,200
DIF: Easy OBJ: 6-4
76. Refer to Maxwell 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
ANS: C


77. Refer to Maxwell 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) 10,000 0% -

78. Refer to Maxwell 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 $ 24,500
100,100 ÷ 130,000 = $ 0.77
units per unit
79. Refer to Maxwell 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
ANS: B
Conversion Costs:
Beginning $ 68,905
198,958 ÷ 128,360 = $ 1.55
units per unit

80. Refer to Maxwell Company. What is the cost of units completed using the weighted average?
a. $237,510
b. $266,742
c. $278,400
d. $282,576
ANS: D
Units Completed Costs per Equivalent Unit Total

121,800 (1.55 + .77) = $2.32 $282,576
81. Refer to Maxwell 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)
130,053 ÷ 123,860 = $ 1.05
units per unit
82. Refer to Maxwell 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
Units Completed Costs per Equivalent Unit Total

121,800 (1.05 + .63) = $1.68 $204,624

Cherub Co.
Beginning inventory (30% complete as to Material B 700 units
and 60% complete for conversion)
Started this cycle 2,000 units
Ending inventory (50% complete as to Material B and 500 units
80% complete for conversion)
Beginning inventory costs:

Material A $14,270
Material B 5,950
Conversion 5,640
Current Period costs:

Material A $40,000
Material B 70,000
Conversion 98,100
Material A is added at the start of production, while Material B is added uniformly throughout the
process.
83. Refer to Cherub Company. Assuming a weighted average method of process costing, compute EUP units
for Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,240 and 2,700, respectively
ANS: B
Weighted Average Material A Material B

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

Beginning Work in Process 0 490
Units Started and Completed 1500 1500
Ending Work in Process 500 250
EUP Materials 2000 2240
85. Refer to Cherub Company Assuming a weighted average method of process costing, compute EUP for
conversion.
a. 2,600
b. 2,180
c. 2,000
d. 2,700
ANS: A
Weighted Average
Beginning Work in Process 700
Units Started and Completed 1500
Ending Work in Process 400
2600
86. Refer to Cherub Company Assuming a FIFO method of process costing, compute EUP for conversion.
a. 2,240
b. 2,180
c. 2,280
d. 2,700
ANS: B
FIFO
Beginning Work in Process (700 * 40%) 280
Units Started and Completed 1500
Ending Work in Process (500 * 80%) 400
2180
87. Refer to Cherub Company Assuming a weighted average method of process costing, compute the average
cost per unit for Material A.
a. $20.10
b. $20.00
c. $31.25
d. $31.00
ANS: A
Weighted Average: Material A

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

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

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

(Beginning Units per EUP
Inventory and
Current Period)
$75,950 2,450 $31.00

EUP for conversion.
a. $45.50
b. $45.00
c. $43.03
d. $47.59
ANS: B
Conversion Costs Equivalent Average Cost
$98,100 2,180 $45.00
cost per EUP for conversion.
a. $39.90
b. $45.00
c. $43.03
d. $47.59
ANS: A
Conversion Costs Equivalent Average Cost
(Beginning WIP and Units per EUP
Current Period)
$98,100 + $5,640 2,600 $39.90
Talmidge Company
The following information is available for Talmidge Company for the current year:
Beginning Work in Process Costs of Beginning Work in Process:

(75% complete) 14,500 units Material $25,100
Started 75,000 units Conversion 50,000
Ending Work in Process Current Costs:
(60% complete) 16,000 units Material $120,000
Abnormal spoilage 2,500 units Conversion 300,000
Normal spoilage 5,000 units
(continuous)
Transferred out 66,000 units
All materials are added at the start of production.

93. Refer to Talmidge Company. 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 Units % Complete Eq. Units

+ Abnormal Spoilage 2,500 100% 2,500
DIF: Easy OBJ: 6-2,6-3,6-8
94. Refer to Talmidge Company. 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 Units % Complete Eq Units

DIF: Easy OBJ: 6-2,6-3,6-8
95. Refer to Talmidge Company. 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 $ 25,100
145,100 ÷ 84,500 = $ 1.72
units per unit

96. Refer to Talmidge Company. 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 $ 50,000
350,000 ÷ 78,100 = $ 4.48
units per unit
97. Refer to Talmidge Company. 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.
DIF: Easy OBJ: 6-8
98. Refer to Talmidge Company. 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 Cost per Total

Units Equivalent Unit
16,000 $1.75 $28,000
9,600 $4.55 $43,680
$71,680

99. Refer to Talmidge Company. 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 - 0% -
DIF: Easy OBJ: 6-2,6-4,6-8
100. Refer to Talmidge Company. Using FIFO, what are equivalent units for conversion costs?
a. 72,225
b. 67,225
c. 69,725
d. 78,100
ANS: B
Conversion: FIFO
DIF: Easy OBJ: 6-2,6-3,6-8
101. Refer to Talmidge Company. 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 = $ 1.71
units per unit

102. Refer to Talmidge Company. 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

300,000 ÷ 67,225 = $ 4.46
units per unit
103. Refer to Talmidge Company. 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 Equiv Cost per Total

Units Equiv Unit
+ Completion of Beginning Inventory (14,500 * 25%) 3,625 4.75 17,219
+Units Started and Completed 51,500 6.25 321,875
DIF: Difficult OBJ: 6-2,6-4
Bowman Company
Bowman Company has the following information for July:
Units started 100,000 units

Beginning Work in Process: (35% complete) 20,000 units
Normal spoilage (discrete) 3,500 units
Abnormal spoilage 5,000 units
Ending Work in Process: (70% complete) 14,500 units
Material $15,000
Conversion 10,000
All materials are added at the start of the production process. Bowman Company inspects goods at 75
percent completion as to conversion.
104. Refer to Bowman Company. 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
+ Normal Spoilage--Discrete 3,500 100% 3,500
DIF: Moderate OBJ: 6-2,6-4,6-8
105. Refer to Bowman Company. 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
+Normal Spoilage--Discrete 3,500 75% 2,625
106. Refer to Bowman Company. 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 5,000 * $1.00/unit $5,000

Conversion Costs 3,750 * $1.50/unit 5,625
Total Abnormal Spoilage $10,625
$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
+ Completion of Beginning Inventory (20,000 * 65%) 13,000 1.50 19,500
+ Units Started and Completed 77,000 2.50 192,500
+Normal Spoilage--Discrete-Materials 3,500 1.00 3,500
+Normal Spoilage--Discrete-Conversion 2,625 1.50 3,938
DIF: Difficult OBJ: 6-2,6-4,6-8
108. Refer to Bowman Company. 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
ANS: C
Materials: Weighted Average
+ Normal Spoilage--Discrete 3,500 100% 3,500
DIF: Easy OBJ: 6-2,6-3,6-8
109. Refer to Bowman Company. 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

+Normal Spoilage--Discrete 3,500 75% 2,625
DIF: Easy OBJ: 6-2,6-3,6-8
$1.50, respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it
assigned?
Value Assigned To
a. $7,437.50 Units transferred out and Ending Inventory

b. $7,437.50 Units transferred out
c. $8,750.00 Units transferred out and Ending Inventory
d. $8,750.00 Units transferred out
ANS: B
Equivalent Cost per Total
Units Equivalent Unit
3,500 $1.00 $3,500.00
2,625 $1.50 3,937.50
$7,437.50
This amount is transferred out.
DIF: Easy OBJ: 6-2,6-3,6-8
$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 $1.00 $ 14,500.00
Conversion (14,500 * 70%) 10,150 1.50 15,225.00
Total $ 29,725.00

Jones Company
The following information is available for Jones Company for April:
Started this month 80,000 units

Beginning WIP
(40% complete) 7,500 units
Normal spoilage (discrete) 1,100 units
Abnormal spoilage 900 units
Ending WIP
(70% complete) 13,000 units

Material $10,400
Conversion 13,800
Current Costs:
Material $120,000
Conversion 350,000
All materials are added at the start of production and the inspection point is at the end of the process.
112. Refer to Jones Company. 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

65,
+ Units Started and Completed 000 100% 65,000
13,
+ Ending Work in Process 000 100% 13,000
1,
+ Normal Spoilage (discrete) 100 100% 1,100
+ Abnormal Spoilage 900 100% 900

113. Refer to Jones Company. 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
Conversion: FIFO %
Units Complete EUP
7,
Beginning Work in Process 500 60% 4,500
65,
13,
1,

114. Refer to Jones Company. 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 Units % EUP

Complete
7
Beginning Work in Process 7,500 100% ,500
65,
13,
1,

DIF: Easy OBJ: 6-2,6-3,6-8

115. Refer to Jones Company. 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 %
Units Complete EUP
7,
Beginning Work in Process 500 100% 7,500
65,
13,
1,

DIF: Easy OBJ: 6-2,6-3,6-8
116. Refer to Jones Company. 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

120,000 ÷ 80,000 = $ 1.50
units per unit
117. Refer to Jones Company. 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

350,000 ÷ 80,600 = $ 4.34
units per unit
118. Refer to Jones Company. 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 $ 10,400
130,400 ÷ 87,500 = $ 1.49
units per unit
119. Refer to Jones Company. 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 $ 13,800
363,800 ÷ 83,600 = $ 4.35
units per unit
120. Refer to Jones Company. 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 13,000 $ 1.50 $ 19,500.00

9,1
Conversion (13,000 * 70%) 00 4.34 39,494.00
Total $ 58,994.00

121. Refer to Jones Company. What is the cost assigned to abnormal spoilage using FIFO?
a. $1,350
b. $3,906
c. $5,256
d. $6,424
ANS: C
Abnormal Price per

Spoiled Units Equivalent
Unit Total
900 $5.84 $5,256
122. Refer to Jones Company. 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 Price per

Spoiled Equivalent
Units Unit Total
1,100 $5.84 $6,424
Transferred
Out
123. Refer to Jones Company. 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
Price per
Goods Equivalent
Transferred Out Unit Total
73,600 $5.84 $429,824
DIF: Difficult OBJ: 6-2,6-3

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Smithson Company

Product B Function Hourly Hours Total

OH/Unit Units Total

DIF: Moderate OBJ: 5-3

DIF: Moderate OBJ: 5-3

Product DL Hrs/Unit Units Produced Total DL

Total OH Proportion Allocated Units OH per

DIF: Moderate OBJ: 5-3

See #72 for Direct Labor Computations

Total OH Proportion Allocated Units OH per

DIF: Moderate OBJ: 5-3

Total OH Proportion Allocated Units OH per DM and Total

DIF: Moderate OBJ: 5-3

Total OH Proportion Allocated Units OH per DM and Total

DIF: Moderate OBJ: 5-3

DIF: Moderate OBJ: 5-3

DIF: Moderate OBJ: 5-3

Number of blue units produced = 1,000

Setup cost = $500.00

DIF: Moderate OBJ: 5-3

Lafayette Savings and Loan

Traceable Physical flow of

Open new accounts $50,000 1,000 accounts

New accounts 200 400

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

DIF: Easy OBJ: 5-4

Activity Estimated Expected Expected

DIF: Difficult OBJ: 5-4

DIF: Difficult OBJ: 5-4

DIF: Easy OBJ: 6-2

DIF: Easy OBJ: 6-2

Beginning Work in Process 5,000

DIF: Moderate OBJ: 6-2

Beginning Work in Process 4,500

DIF: Easy OBJ: 6-2

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

Beginning Work in Process 250 40% 100

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

Beginning Work in Process (Ignored for FIFO) 500 0% -

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

Reed Company. has the following information for November:

Beginning Work in Process Inventory

Beginning WIP Inventory Costs:

Current Period Costs:

Beginning Work in Process 6,000

DIF: Easy OBJ: 6-2

DIF: Moderate OBJ: 6-3

Cost per equivalent unit $ 4.24

DIF: Moderate OBJ: 6-4

Beginning Work in Process Costs:

Wreaths completed from BWIP 500

DIF: Easy OBJ: 6-2

DIF: Moderate OBJ: 6-3

DIF: Moderate OBJ: 6-4

Materials: Decorating: FIFO Units % Eqiv.

+ Units Started and Completed 7,700 100% 7,700

+ Ending Work in Process 300 50% 150

Equivalent Units of Production 7,970