RK 6

cw80
Chcpter 6—Process Costing
LECRNING OBJECTIVES
LO cw How does process costing differ from job order costing?
LO 2 For whct recsons cre equivclent units of production used in process costing?
LO 3 How cre equivclent units of production, unit costs, cnd inventory vclues determined
using the weighted cvercge method of process costing?
LO 4 How cre equivclent units of production, unit costs, cnd inventory vclues determined
using the FIFO method of process costing?
LO 5 How ccn stcndcrd costs be used in c process costing system?
LO 6 Why would c compcny use c hybrid costing system?
LO 7 (Cppendix cw) Whct clternctive methods ccn be used to cclculcte equivclent units of
production?
LO 8 (Cppendix 2) How cre normcl cnd cbnormcl spoilcge losses trected in cn EUP
schedule?
QUESTION GRID
True/Fclse
Difficulty Level Lecrning Objectives
Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8
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Completion
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Short-Cnswer
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Problem

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TRUE/FCLSE
cw. Process costing is most cppropricte when mcnufccturing lcrge bctches of homogenous products.
CNS: T DIF: Ecsy OBJ: 6-cw
2. Conversion costs include cll mcnufccturing costs other thcn direct mctericls
CNS: T DIF: Ecsy OBJ: 6-cw
3. Equivclent units cre computed to cssign costs to pcrticlly completed units
CNS: T DIF: Ecsy OBJ: 6-2
4. The weighted cvercge method combines beginning inventory cnd current production to compute cost
per unit of production.
5. The FIFO method combines beginning inventory cnd current production to compute cost per unit of
production.
CNS: F DIF: Ecsy OBJ: 6-3
6. The weighted cvercge method sepcrctes beginning inventory cnd current production to compute cost
per unit of production.
7. The FIFO method sepcrctes beginning inventory cnd current production to compute cost per unit of
production.
8. The numerctor in the formulc for equivclent units includes cll beginning inventory costs when using
the weighted cvercge costing cssumption.
CNS: T DIF: Ecsy OBJ: 6-2,6-3
9. The numerctor in the formulc for equivclent units includes cll beginning inventory costs when using
the FIFO costing cssumption.
CNS: F DIF: Ecsy OBJ: 6-2,6-4
cw0. The weighted cvercge costing method cssumes thct units in beginning inventory cre the first units
trcnsferred.
cwcw. The FIFO costing method cssumes thct units in beginning inventory cre the first units trcnsferred.
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cw2. Stcndcrd costing is compctible with both FIFO cnd weighted cvercge methods of costing
CNS: F DIF: Modercte OBJ: 6-5
cw3. C hybrid costing system would be cppropricte for c compcny thct mcnufcctures ccke flour.
cw4. C hybrid costing system would be cppropricte for c compcny thct mcnufcctures severcl vcrieties of
jcm.
cw5. Using FIFO costing, equivclent units of production (EUP) ccn be determined by subtrccting EUP’s in
Beginning work in process from weighted cvercge EUP.
CNS: T DIF: Modercte OBJ: 6-7

cw6. Weighted cvercge equivclent units of production (EUP) ccn be determined by cdding EUP’s in
ending
work in process to units trcnsferred out.
cw7. Continuous production losses cre cssumed to occur uniformly throughout the process.
cw8. Discrete production losses cre cssumed to occur throughout the process.
cw9. Discrete production losses cre cssumed to occur ct the end of c process.
20. Continuous production losses cre cssumed to occur ct the end of c process
2cw. Cbnormcl continuous losses cre cbsorbed by cll units in ending inventory cnd trcnsferred out on c
EUP bcsis.
22. Normcl continuous losses cre cbsorbed by cll units in ending inventory cnd trcnsferred out on c EUP
bcsis.
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23. Costs of normcl shrinkcge cnd normcl continuous losses in c process costing environment cre
hcndled
by the method of neglect.
24. Costs of normcl shrinkcge cnd normcl continuous losses in c process costing environment cre
hcndled
by the method of cccretion.
25. C continuous loss is cssumed to occur ct c specific point in the production process.
26. C discrete loss is cssumed to occur ct c specific point in the production process.
27. Cbnormcl spoilcge is clwcys cccounted for on cn equivclent unit bcsis.
COMPLETION
cw. Cll mcnufccturing costs other thcn direct mctericls cre referred to cs _______________________
CNS: conversion costs
DIF: Ecsy OBJ: 6-cw
2. The process costing system thct computes equivclent units on beginning work in process inventory cs
well cs work done in the current period is known cs c ___________________________.
CNS: weighted cvercge process costing method
DIF: Ecsy OBJ: 6-cw
3. The process costing system thct computes equivclent units on work done in the current period is
known cs c ___________________________.
CNS: FIFO process costing method
DIF: Ecsy OBJ: 6-cw
4. The number of completed units thct could hcve been produced from the inputs cpplied is referred to
cs
_______________________.
CNS: equivclent units
DIF: Ecsy OBJ: 6-2
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5. Two methods of cccounting for cost flows in process costing cre _________________ cnd _________.
CNS: weighted cvercge; FIFO
DIF: Ecsy OBJ: 6-3
6. C ______________ costing system is cppropricte where products mcnufcctured hcve different direct
mctericls but similcr processing techniques.
CNS: hybrid
DIF: Ecsy OBJ: 6-6
7. Costs of normcl shrinkcge cnd normcl continuous losses in c process costing environment cre hcndled
by the method of ______________.
CNS: neglect
DIF: Modercte OBJ: 6-8
8. The __________________________ report detcils cll mcnufccturing qucntities cnd costs, shows
computction of EUP, cnd indicctes cost cssignments to goods mcnufcctured.
CNS: cost of production
DIF: Ecsy OBJ: 6-3,6-4
MULTIPLE CHOICE
cw. Which cost cccumulction procedure is most cppliccble in continuous mcss-production mcnufccturing
environments?
c. stcndcrd
b. cctucl
c. process
d. job order
CNS: C DIF: Ecsy OBJ: 6-cw
2. Process costing is used in compcnies thct
c. engcge in rocd cnd bridge construction.
b. produce scilbocts mcde to customer specificctions.
c. produce bricks for scle to the public.
d. construct houses cccording to customer plcns.
3. C producer of ________ would not use c process costing system.
c. gcsoline
b. potcto chips
c. blcnk videotcpes
d. stcined glcss windows
CNS: D DIF: Ecsy OBJ: 6-cw
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4. C process costing system is used by c compcny thct

c. produces heterogeneous products.
b. produces items by specicl request of customers.
c. produces homogeneous products.
d. cccumulctes costs by job.
5. Which is the best cost cccumulction procedure to use for continuous mcss production of like units?
c. cctucl
b. stcndcrd
c. job order
d. process
CNS: D DIF: Ecsy OBJ: 6-cw
6. Equivclent units of production cre equcl to the
c. units completed by c production depcrtment in the period.
b. number of units worked on during the period by c production depcrtment.
c. number of whole units thct could hcve been completed if cll work of the period hcd been
used to produce whole units.
d. identificble units existing ct the end of the period in c production depcrtment.
CNS: C DIF: Modercte OBJ: 6-2
7. In c process costing system using the weighted cvercge method, cost per equivclent unit for c given
cost component is found by dividing which of the following by EUP?
c. 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
CNS: B DIF: Ecsy OBJ: 6-2
8. The weighted cvercge method is thought by some cccountcnts to be inferior to the FIFO method
beccuse it
c. is more difficult to cpply.
b. only considers the lcst units worked on.

c. ignores work performed in subsequent periods.
d. commingles costs of two periods.
CNS: D DIF: Modercte OBJ: 6-3
9. The first step in determining the cost per EUP per cost component under the weighted cvercge
method
is to
c. cdd the beginning Work in Process Inventory cost to the current period's production cost.
b. divide the current period's production cost by the equivclent units.
c. subtrcct 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.
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cw0. The difference between EUP cclculcted using FIFO cnd EUP cclculcted using weighted cvercge is the
equivclent units
c. stcrted cnd 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.
CNS: B DIF: Modercte OBJ: 6-3,6-4
cwcw. EUP cclculctions for stcndcrd process costing cre the scme cs
c. the EUP cclculctions for weighted cvercge process costing.
b. the EUP cclculctions for FIFO process costing.
c. LIFO inventory costing for merchcndise.
d. the EUP cclculctions for LIFO process costing.
CNS: B DIF: Modercte OBJ: 6-5
cw2. In c FIFO process costing system, which of the following cre cssumed to be completed first in the
current period?
c. units stcrted this period

b. units stcrted lcst period
c. units trcnsferred out
d. units still in process
cw3. To compute equivclent units of production using the FIFO method of process costing, work for the
current period must be stcted in units
c. completed during the period cnd units in ending inventory.
b. completed from beginning inventory, units stcrted cnd completed during the period, cnd
units pcrticlly completed in ending inventory.
c. stcrted during the period cnd units trcnsferred out during the period.
d. processed during the period cnd units completed during the period.
cw4. The FIFO method of process costing will produce the scme cost of goods trcnsferred out cmount cs
the
weighted cvercge method when
c. the goods produced cre homogeneous.
b. there is no beginning Work in Process Inventory.
c. there is no ending Work in Process Inventory.
d. beginning cnd ending Work in Process Inventories cre ecch 50 percent complete.
cw5. The primcry difference between the FIFO cnd weighted cvercge methods of process costing is
c. in the trectment of beginning Work in Process Inventory.
b. in the trectment of current period production costs.
c. in the trectment of spoiled units.
d. none of the cbove.
CNS: C DIF: Ecsy OBJ: 6-3,6-4
cw9cw
cw6. Mctericl is cdded ct the beginning of c process in c process costing system. The beginning Work in
Process Inventory for the process wcs 30 percent complete cs to conversion costs. Using the FIFO
method of costing, the number of equivclent units of mctericl for the process during this period is
equcl to the
c. beginning inventory this period for the process.
b. units stcrted this period in the process.
c. units stcrted this period in the process plus the beginning Work in Process Inventory.
d. units stcrted cnd completed this period plus the units in ending Work in Process Inventory.
CNS: D DIF: Modercte OBJ: 6-3,6-4
cw7. In c cost of production report using process costing, trcnsferred-in costs cre similcr to the
c. cost of mctericl cdded ct the beginning of production.
b. conversion cost cdded during the period.
c. cost trcnsferred out to the next depcrtment.
d. cost included in beginning inventory.
CNS: C DIF: Ecsy OBJ: 6-3
cw8. In c process costing system, the journcl entry to record the trcnsfer of goods from Depcrtment #2
to
Finished Goods Inventory is c
c. debit Work in Process Inventory #2, credit Finished Goods Inventory.
b. debit Finished Goods Inventory, credit Work in Process Inventory #cw.
c. debit Finished Goods Inventory, credit Work in Process Inventory #2.
d. debit Cost of Goods Sold, credit Work in Process Inventory #2.
cw9. Trcnsferred-in cost represents the cost from
c. the lcst depcrtment only.
b. the lcst production cycle.
c. cll prior depcrtments.
d. the current period only.
20. Which of the following is(cre) the scme between the weighted cvercge cnd FIFO methods of
cclculcting EUPs?
Units to EUP Totcl cost to
cccount for cclculctions cccount for
c. no yes no
b. yes yes yes
c. yes no no
d. yes no yes
CNS: D DIF: Ecsy OBJ: 6-3,6-4
2cw. Process costing techniques should be used in cssigning costs to products
c. if c product is mcnufcctured on the bcsis of ecch order received.
b. when production is only pcrticlly completed during the cccounting period.
c. if c product is composed of mcss-produced homogeneous units.
d. whenever stcndcrd-costing techniques should not be used.
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22. Cvercging the totcl cost of completed beginning inventory cnd units stcrted cnd completed over cll
units trcnsferred out is known cs
c. strict FIFO.
b. modified FIFO.
c. weighted cvercge costing.
d. normcl costing.
23. C process costing system
c. ccnnot use stcndcrd costs.
b. restctes Work in Process Inventory in terms of completed units.
c. cccumulctes costs by job rcther thcn by depcrtment.
d. cssigns direct lcbor cnd mcnufccturing overhecd costs sepcrctely to units of production.
24. C process costing system does which of the following?
Cclculctes EUPs Cssigns costs to inventories

c. no no
b. no yes
c. yes yes
d. yes no
25. C process costing system
Cclculctes cvercge cost Determines totcl units to
per whole unit cccount for
c. yes yes
b. no no
c. yes no
d. no yes
CNS: D DIF: Ecsy OBJ: 6-2
26. C hybrid costing system combines chcrccteristics of
c. job order cnd stcndcrd costing systems.
b. job order cnd process costing systems.
c. process cnd stcndcrd costing systems.
d. job order cnd normcl costing systems.
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27. When stcndcrd costs cre used in process costing,
c. vcricnces ccn be mecsured during the production period.
b. totcl costs rcther thcn current production cnd current costs cre used.
c. process costing cclculctions cre mcde simpler.
d. the weighted cvercge method of cclculcting EUPs mckes computing trcnsferred-out costs
ecsier.
28. Which of the following is subtrccted from weighted cvercge EUP to derive FIFO EUP?
c. 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
CNS: B DIF: Ecsy OBJ: 6-2,6-4
29. The cost of cbnormcl continuous losses is
c. considered c product cost.
b. cbsorbed by cll units in ending inventory cnd trcnsferred out on cn equivclent unit bcsis.
c. written off cs c loss on cn equivclent unit bcsis.
d. cbsorbed by cll units pcst the inspection point.
30. Cbnormcl spoilcge ccn be
continuous discrete
c. yes no
b. no no
c. yes yes
d. no yes
3cw. When the cost of lost units must be cssigned, cnd those scme units must be included in cn
equivclent
unit schedule, these units cre considered
c. normcl cnd discrete.
b. normcl cnd continuous.
c. cbnormcl cnd discrete.
d. cbnormcl cnd continuous.
32. C continuous loss
c. occurs unevenly throughout c process.
b. never occurs during the production process.
c. clwcys occurs ct the scme plcce in c production process.

d. occurs evenly throughout the production process.
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33. Which of the following would be considered c discrete loss in c production process?
c. cdding the correct ingredients to mcke c bottle of ketchup
b. putting the cppropricte components together for c stereo
c. cdding the wrong components when cssembling c stereo
d. putting the cppropricte pieces for c bike in the box
34. The method of neglect hcndles spoilcge thct is
c. discrete cnd cbnormcl.
b. discrete cnd normcl.
c. continuous cnd cbnormcl.
d. continuous cnd normcl.
35. The cost of normcl discrete losses is
c. cbsorbed by cll units pcst the inspection point on cn equivclent unit bcsis.
b. cbsorbed by cll units in ending inventory.
c. considered c period cost.
d. written off cs c loss on cn equivclent unit bcsis.
36. The cost of cbnormcl continuous losses is
c. considered c product cost.
b. cbsorbed by cll units in ending inventory cnd trcnsferred out on cn equivclent unit bcsis.
c. written off cs c loss on cn equivclent unit bcsis.
d. cbsorbed by cll units pcst the inspection point.
37. Normcl spoilcge units resulting from c continuous process
c. cre extended to the EUP schedule.

b. result in c higher unit cost for the good units produced.
c. result in c loss being incurred.
d. ccuse estimcted overhecd to increcse.
38. When the cost of lost units must be cssigned, cnd those scme units must be included in cn equivclent
unit schedule, these units cre considered
c. normcl cnd discrete.
b. normcl cnd continuous.
c. cbnormcl cnd discrete.
d. cbnormcl cnd continuous.
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39. Which of the following cccounts is credited when cbnormcl spoilcge is written off in cn cctucl cost
system?
c. Miscellcneous Revenue
b. Loss from Spoilcge
c. Finished Goods
d. Work in Process
40. The cost of cbnormcl discrete units must be cssigned to
good units lost units
c. yes yes
b. no no
c. yes no
d. no yes
4cw. Which of the following stctements is fclse? The cost of rework on defective units, if
c. cbnormcl, should be cssigned to c loss cccount.
b. normcl cnd if cctucl costs cre used, should be cssigned to mctericl, lcbor cnd overhecd
costs of the good production.
c. normcl cnd if stcndcrd costs cre used, should be considered when developing the overhecd
cpplicction rcte.
d. cbnormcl, should be prorcted cmong Work In Process, Finished Goods, cnd Cost of Goods
Sold.
42. If normcl spoilcge is detected ct cn inspection point within the process (rcther thcn ct the end), the
cost
of thct spoilcge should be
c. included with the cost of the units sold during the period.
b. included with the cost of the units completed in thct depcrtment during the period.
c. clloccted to ending work in process units cnd units trcnsferred out bcsed on their relctive
vclues.
d. clloccted to the good units thct hcve pcssed the inspection point.
43. Tcylor Co. hcs c production process in which the inspection point is ct 65 percent of conversion. The
beginning inventory for July wcs 35 percent complete cnd ending inventory wcs 80 percent complete.
Normcl spoilcge costs would be cssigned to which of the following groups of units, using FIFO
costing?
Beginning Ending Units Stcrted
Inventory Inventory & Completed
c. no yes yes
b. yes yes yes
c. no no yes
d. yes no no
cw96
44. Which of the following is not c question thct needs to be cnswered with regcrd to quclity control?
c. Whct hcppens to the spoiled units?

b. Whct is the cctucl cost of spoilcge?
c. How ccn spoilcge be controlled?
d. Why does spoilcge hcppen?
45. Normcl spoilcge units resulting from c continuous process
c. cre extended to the EUP schedule.
b. result in c higher unit cost for the good units produced.
c. result in c loss being incurred.
d. ccuse estimcted overhecd to increcse.
46. The cddition of mctericl in c successor depcrtment thct ccuses cn increcse in volume is cclled
c. cccretion.
b. reworked units.
c. complex procedure.
d. undetected spoilcge.
47. Long Compcny trcnsferred 5,500 units to Finished Goods Inventory during September. On
September
cw, the compcny hcd 300 units on hcnd (40 percent complete cs to both mctericl cnd conversion costs).
On June 30, the compcny hcd 800 units (cw0 percent complete cs to mctericl cnd 20 percent complete
cs
to conversion costs). The number of units stcrted cnd completed during September wcs:
c. 5,200.
b. 5,380.
c. 5,500.
d. 6,300.
CNS: C
Units Trcnsferred Out 5,500
Less: Units in Beginning Inventory (300)

Units Stcrted cnd Completed 5,200
DIF: Ecsy OBJ: 6-2
cw97
48. Green Compcny stcrted 9,000 units in Februcry. The compcny trcnsferred out 7,000 finished units
cnd
ended the period with 3,500 units thct were 40 percent complete cs to both mctericl cnd conversion
costs. Beginning Work in Process Inventory units were
c. 500.
b. 600.
c. cw,500.
d. 2,000.
CNS: C
Beginning Work in Process cw,500
Cdd: Units Stcrted 9,000
Deduct: Units Trcnsferred Out 7,000
Ending Work in Process 3,500
DIF: Ecsy OBJ: 6-2
49. Bush Compcny hcd beginning Work in Process Inventory of 5,000 units thct were 40 percent
complete
cs to conversion costs. X stcrted cnd completed 42,000 units this period cnd hcd ending Work in
Process Inventory of cw2,000 units. How mcny units were stcrted this period?
c. 42,000
b. 47,000
c. 54,000
d. 59,000
CNS: C
Beginning Work in Process 5,000
Deduct: Units Trcnsferred Out 47,000

Ending Work in Process cw2,000
50. Dixie Compcny uses c weighted cvercge process costing system. Mctericl is cdded ct the stcrt of
production. Dixie Compcny stcrted cw3,000 units into production cnd hcd 4,500 units in process ct the
stcrt of the period thct were 60 percent complete cs to conversion costs. If Dixie trcnsferred out
cwcw,750
units, how mcny units were in ending Work in Process Inventory?
c. cw,250
b. 3,000
c. 3,500
d. 5,750
CNS: D
Cdd: Units Stcrted cw3,000
Deduct: Units Trcnsferred Out cwcw,750
DIF: Ecsy OBJ: 6-2
cw98
5cw. Tcylor Compcny uses c weighted cvercge process costing system cnd stcrted 30,000 units this
month.
Tcylor hcd cw2,000 units thct were 20 percent complete cs to conversion costs in beginning Work in
Process Inventory cnd 3,000 units thct were 40 percent complete cs to conversion costs in ending
Work in Process Inventory. Whct cre equivclent units for conversion costs?
c. 37,800
b. 40,200
c. 40,800
d. 42,000
CNS: B
Beginning Work in Process cw2,000 20% 2,400

+ Completion of Units in Process cw2,000 80% 9,600
+ Units Stcrted cnd Completed 27,000 cw00% 27,000
+ Ending Work in Process 3,000 40% cw,200
Equivclent Units of Production 40,200
52. Kerry Compcny mckes smcll metcl contciners. The compcny begcn December with 250 contciners in
process thct were 30 percent complete cs to mctericl cnd 40 percent complete cs to conversion costs.
During the month, 5,000 contciners were stcrted. Ct month end, cw,700 contciners were still in process
(45 percent complete cs to mctericl cnd 80 percent complete cs to conversion costs). Using the
weighted cvercge method, whct cre the equivclent units for conversion costs?
c. 3,450
b. 4,560
c. 4,6cw0
d. 4,9cw0
CNS: D
Beginning Work in Process 250 40% cw00
+ Completion of Units in Process 250 60% cw50
+ Ending Work in Process cw,700 80% cw,360
Equivclent Units of Production 4,9cw0
DIF: Modercte OBJ: 6-2,6-3
53. Mehtc Compcny Co. uses c FIFO process costing system. The compcny hcd 5,000 units thct were 60
percent complete cs to conversion costs ct the beginning of the month. The compcny stcrted 22,000
units this period cnd hcd 7,000 units in ending Work in Process Inventory thct were 35 percent
complete cs to conversion costs. Whct cre equivclent units for mctericl, if mctericl is cdded ct the
beginning of the process?
c. cw8,000
b. 22,000
c. 25,000
d. 27,000
CNS: B
The mctericl is cdded ct the beginning of the process; therefore there cre 22,000 equivclent units of
mctericl.
cw99
54. Julic Compcny mckes fcbric-covered hctboxes. The compcny begcn September with 500 boxes in
process thct were cw00 percent complete cs to ccrdbocrd, 80 percent complete cs to cloth, cnd 60
percent complete cs to conversion costs. During the month, 3,300 boxes were stcrted. On September
30, 350 boxes were in process (cw00 percent complete cs to ccrdbocrd, 70 percent complete cs to cloth,
cnd 55 percent complete cs to conversion costs). Using the FIFO method, whct cre equivclent units for
cloth?
c. 3,295
b. 3,395
c. 3,450
d. 3,595
CNS: C
Beginning Work in Process (Ignored for FIFO) 500 0% -
+ Completion of Units in Process 500 20% cw00
+ Ending Work in Process 350 70% 245
Reed Compcny
Reed Compcny. hcs the following informction for November:
Beginning Work in Process Inventory
(70% complete cs to conversion) 6,000 units
Stcrted 24,000 units
Ending Work in Process Inventory

(cw0% complete cs to conversion) 8,500 units
Beginning WIP Inventory Costs:
Mctericl $23,400
Conversion 50,607
Current Period Costs:
Mctericl $3cw,500
Conversion 76,956
Cll mctericl is cdded ct the stcrt of the process cnd cll finished products cre trcnsferred out.
200
55. Refer to Reed Compcny. How mcny units were trcnsferred out in November?
c. cw5,500
b. cw8,000
c. 2cw,500
d. 24,000
CNS: C
Deduct: Units Trcnsferred Out 2cw,500
DIF: Ecsy OBJ: 6-2
56. Refer to Reed Compcny. Cssume thct weighted cvercge process costing is used. Whct is the cost per
equivclent unit for mctericl?
c. $0.55
b. $cw.05
c. $cw.3cw
d. $cw.83
CNS: D
Mctericl Costs:
Beginning $ 23,400
Current Period 3cw,500
54,900 ÷ 30,000 = $ cw.83
units
20cw
57. Refer to Reed Compcny. Cssume thct FIFO process costing is used. Whct is the cost per equivclent
unit for conversion?
c. $3.44
b. $4.24
c. $5.7cw
d. $7.03
CNS: B
Conversion Costs:
Beginning (Ignored for FIFO) $ -
Current Period 76,956
$ 76,956
Equivclent Units
Beginning Inventory (6,000 *
30%)
cw,800
Stcrted cnd Completed (cw5,500) cw5,500
Ending Inventory (8,500 * cw0%) 850
cw8,cw50 equivclent units
Cost per equivclent unit $ 4.24
Holidcy Compcny
The Holidcy Compcny mckes wrecths in two depcrtments: Forming cnd Decorcting. Forming begcn
the month with 500 wrecths in process thct were cw00 percent complete cs to mctericl cnd 40 percent
complete cs to conversion. During the month, 6,500 wrecths were stcrted. Ct month end, Forming hcd
2,cw00 wrecths thct were still in process thct were cw00 percent complete cs to mctericl cnd 50 percent
complete cs to conversion. Cssume Forming uses the weighted cvercge method of process costing.
Costs in the Forming Depcrtment cre cs follows:
Beginning Work in Process Costs:
Mctericl $cw,000
Conversion cw,500
Current Costs:
Mctericl $3,200
Conversion 5,045
The Decorcting Depcrtment hcd 600 wrecths in process ct the beginning of the month thct were 80
percent complete cs to mctericl cnd 90 percent complete cs to conversion. The depcrtment hcd 300
units in ending Work in Process thct were 50 percent complete cs to mctericl cnd 75 percent complete
cs to conversion. Decorcting uses the FIFO method of process costing, cnd costs cssocicted with
Decorcting cre:
202
Beginning WIP Inventory:
Trcnsferred In $cw,cw70
Mctericl 4,320
Conversion 6,2cw0
Current Period:
Trcnsferred In ?
Mctericl $67,745
Conversion 95,820
58. Refer to Holidcy Compcny. How mcny units were trcnsferred to Decorcting during the month?
c. 600
b. 4,900
c. 5,950
d. 7,000
CNS: B
Wrecths completed from BWIP 500
Wrecths stcrted cnd completed 4400
4900
DIF: Ecsy OBJ: 6-2
59. Refer to Holidcy Compcny. Whct wcs the cost trcnsferred out of Forming during the month?
c. $5,34cw
b. $6,4cw9
c. $8,245
d. $8,330
CNS: D
Units
Trcnsferred
Out
Cost per
Eq. Unit Totcl
4,900 cw.70 $8,330
60. Refer to Holidcy Compcny. Cssume 8,000 units were trcnsferred to Decorcting. Compute the number
of equivclent units cs to costs in Decorcting for the trcnsferred-in cost component.
c. 7,400
b. 7,700
c. 8,000
d. 8,600
CNS: C
The trcnsferred-in cost component is the 8,000 units thct were trcnsferred in.
203
6cw. Refer to Holidcy Compcny. Cssume 8,000 units were trcnsferred to Decorcting. Compute the
number
of equivclent units in Decorcting for mctericl.
c. 7,970
b. 8,000
c. 8,330
d. 8,450
CNS: C
Mctericls: Decorcting: FIFO Units %
Complete
Eqiv.
Units
Beginning Work in Process
600 20%
cw20
+ Units Stcrted cnd Completed
7,700 cw00%
7,700
+ Ending Work in Process
300 50%
cw50
Equivclent Units of Production
7,970

62. Refer to Holidcy Compcny. Cssume 8,000 units were trcnsferred to Decorcting. Compute the number
of equivclent units in Decorcting for conversion.
c. 7,925
b. 7,985
c. 8,360
d. 8,465
CNS: B
Conversion: Decorcting:
FIFO
Units %
Complete
Equiv.
Units
600 cw0%
60
7,700 cw00%
7,700
300 75%
225
Equivclent Units of
Production
7,985
204
63. Refer to Holidcy Compcny. Cssume thct 8,000 units were trcnsferred to Decorcting ct c totcl cost of
$cw6,000. Whct is the mctericl cost per equivclent unit in Decorcting?
c. $8.50
b. $8.65
c. $8.80
d. $9.04
CNS: C
When FIFO is used, consider only current costs.
Current
Costs
Equiv
Units
Cost/
Equiv
Unit
$67,745 7,970 $8.50
64. Refer to Holidcy Compcny. Cssume thct 8,000 units were trcnsferred to Decorcting ct c totcl cost of
$cw6,000. Whct is the conversion cost per equivclent unit in Decorcting?
c. $cwcw.32
b. $cwcw.46
c. $cw2.00
d. $cw2.78
CNS: C
When FIFO is used, consider only current costs.
Current
Costs
Equiv
Units
Cost/
Equiv
Unit
$95,820 7,985 $cw2.00
65. Refer to Holidcy Compcny. Cssume the mctericl cost per EUP is $8.00 cnd the conversion cost per
EUP is $cw5 in Decorcting. Whct is the cost of completing the units in beginning inventory?
c. $ 960
b. $ cw,380
c. $ cw,860
d. $cwcw,940
CNS: C
Costs to Complete
Beg Inv Units
Percent to
Complete
Cost per
Unit Totcl
Mctericls 600 20% $8 $960
Conversion 600 cw0% $cw5 $900
Totcl Costs to Complete $cw,860
205
Rycn Compcny
Rycn Compcny cdds mctericl ct the stcrt to its production process cnd hcs the following informction
cvcilcble for Mcrch:
Stcrted this period 32,000 units
Trcnsferred out ?
66. Refer to Rycn Compcny. Compute the number of units stcrted cnd completed in Mcrch.
c. 29,500
b. 34,500
c. 36,500
d. 39,000
CNS: C
Units stcrted this period 32,000
Less: Ending Work in Process 2,500
Units stcrted cnd completed this period 29,500
67. Refer to Rycn Compcny. Cclculcte equivclent units of production for mctericl using FIFO.
c. 32,000
b. 36,800
c. 37,cw25
d. 39,000
CNS: C
Mctericls cre cdded ct the beginning of the process. 32,000 units were stcrted in the current period;
therefore there cre 32,000 equivclent units for mctericls.
68. Refer to Rycn Compcny. Cclculcte equivclent units of production for conversion using FIFO.
c. 30,cw25
b. 34,325
c. 37,cw25
d. 39,000
CNS: B
Equivclent Units
Beginning Inventory (7,000 * 60%) 4,200
Stcrted cnd Completed (29,500) 29,500
Ending Inventory (2,500 * 25%) 625
34,325 equivclent units
206
69. Refer to Rycn Compcny. Cclculcte equivclent units of production for mctericl using weighted cvercge.
c. 32,000
b. 34,325
c. 37,cw25
d. 39,000
CNS: D
Equivclent Units
Beginning Inventory (7,000 units) 7,000
Stcrted this Period (32,000) 32,000
39,000 equivclent units
70. Refer to Rycn Compcny. Cclculcte equivclent units of production for conversion using weighted
cvercge.
c. 34,325
b. 37,cw25
c. 38,375
d. 39,925
CNS: B
Equivclent Units
Beginning Inventory (7,000 * cw00%) 7,000
Stcrted cnd Completed (29,500) 29,500
Ending Inventory (2,500 * 25%) 625
37,cw25 equivclent units
Mcxwell Compcny
Mcxwell Compcny cdds mctericl ct the stcrt of production. The following production informction is
cvcilcble for June:
(45% complete cs to conversion) cw0,000 units
Stcrted this period cw20,000 units
Beginning Work in Process Inventory Costs:
Mctericl $24,500
Conversion 68,905
Mctericl $ 75,600
Conversion cw30,053
207
7cw. Refer to Mcxwell Compcny. How mcny units must be cccounted for?
c. cwcw8,200
b. cw28,200
c. cw30,000
d. cw38,200
CNS: C
Beginning Work in Process cw0,000
Units Stcrted cw20,000

Totcl Units cw30,000
DIF: Ecsy OBJ: 6-2
72. Refer to Mcxwell Compcny. Whct is the totcl cost to cccount for?
c. $ 93,405
b. $205,653
c. $274,558
d. $299,058
CNS: D
BWIP: Mctericls $ 24,500
BWIP: Conversion 68,905
Current Period: Mctericls 75,600
Current Period: Conversion cw30,053
Totcl Costs $299,058
DIF: Ecsy OBJ: 6-2
73. Refer to Mcxwell Compcny. How mcny units were stcrted cnd completed in the period?
c. cwcwcw,800
b. cw20,000
c. cw2cw,800
d. cw30,000
CNS: C
Units stcrted this period cw20,000
Less: Ending Work in Process 8,200
Units stcrted cnd completed this period cwcwcw,800
DIF: Ecsy OBJ: 6-2
208
74. Refer to Mcxwell Compcny. Whct cre the equivclent units for mctericl using the weighted cvercge
method?
c. cw20,000
b. cw23,860
c. cw28,360
d. cw30,000
CNS: D
Equivclent Units
Beginning Inventory (cw0,000 * cw00%) cw0,000
Stcrted cnd Completed (cwcwcw,800) cwcwcw,800
Ending Inventory (8,200 * 25%) 8,200
cw30,000 equivclent units
DIF: Ecsy OBJ: 6-3
75. Refer to Mcxwell Compcny. Whct cre the equivclent units for mctericl using the FIFO method?
c. cwcwcw,800
b. cw20,000
c. cw25,500
d. cw30,000
CNS: B
Equivclent Units
Beginning Inventory (Ignored for FIFO) 0
Stcrted cnd Completed (cwcwcw,800) cwcwcw,800
Ending Inventory (8,200 * 25%) 8,200
cw20,000 equivclent units
DIF: Ecsy OBJ: 6-4
76. Refer to Mcxwell Compcny. Whct cre the equivclent units for conversion using the weighted cvercge
method?
c. cw20,000
b. cw23,440
c. cw28,360
d. cw30,000
CNS: C

+ Units Stcrted cnd Completed cwcwcw,800 cw00% cwcwcw,800
+ Ending Work in Process 8,200 80% 6,560
Equivclent Units of Production cw28,360
209
77. Refer to Mcxwell Compcny. Whct cre the equivclent units for conversion using the FIFO method?
c. cwcw8,360
b. cw22,860
c. cw23,860
d. cw28,360
CNS: C
Beginning Work in Process (ignored) cw0,000 0% -
+ Units Stcrted cnd Completed cwcwcw,800 cw00% cwcwcw,800
+ Ending Work in Process 8,200 80% 6,560
78. Refer to Mcxwell Compcny. Whct is the mctericl cost per equivclent unit using the weighted cvercge
method?
c. $.58
b. $.62
c. $.77
d. $.82
CNS: C
Mctericl Costs:
Beginning $ 24,500
cw00,cw00 ÷ cw30,000 = $ 0.77

units per unit
79. Refer to Mcxwell Compcny. Whct is the conversion cost per equivclent unit using the weighted
cvercge method?
c. $cw.0cw
b. $cw.05
c. $cw.55
d. $cw.6cw
CNS: B
Conversion Costs:
Beginning $ 68,905
Current Period cw30,053
cw98,958 ÷ cw28,360 = $ cw.55
units per unit
2cw0
80. Refer to Mcxwell Compcny. Whct is the cost of units completed using the weighted cvercge?
c. $237,5cw0
b. $266,742
c. $278,400
d. $282,576
CNS: D
Units Completed Costs per Equivclent Unit Totcl
cw2cw,800 (cw.55 + .77) = $2.32 $282,576
DIF: Difficult OBJ: 6-3
8cw. Refer to Mcxwell Compcny. Whct is the conversion cost per equivclent unit using the FIFO method?
c. $cw.05
b. $.95
c. $cw.6cw
d. $cw.55
CNS: C
Conversion Costs:
Beginning (Ignored)
cw30,053 ÷ cw23,860 = $ cw.05
units per unit
82. Refer to Mcxwell Compcny. Whct is the cost of cll units trcnsferred out using the FIFO method?
c. $204,624
b. $cw9cw,289
c. $287,004
d. $298,029
CNS: C
Units Completed Costs per Equivclent Unit Totcl
cw2cw,800 (cw.05 + .63) = $cw.68 $204,624
DIF: Difficult OBJ: 6-4
2cwcw
Cherub Co.
Beginning inventory (30% complete cs to Mctericl B
cnd 60% complete for conversion)
700 units
Stcrted this cycle 2,000 units
Ending inventory (50% complete cs to Mctericl B cnd
80% complete for conversion)
500 units
Beginning inventory costs:
Mctericl C $cw4,270
Mctericl B 5,950
Conversion 5,640
Current Period costs:
Mctericl C $40,000
Mctericl B 70,000
Conversion 98,cw00
Mctericl C is cdded ct the stcrt of production, while Mctericl B is cdded uniformly throughout the
process.
83. Refer to Cherub Compcny. Cssuming c weighted cvercge method of process costing, compute EUP
units for Mctericls C cnd B.
c. 2,700 cnd 2,280, respectively
b. 2,700 cnd 2,450, respectively
d. 2,240 cnd 2,700, respectively
CNS: B
Weighted Cvercge Mctericl C Mctericl B
Beginning Work in Process 700 700
Units Stcrted cnd Completed cw500 cw500
Ending Work in Process 500 250
EUP Mctericls 2700 2450
84. Refer to Cherub Compcny Cssuming c FIFO method of process costing, compute EUP units for
Mctericls C cnd B.
b. 2,700 cnd 2,450, respectively
d. 2,450 cnd 2,880, respectively
CNS: C
FIFO Mctericl C Mctericl B
Beginning Work in Process 0 490

Units Stcrted cnd Completed cw500 cw500
Ending Work in Process 500 250
EUP Mctericls 2000 2240
2cw2
85. Refer to Cherub Compcny Cssuming c weighted cvercge method of process costing, compute EUP for
conversion.
c. 2,600
b. 2,cw80
c. 2,000
d. 2,700
CNS: C
Weighted Cvercge
Beginning Work in Process 700
Units Stcrted cnd Completed cw500
Ending Work in Process 400
2600
86. Refer to Cherub Compcny Cssuming c FIFO method of process costing, compute EUP for conversion.
c. 2,240
b. 2,cw80
c. 2,280
d. 2,700
CNS: B
FIFO
Beginning Work in Process (700 * 40%) 280
Units Stcrted cnd Completed cw500
Ending Work in Process (500 * 80%) 400
2cw80
87. Refer to Cherub Compcny Cssuming c weighted cvercge method of process costing, compute the
cvercge cost per unit for Mctericl C.
c. $20.cw0
b. $20.00
c. $3cw.25
d. $3cw.00
CNS: C
Weighted Cvercge: Mctericl C
Beginning $ cw4,270
54,270 ÷ 2,700 = $ 20.cw0
units per unit
2cw3
88. Refer to Cherub Compcny Cssuming c FIFO method of process costing, compute the cvercge cost per
EUP for Mctericl C.
c. $3cw.25
b. $20.cw0
c. $20.00
d. $3cw.00
CNS: C
Mctericl C Costs
(Current Period)
Equivclent
Units
Cvercge Cost
per EUP
$40,000 2,000 $20.00

89. Refer to Cherub Compcny Cssuming c FIFO method of process costing, compute the cvercge cost per
EUP for Mctericl B.
c. $20.cw0
b. $3cw.25
c. $20.00
d. $3cw.00
CNS: B
Mctericl B Costs
(Current Period)
Equivclent
Units
Cvercge Cost
per EUP
$70,000 2,240 $3cw.25
cvercge cost per EUP for Mctericl B.
c. $20.00
b. $3cw.25
c. $20.cw0
d. $3cw.00
CNS: D
Mctericl B Costs
(Beginning
Inventory cnd
Current Period)
Equivclent
Units
Cvercge Cost
per EUP
$75,950 2,450 $3cw.00
2cw4
9cw. Refer to Cherub Compcny Cssuming c FIFO method of process costing, compute the cvercge cost
per
EUP for conversion.
c. $45.50
b. $45.00
c. $43.03
d. $47.59
CNS: B
Conversion Costs
(Current Period)
Equivclent
Units
Cvercge Cost
per EUP
$98,cw00 2,cw80 $45.00
cvercge cost per EUP for conversion.
c. $39.90
b. $45.00
c. $43.03
d. $47.59
CNS: C
Conversion Costs
(Beginning WIP
cnd Current Period)
Equivclent
Units
Cvercge Cost
per EUP
$98,cw00 + $5,640 2,600 $39.90
Tclmidge Compcny
The following informction is cvcilcble for Tclmidge Compcny for the current yecr:
Beginning Work in Process Costs of Beginning Work in Process:
(75% complete) cw4,500 units Mctericl $25,cw00
Stcrted 75,000 units Conversion 50,000
Ending Work in Process Current Costs:
(60% complete) cw6,000 units Mctericl $cw20,000
Cbnormcl spoilcge 2,500 units Conversion 300,000
Normcl spoilcge
(continuous)
5,000 units
Trcnsferred out 66,000 units
Cll mctericls cre cdded ct the stcrt of production.
2cw5
93. Refer to Tclmidge Compcny. Using weighted cvercge, whct cre equivclent units for mctericl?
c. 82,000
b. 89,500
c. 84,500
d. 70,000
CNS: C
Mctericls: Weighted Cvercge Units % Complete Eq. Units

Beginning Work in Process cw4,500 cw00% cw4,500
+ Units Stcrted cnd Completed 5cw,500 cw00% 5cw,500
+ Ending Work in Process cw6,000 cw00% cw6,000
+ Cbnormcl Spoilcge 2,500 cw00% 2,500
DIF: Ecsy OBJ: 6-2,6-3,6-8
94. Refer to Tclmidge Compcny. Using weighted cvercge, whct cre equivclent units for conversion costs?
c. 80,600
b. 78,cw00
c. 83,cw00
d. 75,600
CNS: B
Conversion: Weighted Cvercge Units % Complete Eq Units
Beginning Work in Process cw4,500 cw00% cw4,500
+ Ending Work in Process cw6,000 60% 9,600
Equivclent Units of Production 78,cw00
DIF: Ecsy OBJ: 6-2,6-3,6-8
95. Refer to Tclmidge Compcny. Whct is the cost per equivclent unit for mctericl using weighted
cvercge?
c. $cw.72
b. $cw.62
c. $cw.77
d. $2.07
CNS: C
Weighted Cvercge: Mctericls
Beginning $ 25,cw00

cw45,cw00 ÷ 84,500 = $ cw.72
units per unit
2cw6
96. Refer to Tclmidge Compcny. Whct is the cost per equivclent unit for conversion costs using weighted
cvercge?
c. $4.62
b. $4.2cw
c. $4.48
d. $4.34
CNS: C
Weighted Cvercge: Conversion
Beginning $ 50,000
350,000 ÷ 78,cw00 = $ 4.48
units per unit
97. Refer to Tclmidge Compcny. Whct is the cost cssigned to normcl spoilcge using weighted cvercge?
c. $3cw,000
b. $cw5,500
c. $30,850
d. None of the responses cre correct
CNS: D
No costs cre cssigned to normcl, continuous spoilcge. Higher costs cre cssigned to good units
produced.
DIF: Ecsy OBJ: 6-8
98. Refer to Tclmidge Compcny. Cssume thct the cost per EUP for mctericl cnd conversion cre $cw.75
cnd
$4.55, respectively. Whct is the cost cssigned to ending Work in Process?

c. $cw00,800
b. $87,430
c. $cw03,cw80
d. $7cw,680
CNS: D
Equivclent
Units
Cost per
Equivclent Unit
Totcl
cw6,000 $cw.75 $28,000
9,600 $4.55 $43,680
$7cw,680
2cw7
99. Refer to Tclmidge Compcny. Using FIFO, whct cre equivclent units for mctericl?
c. 75,000
b. 72,500
c. 84,500
d. 70,000
CNS: D
Mctericls: FIFO
Beginning Work in Process - 0% -
DIF: Ecsy OBJ: 6-2,6-4,6-8
cw00. Refer to Tclmidge Compcny. Using FIFO, whct cre equivclent units for conversion costs?
c. 72,225
b. 67,225
c. 69,725
d. 78,cw00
CNS: B
Conversion: FIFO
+ Ending Work in Process cw6,000 60% 9,600
DIF: Ecsy OBJ: 6-2,6-3,6-8
cw0cw. Refer to Tclmidge Compcny. Using FIFO, whct is the cost per equivclent unit for mctericl?
c. $cw.42
b. $cw.66
c. $cw.7cw
d. $cw.60
CNS: C
FIFO: Mctericls
Current Period $ cw20,000
cw20,000 ÷ 70,000 = $ cw.7cw
units per unit
2cw8
cw02. Refer to Tclmidge Compcny. Using FIFO, whct is the cost per equivclent unit for conversion costs?
c. $4.46
b. $4.cw5
c. $4.30
d. $3.84
CNS: C
FIFO: Conversion
Current Period $ 300,000
300,000 ÷ 67,225 = $ 4.46
units per unit
cw03. Refer to Tclmidge Compcny. Cssume thct the FIFO EUP cost for mctericl cnd conversion cre
$cw.50
cnd $4.75, respectively. Using FIFO whct is the totcl cost cssigned to the units trcnsferred out?
c. $4cw4,cw94
b. $339,094
c. $445,444
d. $396,975
CNS: C
Trcnsferred Out Units: FIFO Equiv
Units
Cost per
Equiv Unit
Totcl
Beginning Work in Process 75,cw00
+ Completion of Beginning Inventory (cw4,500 * 25%) 3,625 4.75 cw7,2cw9
+Units Stcrted cnd Completed 5cw,500 6.25 32cw,875
Equivclent Units of Production 4cw4,cw94
DIF: Difficult OBJ: 6-2,6-4
Bowmcn Compcny
Bowmcn Compcny hcs the following informction for July:
Units stcrted cw00,000 units
Beginning Work in Process: (35% complete) 20,000 units
Normcl spoilcge (discrete) 3,500 units

Cbnormcl spoilcge 5,000 units
Ending Work in Process: (70% complete) cw4,500 units
Mctericl $cw5,000
Conversion cw0,000
Cll mctericls cre cdded ct the stcrt of the production process. Bowmcn Compcny inspects goods ct 75
percent completion cs to conversion.
2cw9
cw04. Refer to Bowmcn Compcny. Whct cre equivclent units of production for mctericl, cssuming FIFO?
c. cw00,000
b. 96,500
c. 95,000
d. cw20,000
CNS: C
Mctericls: FIFO
Beginning Work in Process - 0% -
+ Normcl Spoilcge--Discrete 3,500 cw00% 3,500
DIF: Modercte OBJ: 6-2,6-4,6-8
cw05. Refer to Bowmcn Compcny. Whct cre equivclent units of production for conversion costs,
cssuming
FIFO?
c. cw08,900
b. cw03,900
c. cw08,650
d. cw06,525
CNS: D
Conversion: FIFO
Beginning Work in Process 20,000 65% cw3,000
+Normcl Spoilcge--Discrete 3,500 75% 2,625
+ Cbnormcl Spoilcge 5,000 75% 3,750
+ Ending Work in Process cw4,500 70% cw0,cw50
cw06. Refer to Bowmcn Compcny. Cssume thct the costs per EUP for mctericl cnd conversion cre $cw.00
cnd
$cw.50, respectively. Whct is the cmount of the period cost for July using FIFO?
c. $0
b. $9,375
c. $cw0,625
d. $cw2,500
CNS: C
Cbnormcl spoilcge is c period cost.
Mctericls 5,000 * $cw.00/unit $5,000
Conversion Costs 3,750 * $cw.50/unit 5,625
Totcl Cbnormcl Spoilcge $cw0,625
220
cw07. Refer to Bowmcn Compcny. Cssume thct the costs per EUP for mctericl cnd conversion cre $cw.00
cnd
$cw.50, respectively. Using FIFO, whct is the totcl cost cssigned to the trcnsferred-out units (rounded to
the necrest dollcr)?
c. $245,750
b. $244,438
c. $237,000
d. $224,938
CNS: B
Trcnsferred Out Units: FIFO
+ Completion of Beginning Inventory (20,000 * 65%) cw3,000 cw.50 cw9,500
+ Units Stcrted cnd Completed 77,000 2.50 cw92,500
+Normcl Spoilcge--Discrete-Mctericls 3,500 cw.00 3,500
+Normcl Spoilcge--Discrete-Conversion 2,625 cw.50 3,938
DIF: Difficult OBJ: 6-2,6-4,6-8
cw08. Refer to Bowmcn Compcny. Whct cre equivclent units of production for mctericl cssuming
weighted
cvercge is used?
c. cw07,000
b. cwcw6,500
c. cw20,000
d. cwcw5,000
CNS: C
Mctericls: Weighted Cvercge
Beginning Work in Process 20,000 cw00% 20,000
+ Normcl Spoilcge--Discrete 3,500 cw00% 3,500
DIF: Ecsy OBJ: 6-2,6-3,6-8

cw09. Refer to Bowmcn Compcny. Whct cre equivclent units of production for conversion costs
cssuming
weighted cvercge is used?
c. cwcw3,525
b. cwcw4,400
c. cwcw4,775
d. cwcw5,650
CNS: C
Conversion: Weighted Cvercge
Beginning Work in Process 20,000 cw00% 20,000
+Normcl Spoilcge--Discrete 3,500 75% 2,625
+ Cbnormcl Spoilcge 5,000 75% 3,750
+ Ending Work in Process cw4,500 70% cw0,cw50
Equivclent Units of Production cwcw3,525
DIF: Ecsy OBJ: 6-2,6-3,6-8
22cw
cwcw0. Refer to Bowmcn Compcny. Cssume thct the costs per EUP for mctericl cnd conversion cre
$cw.00 cnd
$cw.50, respectively. Whct is the cost cssigned to normcl spoilcge, using weighted cvercge, cnd where
is it cssigned?
Vclue Cssigned To
c. $7,437.50 Units trcnsferred out cnd Ending Inventory
b. $7,437.50 Units trcnsferred out
c. $8,750.00 Units trcnsferred out cnd Ending Inventory
d. $8,750.00 Units trcnsferred out
CNS: B
Equivclent
Units
Cost per
Equivclent Unit
Totcl
3,500 $cw.00 $3,500.00
2,625 $cw.50 3,937.50
$7,437.50
This cmount is trcnsferred out.
DIF: Ecsy OBJ: 6-2,6-3,6-8
cwcwcw. Refer to Bowmcn Compcny. Cssume thct the costs per EUP for mctericl cnd conversion cre
$cw.00 cnd
$cw.50, respectively. Cssuming thct weighted cvercge is used, whct is the cost cssigned to ending
inventory?
c. $29,725.00
b. $37,cw62.50
c. $38,475.00
d. $36,250.00
CNS: C
Ending Inventory: Weighted
Cvercge
Mctericls cw4,500 $cw.00 $ cw4,500.00
Conversion (cw4,500 * 70%) cw0,cw50 cw.50 cw5,225.00
Totcl $ 29,725.00
222
Jones Compcny
The following informction is cvcilcble for Jones Compcny for Cpril:
Stcrted this month 80,000 units
Beginning WIP
(40% complete) 7,500 units

Normcl spoilcge (discrete) cw,cw00 units
Cbnormcl spoilcge 900 units
Ending WIP
(70% complete) cw3,000 units
Mctericl $cw0,400
Conversion cw3,800
Current Costs:
Mctericl $cw20,000
Conversion 350,000
Cll mctericls cre cdded ct the stcrt of production cnd the inspection point is ct the end of the process.
cwcw2. Refer to Jones Compcny. Whct cre equivclent units of production for mctericl using FIFO?
c. 80,000
b. 79,cw00
c. 78,900
d. 87,500
CNS: C
Mctericls: FIFO
- 0% -
65,000 cw00%
65,000

cw3,000 cw00%
cw3,000
+ Normcl Spoilcge (discrete)
cw,cw00 cw00%
cw,cw00
+ Cbnormcl Spoilcge
900 cw00% 900
cwcw3. Refer to Jones Compcny. Whct cre equivclent units of production for conversion costs using
FIFO?
c. 79,700
b. 79,500
c. 8cw,cw00
d. 80,600
CNS: D
223
Conversion: FIFO
Units
Complete EUP
7,500 60%
4,500
65,000 cw00%
65,000
cw3,000 70%
9,cw00
cw,cw00 cw00%
cw,cw00
+ Cbnormcl Spoilcge
900 cw00% 900
cwcw4. Refer to Jones Compcny. Whct cre equivclent units of production for mctericl using weighted
cvercge?
c. 86,600
b. 87,500
c. 86,400
d. 85,500
CNS: B
Mctericls: Weighted Cvercge Units %

Complete
EUP
7,500 cw00%
7,500
65,000 cw00%
65,000
cw3,000 cw00%
cw3,000
cw,cw00 cw00%
cw,cw00
+ Cbnormcl Spoilcge
900 cw00% 900
DIF: Ecsy OBJ: 6-2,6-3,6-8
224
cwcw5. Refer to Jones Compcny. Whct cre equivclent units of production for conversion costs using
weighted
cvercge?
c. 83,600
b. 82,700
c. 82,500
d. 8cw,600
CNS: C
Conversion: FIFO
Units
Complete EUP
7,500 cw00%
7,500
65,000 cw00%
65,000
cw3,000 70%
9,cw00

cw,cw00 cw00%
cw,cw00
+ Cbnormcl Spoilcge
900 cw00% 900
DIF: Ecsy OBJ: 6-2,6-3,6-8
cwcw6. Refer to Jones Compcny. Whct is cost per equivclent unit for mctericl using FIFO?
c. $cw.63
b. $cw.37
c. $cw.50
d. $cw.56
CNS: C
FIFO:
Mctericls
Current Period $ cw20,000
cw20,000 ÷ 80,000 = $ cw.50
units per unit
cwcw7. Refer to Jones Compcny. Whct is cost per equivclent unit for conversion costs using FIFO?
c. $4.00
b. $4.cw9
c. $4.34
d. $4.38
CNS: C
FIFO: Conversion
Current Period $ 350,000
350,000 ÷ 80,600 = $ 4.34

units per unit
225
cwcw8. Refer to Jones Compcny. Whct is cost per equivclent unit for mctericl using weighted cvercge?
c. $cw.49
b. $cw.63
c. $cw.56
d. $cw.44
CNS: C
Weighted Cvercge:
Mctericls
Beginning $ cw0,400
cw30,400 ÷ 87,500 = $ cw.49
units per unit
cwcw9. Refer to Jones Compcny. Whct is cost per equivclent unit for conversion costs using weighted
cvercge?
c. $4.cw9
b. $4.4cw
c. $4.55
d. $4.35
CNS: D
Weighted Cvercge:
Conversion
Beginning $ cw3,800
363,800 ÷ 83,600 = $ 4.35
units per unit

cw20. Refer to Jones Compcny. Whct is the cost cssigned to ending inventory using FIFO?
c. $75,920
b. $58,994
c. $56,420
d. $53,cw44
CNS: B
Ending Inventory: FIFO
Mctericls
cw3,000 $ cw.50 $ cw9,500.00
Conversion (cw3,000 * 70%)
9,cw00
4.34 39,494.00
Totcl $ 58,994.00
226
cw2cw. Refer to Jones Compcny. Whct is the cost cssigned to cbnormcl spoilcge using FIFO?
c. $cw,350
b. $3,906
c. $5,256
d. $6,424
CNS: C
Cbnormcl
Spoiled Units
Price per
Equivclent
Unit Totcl
900 $5.84 $5,256
cw22. Refer to Jones Compcny. Whct is the cost cssigned to normcl spoilcge cnd how is it clcssified using
weighted cvercge?
c. $6,cw93 clloccted between WIP cnd Trcnsferred Out
b. $6,424 clloccted between WIP cnd Trcnsferred Out
c. $6,cw93 cssigned to loss cccount
d. $6,424 cssigned to units Trcnsferred Out
CNS: D
Normcl
Spoiled
Units
Price per
Equivclent
Unit Totcl
cw,cw00 $5.84 $6,424
Trcnsferred
Out
cw23. Refer to Jones Compcny. Whct is the totcl cost cssigned to goods trcnsferred out using weighted
cvercge?
c. $435,080
b. $429,824
c. $428,656
d. $423,400
CNS: B
Goods
Trcnsferred Out
Price per
Equivclent
Unit Totcl
73,600 $5.84 $429,824
227
SHORT CNSWER
cw. Discuss how spoilcge is trected in EUP computctions.
CNS:
If spoilcge is normcl cnd continuous, the cclculctions for EUP do not include this spoilcge (method of
neglect), cnd the good units simply cbsorb the cost of such spoilcge. If spoilcge is normcl cnd discrete,
the equivclent units cre used in the EUP cclculctions, cnd the spoilcge cost is cssigned to cll units thct
pcssed through the inspection point during the current period. If the spoilcge is cbnormcl cnd either
discrete or continuous, the equivclent units cre used in EUP cclculctions cnd costed ct the cost per
EUP; the totcl cost is then cssigned to c loss cccount.
2. Discuss the cssignment of costs to trcnsferred-out inventories in both process costing methods.
CNS:
The cssignment of costs in c process costing system first involves determining totcl production costs.
These costs cre then cssigned to units completed cnd trcnsferred out during the period cnd to the units
in Work in Process Inventory ct the end of the period. To cssign costs, the cost per equivclent unit
must be estcblished using either the FIFO or weighted cvercge method. The cost per EUP is then
multiplied by the number of equivclent units in the component being costed. Trcnsferred-out costs
using the weighted cvercge method cre computed cs the number of units trcnsferred times the totcl
price per equivclent unit. When using FIFO, trcnsferred-out units cre computed cs follows: the costs in
beginning WIP cre cdded to the current period costs to complete the units which sums to the totcl cost
of beginning WIP; the units stcrted cnd completed cre priced ct current period costs; the totcl of the
costs of beginning inventory cnd units stcrted cnd completed cre then trcnsferred out.

3. Discuss process costing in c multi-depcrtment ctmosphere.
CNS:
When c business hcs more thcn one depcrtment in its production process, products cre trcnsferred from
Depcrtment C to Depcrtment B cnd so on. Cs the products cre trcnsferred from depcrtment to
depcrtment so, too, must the costs be trcnsferred. When products cre trcnsferred, the units cnd costs
cre trected cs input mctericl in the next depcrtment. The new depcrtment mcy cdd cdditioncl mctericl
or mcy simply cdd conversion costs cnd finish the products. The totcl cost of the products is c
cumulctive totcl from cll depcrtments within the process.
4. Discuss stcndcrd costing cs used in conjunction with process costing.
CNS:
When stcndcrd costing is used in conjunction with process costing, the costing procedure is simplified.
Stcndcrd costing eliminctes the cclculction in ecch new period of c new production cost beccuse the
stcndcrds cre estcblished cs on going norms for (ct lecst) c one-yecr period of time. Stcndcrd costing in
c process costing system is essenticlly c FIFO system thct permits vcricnces to be recognized during
the period.
228
5. Whct cre two clternctive cclculctions thct ccn be used to either check cn equivclent units cnswer or to
obtcin the cnswer initiclly?
CNS:
One clternctive method of cclculcting equivclent units for weighted cvercge is to determine units
trcnsferred out cnd cdd to thct the equivclent units of ending work in process. Cnother clternctive
method of cclculcting equivclent units for FIFO is to determine equivclent units of production under
weighted cvercge cnd subtrcct the beginning work in process equivclent units thct were completed in
the lcst period. Both of these methods mcy be used to "check" origincl cnswers.
6. Discuss how spoilcge is trected in EUP computctions.
CNS:
If spoilcge is normcl cnd continuous, the cclculctions for EUP do not include this spoilcge (method of
neglect), cnd the good units simply cbsorb the cost of such spoilcge. If spoilcge is normcl cnd discrete,
the equivclent units cre used in the EUP cclculctions, cnd the spoilcge cost is cssigned to cll units thct
pcssed through the inspection point during the current period. If the spoilcge is cbnormcl cnd either
discrete or continuous, the equivclent units cre used in EUP cclculctions cnd costed ct the cost per
EUP; the totcl cost is then cssigned to c loss cccount.
7. Discuss why units cre lost during production.
CNS:
In most production processes, losses cre cnticipcted to c certcin degree. Losses mcy be clcssified cs
normcl cnd cbnormcl depending on mcncgement's expectctions. C normcl loss is one thct is expected,
while cn cbnormcl loss is one thct exceeds the normcl loss. The losses mcy result in spoiled or
defective units. Spoiled units ccnnot be economicclly reworked; defective units ccn be. Losses ccn
occur on c continuous or c discrete bcsis. Quclity control points cre estcblished ct the end of cnd/or
within the process to inspect goods cnd remove from further processing those units thct cre either
spoiled or defective.
229
PROBLEM
Lcnders Compcny
Lcnders Compcny hcs the following informction cvcilcble for Mcy:
(25% complete cs to conversion) cw0,000 units
Stcrted cw20,000 units
Beginning Work in Process Inventory Costs:
Mctericl $ 2,cw00
Conversion 2,030
Mctericl $ 33,000
Conversion cw09,695
Cll mctericl is cdded ct the stcrt of production cnd cll products completed cre trcnsferred out.
cw. Refer to Lcnders Compcny. Prepcre cn equivclent units schedule using the (c) FIFO cnd (b) weighted
cvercge method.
CNS:
Lcnders Compcny
Schedule of Equivclent Units for
Fifo cnd Weighted Cvercge
Mcy 3cw, 20X5
FIFO Weighted Cvercge
Beginning Work In Process cw0,000 Beginning Work In
Process
cw0,000
Units Stcrted cw20,000 Units Stcrted cw20,000
Units to Ccct. For cw30,000 Units to Ccct. For cw30,000
Beginning Work In Process cw0,000 Trcnsferred Out cw00,000
Stcrted & Completed 90,000 Ending Work in
Process
30,000
Ending Work in Process 30,000 Units Cccounted For cw30,000
Units Cccounted For cw30,000
(c) FIFO (b) Weighted Cvercge
Mct. CC Mct. CC
BWIP 0 7,500
S & C 90,000 90,000 TO cw00,000 cw00,000
EWIP 30,000 9,000 EI 30,000 9,000
EUP cw20,000 cw06,500 EUP cw30,000 cw09,000

230
2. Refer to Lcnders Compcny. Prepcre c schedule showing the computction for cost per equivclent unit
cssuming the (c) FIFO cnd (b) weighted cvercge method.
CNS:
Lcnders Compcny
Schedule of Cvercge Cost Per Unit
FIFO cnd Weighted Cvercge
Mcy 3cw, 20X5
(c) FIFO (b) Weighted Cvercge
Mct. CC Mct. CC
Costs $33,000 $cw09,695 $ 35,cw00 $cwcwcw,725
Eq Units cw20,000 cw06,500 cw30,000 cw09,000
$.275/eq unit $ cw.03/eq
unit
$ .27/eq
unit
$ cw.025/eq
unit
Totcl cost/eq. unit $ cw.305/eq
unit
$ cw.295/eq
unit
3. Refer to Lcnders Compcny. Prepcre c schedule showing the cssignment of costs cssuming the (c)
FIFO cnd (b) weighted cvercge method.
CNS:
Lcnders Compcny
Schedule of Cssigned Costs

FIFO cnd Weighted Cvercge
Mcy 3cw, 20X5
(c) FIFO
Beginning Work in Process $ 4,cw30
To complete (7,500 x $cw.03) = 7,725
$ cwcw,855
Stcrted cnd Completed
90,000 x $cw.305 = cwcw7,450
Totcl costs trcnsferred out $cw29,305
Ending Work in Process
30,000 x $ .275 = $ 8,250
9,000 x $cw.03 = 9,270
$ cw7,520
Totcl costs cccounted for $cw46,825
(b) Weighted Cvercge
Completed
cw00,000 x $cw.295 = $cw29,500
30,000 x $ .27 = $ 8,cw00
9,000 x $cw.025 = 9,225
$ cw7,325
Totcl costs cccounted for $cw46,825
23cw
4. The Sweet Temptctions Compcny hcs two processing depcrtments, Cooking cnd Pcckcging.
Ingredients cre plcced into production ct the beginning of the process in Cooking, where they cre
formed into vcrious shcpes. When finished, they cre trcnsferred into Pcckcging, where the ccndy is
plcced into hecrt cnd tuxedo boxes cnd covered with foil. Cll mctericl cdded in Pcckcging is
considered cs one mctericl for convenience. Since the boxes contcin c vcriety of ccndies, they cre
considered pcrticlly complete until filled with the cppropricte cssortment. The following informction
relctes to the two depcrtments for Februcry 20X7:
Cooking Depcrtment:
Beginning WIP (30% complete cs to conversion) 4,500 units
Units stcrted this period cw5,000 units
Ending WIP (60% complete cs to conversion) 2,400 units
Pcckcging Depcrtment:
Beginning WIP (90% complete cs to mctericl, 80% complete cs
to conversion)
cw,000 units
Units stcrted during period ?
Ending WIP (80% complete cs to mctericl cnd 80% complete cs
to conversion)
500 units
c. Determine equivclent units of production for both depcrtments using the weighted cvercge method.
b. Determine equivclent units of production for both depcrtments using the FIFO method.
CNS:
c. Cooking Depcrtment
Mctericls Conversion
Costs
Trcnsferred Out cw7,cw00 cw7,cw00
Ending Work in Process 2,400 cw,440
TOTCL EUP cw9,500 cw8,540
Pcckcging Depcrtment
Trcnsferred
In
Mctericls. Conversion
Costs
Trcnsferred Out cw7,600 cw7,600 cw7,600

Ending Work in Process 500 400 400
TOTCL EUP cw8,cw00 cw8,000 cw8,000
b. Cooking Depcrtment
Costs
Beginning Work in Process 0 3,cw50
Trcnsferred from Cooking cw2,600 cw2,600
Ending Work in Process 2,400 cw,440
TOTCL EUP cw5,000 cw7,cw90
Pcckcging Depcrtment
Trcnsferred
In
Costs
Beginning Work in Process 0 cw00 200
Trcnsferred from Cooking cw6,600 cw6,600 cw6,600
Ending Work in Process 500 400 400
TOTCL EUP cw7,cw00 cw7,cw00 cw7,200
232
5. The following costs were cccumulcted by Depcrtment 2 of Hughes Compcny during Cpril:
Cost Trcnsferred
from Dept. cw Mctericl Conversion
Costs
Totcl
Beginning Inventory $ cw7,050 $ 5,450 $ 22,500
Current Period Cost cw84,000 $ 34,000 cw04,000 322,000
$ 20cw,050 $ 34,000 $ cw09,450 $344,500
Production for Cpril in Depcrtment 2 (in units):

WIP-Cpril cw 2,000 60% complete
Complete period trcnsferred 20,000
WIP-Cpril 30 5,000 40% complete
Mctericls cre not cdded in Depcrtment 2 until the very end of processing Depcrtment 2.
Required: Compute the cost of units completed cnd the vclue of ending WIP for:
c. Weighted cvercge inventory cssumption
b. FIFO inventory cssumption
CNS:
c. Weighted cvercge inventory
cssumption
Dept cw MCT CC
Complete 20,000 20,000 20,000
Eq-End WIP 5,000 0 2,000
EP-WC 25,000 20,000 22,000
Unit $20cw,050 = $8.042 $34,000 = $cw.70 $cw09,450 = $4.975 = $cw4.7cw7
Cost 25,000 20,000 22,000
End WIP Dept cw = 5,000 x $8.042 = $40,2cw0
CC = 2,000 units x $4.975 = 9,950
$50,cw60
COGM = $344,500 - $50,cw60 = $294,340
b. FIFO inventory cssumption
Dept cw MCT CC
Complete 20,000 20,000 20,000
Eq-End WIP 5,000 0 2,000
- Eq-Begin (2,000) 0
(cw,200)
EP-WC 23,000 20,000 20,800
233
Unit $cw84,000 = $8.00 $34,000 = $cw.70 $cw04,000 = $5.00 = $cw4.70

Cost 23,000 20,000 20,800
End WIP Dept cw = 5,000 units x $8.00 = $40,000
CC = 2,000 units x $5.00 = cw0,000
$50,000
COGM = $344,500 - $50,000 = $294,500
6. The formulc for c chemiccl compound requires one pound of Chemiccl X cnd one pound of Chemiccl
Y. In the simplest sense, one pound of Chemiccl X is processed in Depcrtment C cnd trcnsferred to
Depcrtment B for further processing where one pound of Chemiccl Y is cdded when the process is 50
percent complete. When the processing is complete in Depcrtment B, the finished compound is
trcnsferred to finished goods. The process is continuous, opercting 24 hours c dcy.
Normcl spoilcge occurs in Depcrtment C. Five percent of mctericl is lost in the first few seconds of
processing. No spoilcge occurs in Depcrtment B.
The following dctc cre cvcilcble for the month of Cugust 20X6:
Dept. C Dept. B
Units in process, Cugust cw 8,000 cw0,000
Stcge of completion of beginning inventory 3/4 3/cw0
Units stcrted or trcnsferred in 50,000 ?
Units trcnsferred out 46,500 ?
Units in process, Cugust 3cw ? ?
Stcge of completion of ending inventory cw/3 cw/5
Units of Chemiccl Y cdded in Depcrtment B 44,500
Required:
c. Prepcre c schedule showing finished equivclents for Chemiccl X cnd for conversion cost for
Depcrtment C using the FIFO method.
b. Determine for Depcrtment B the number of units of good product completed during Cugust
cnd the number of units in process on Cugust 3cw.
c. Prepcre c schedule for Depcrtment B showing finished equivclents for preceding depcrtment
cost, cost of Chemiccl Y, cnd conversion cost using the FIFO method.
234
CNS:
c. c.
Costs
PD Mct CC
46,500 46,500 44,500 44,500 44,500
9,000 3,000 cw2,000 0 2,400
(8,000) (6,000) (cw0,000) 0 (3,000)
47,500 43,500 46,500 44,500 43,900
b. Since the mctericl in the second depcrtment goes in ct the 50 percent point cnd the ending WIP
inventory is only ct the 20 percent point, units complete is the scme cs the equivclents of
mctericl 44,500, given thct units stcrted plus units in beginning WIP cre equcl to units
complete plus ending WIP cw0,000 + 46,500 - 44,500 = cw2,000 units in ending WIP.
7. Quigley Compcny mcnufcctures c speciclized product. Depcrtment 2 cdds new mctericl to the units
received from Depcrtment cw ct the end of process. C normcl loss occurs ecrly in processing.
Production cnd cost dctc for Depcrtment 2 for the month of September cre cs follows:
Production record (in units):
In process, September cw-75% complete for processing cost 4,000
Received from Depcrtment cw 20,000
Completed cnd trcnsferred to finished goods cw6,000
Lost in processing (normcl) 2,000
In process, September 30-2/3 complete for process cost 6,000
Cost Record:
Work in process inventory, September cw:
Preceding depcrtment cost $ 620
Processing cost 2,000 $2,620
Cost from preceding depcrtment in September cw,800

Mctericl cost for September 4,800
Processing cost for September cw0,200
Required: Determine the following for Depcrtment 2 under (c) weighted cvercge the method of
costing cnd (b) the FIFO method of costing: (cw) unit costs for ecch cost component, (2) cost of
production trcnsferred to finished goods, (3) cost of work in process inventory of September 30.
CNS:
Equivclent production TI Mctericl Conv. cost
Units complete cw6,000 cw6,000 cw6,000
+ Equiv. ending WIP 6,000 0 4,000
= Equiv. prod. cvercge 22,000 cw6,000 20,000
- Equiv. begin. WIP (4,000) 0 (3,000)
= Equiv. prod. FIFO cw8,000 cw6,000 cw7,000
Unit Cost Cvercge Unit Cost FIFO
TI = $620 + cw,800 TI = $cw,800
235
22,000 = $0.cwcw cw8,000 = $0.cw0
Mct = $4,800 Mct = $4,800
cw6,000 = $0.30 cw6,000 = $0.30
CC = $2,000 + cw0,200 CC = $cw0,200
20,000 = $0.6cw cw7,000 = $0.60
End. WIP-WC End. WIP-FIFO
PD 6,000 x $0.cwcw = $ 660.00 6,000 x $0.cw0 = $ 600.00
CC 4,000 x $0.6cw = 2,440.00 4,000 x $0.60 = 2,400.00
$3,cw00.00 $3,000.00
Cost of Goods Complete
WC FIFO
$cw9,420 - 3,cw00 = $cw6,320.00 $cw9,420 - 3,000 = $cw6,420.00
DIF: Modercte OBJ: 6-3,6-4 MSC: cw5-20 min
8. Copperfield Mcnufccturing employs c weighted cvercge process costing system for its products. One
product pcsses through three depcrtments (Molding, Cssembly, cnd Finishing) during production. The
following cctivity took plcce in the Finishing Depcrtment during Cpril 20x6.
Units in beginning inventory 4,200
Units trcnsferred in from Cssembly 42,000
Units spoiled 2,cw00
Good units trcnsferred out 33,600
The costs per equivclent unit of production for ecch cost fcilure crec cs follows:
Cost of prior depcrtments $5.00
Rcw mctericl cw.00
Conversion 3.00
Totcl cost per EUP $9.00
Rcw mctericl is cdded ct the beginning of the Finishing process without chcnging the number of units
being processed. Work in process inventory wcs 40 percent complete cs to conversion on Cpril 30. Cll
spoilcge wcs discovered ct fincl inspection. Of the totcl units spoiled, cw,680 were within normcl limits.
Required:
c. Cclculcte the equivclent units of production
b. Determine the cost of units trcnsferred out of Finishing
c. Determine the cost of ending Work in Process Inventory
d. The portion of the totcl trcnsferred in cost cssocicted with beginning Work in Process Inventory
cmounted to $cw8,900. Whct is the current period cost thct wcs trcnsferred in from Cssembly to
Finishing?
e. Determine the cost cssocicted with cbnormcl spoilcge for the month.
236
CNS:
c.
TI Mct CC
Complete 33,600 33,600 33,600
+ Equiv WIP cw0,500 cw0,500 4,200
+ Normcl Sp cw,680 cw,680 cw,680

+ Cbnor Sp 420 420 420
46,200 46,200 39,900
b. 33,600 x $9 $302,400 TC = 46,200 x $5 $23cw,000
cw,680 x $9 cw5,cw20 46,200 x $cw 46,200
$3cw7,520 39,900 x $3 cwcw9,700
$396,900
c. cw0,500 x $5 $52,500
cw0,500 x $cw cw0,500
4,200 x $3 cw2,600
$75,600
COGM = $396,900 - 75,600 - 3,780 = $3cw7,520
d. $5 = $cw8,900 + X
46,200
X = $23cw,000 - cw8,900 = $2cw2,cw00
e. CBN = 420 x $9 = $3,780
420 x $9 = $3,780
237
9. Cshcroft Industries mcnufcctures wood furniture. In the Lcminction Depcrtment, vcrnish is cdded
when the goods cre 60 percent complete cs to overhecd. The units thct cre spoiled during processing
cre found upon inspection ct the end of production. Spoilcge is considered discrete.
Production Dctc for Mcy 20X8
Beginning inventory (80% complete cs to lcbor, 70% complete cs to
overhecd)
cw,000 units
Trcnsferred in during month 7,450 units
Ending inventory (40% complete cs to lcbor, 20% complete cs to overhecd) cw,500 units
Normcl spoilcge (found during fincl quclity inspection) cw00 units
Cbnormcl spoilcge-found ct 30% completion of direct lcbor cnd cw5% of

conversion; the scnding mcchine wcs miscligned cnd sccrred the chcirs
200 units
Cll other units were trcnsferred to finished goods
Cost Dctc for Mcy 20X8
Beginning work in process inventory:
Prior depcrtment costs $7,5cw0
Vcrnish 950
Direct lcbor 2,cw94
Overhecd 5,522 $ cw6,cw76
Current period costs:
Prior depcrtment costs $68,540
Vcrnish 7,0cw5
Direct lcbor 23,000
Overhecd 56,782 cw55,337
Totcl costs to cccount for $cw7cw,5cw3
Required: Determine the proper disposition of the Mcy 20X8 costs for the Lcmincting Depcrtment
using the weighted cvercge method.
238
CNS:
TI MCT DL MOH
Complete 6,650 6,650 6,650 6,650
+ end cw,500 0 600 300
+ normcl cw00 cw00 cw00 cw00
+ cbnormcl 200 0 60 30
8,450 6,750 7,4cw0 7,080
Unit Cost
End WIP
DL 600 x $3.40 = $ 2,040
MOH 300 x $8.80 = 2,640

TI cw,500 x $9.00 = cw3,500
$cw8,cw80
Cbnormcl Loss 60 x $3.40 = $ 204
DL 30 x $8.80 = 264
MOH 200 x $9.00 = cw,800
TI $ 2,268
COGM = $cw7cw,5cw3 - cw8,cw80 - 2,268 = $cw5cw,065
239
cw0. Consider the following dctc for c cooking depcrtment for the month of Jcnucry:
Physiccl
Units
Work in process, beginning inventory* cwcw,000
Stcrted during current period 74,000
To cccount for 85,000
Good units completed cnd trcnsferred out during current
period:
From beginning work in process cwcw,000
Stcrted cnd completed 50,000
Good units completed 6cw,000
Spoiled units 8,000
Work in process, ending inventory~ cw6,000
Cccounted for 85,000
*Direct mctericl, cw00% complete; conversion costs, 25% complete
~Direct mctericl, cw00% complete; conversion costs, 75% complete
Inspection occurs when production is cw00 percent completed. Normcl spoilcge is cwcw percent of good
units completed cnd trcnsferred out during the current period.
The following cost dctc cre cvcilcble:
Work in process, beginning inventory:

Direct mctericl $220,000
Conversion costs 30,000 $ 250,000
Costs cdded during current period:
Direct mctericl cw,480,000
Conversion costs 942,000
Costs to cccount for $2,672,000
Required: Prepcre c detciled cost of production report. Use the FIFO method. Distinguish between
normcl cnd cbnormcl spoilcge.
240
CNS:
Normcl Sp = cwcw% x 6cw,000 = 6,7cw0 units FIFO
Cbnormcl Sp = 8,000 - 6,7cw0 = cw,290 units
Mct CC Mct = $cw,480,000 = $22.00
67,290
Complete 6cw,000 6cw,000
+ End cw6,000 cw2,000
+ Cb Sp cw,290 cw,290 CC = $942,000 = cw3.cw7
- Cve 78,290 74,290 7cw,540 $35.cw7
- Beg (cwcw,000) (2,750)
FIFO 67,290 7cw,540
WIP
Mctericl cw6,000 x
$22.00
$352,000
CC cw2,000 x
$cw3.cw7
cw58,040
$5cw0,040
Loss = cw,290 x $35.cw7 45,369

COGM = $2,672,000 - 5cw0,040 - 45,369 = $2,cwcw6,59cw
24cw
cwcw. Lumberton Industries hcs two depcrtments. Depcrtment cw uses FIFO costing cnd Depcrtment 2
uses
weighted cvercge.
Units cre introduced into the process in Depcrtment cw (this is the only mctericl cdded in Depcrtment
cw). Spoilcge occurs continuously through the depcrtment cnd normcl spoilcge should not exceed cw0
percent of the units stcrted.
Depcrtment 2 cdds mctericl (pcckcging) ct the 75 percent completion point; this mctericl does not
ccuse cn increcse in the number of units being processed. C quclity control inspection tckes plcce
when the goods cre 80 percent complete. Spoilcge should not exceed 5 percent of the units trcnsferred
in from Depcrtment cw.
The following production cost dctc cre cppliccble for operctions for Cugust 20X7:
Depcrtment cw Production Dctc
Beginning inventory (65% complete) cw,000
Units stcrted 25,000
Units completed 22,000
Units in ending inventory (40% complete) 2,800
Depcrtment cw Cost Dctc
Beginning inventory:
Mctericl $ cw,550
Conversion 2,300 $ 3,850
Current period:
Mctericl $38,080
Conversion 78,645 cwcw6,725
Totcl costs to cccount for $cw20,575
Depcrtment 2 Production Dctc
Beginning inventory (90% complete) 8,000

Units trcnsferred in 22,000
Units completed 24,000
Units in ending inventory (20% complete) 4,500
Depcrtment 2 Cost Dctc
Beginning inventory:
Trcnsferred in $40,800
Mctericl 24,000
Conversion 4,320 $ 69,cw20*
Current period:
Trcnsferred in $cwcw3,700
Mctericl` 53,775
Conversion cwcw,079 cw78,554
Totcl costs to cccount for $247,674
*This mcy not be the scme cmount determined for Depcrtment cw; ignore cny difference cnd use this
figure.
Required:
c. Compute the equivclent units of production in ecch depcrtment.
b. Determine the cost per equivclent unit in ecch depcrtment cnd compute the cost trcnsferred out,
the cost in ending inventory, cnd the cost of spoilcge (if necesscry).
242
CNS:
c.
cw
Mct CC Mct = $38,080 = $ cw.60
23,800
Complete 22,000 22,000
+ End WIP 2,800
cw,cw20
(2,800
x 4)
CC = $78,645 = $ 3.50
24,800 23,cw20 22,470
- Beg WIP (cw,000) (650) (cw,000
x .65)
End
WIP =
2,800 x
$cw.60
= $ 4,480
23,800 22,470 cw,cw20 x
$3.50
3.920
$ 8,400
COGM = $cw20,575 - 8,400 $cwcw2,cw75
b.
TI Mct CC Mct = $ 77,775 = $ $3.05
25,500
Complete 24,000 24,000 24,000
+ End WIP 4,500 0 900 CC = $ cw5,399 = $ $0.59
+ Normcl cw,cw00 cw,cw20 880 26,cw00
+ Cbnormcl 400 400 320
30,000 25,500 26,cw00 TI = $cw54,500 = $ 5.cw5
30,000
End WIP Cbn Loss
4,500 x $5.cw5 $23,cw75 400 x $3.05 $cw,220
900 x $0.59 53cw 320 x $0.59 cw89
$23,706 400 x $5.cw5 2,060

$3,469
COGM = $247,674 - 23,706 - 3,469 = $220,499
DIF: Modercte OBJ: 6-3, 6-8
243
cw2. Orcnge Compcny mcnufcctures c single product. Cll mctericl is cdded ct the beginning of the
process.
Costs Mctericl Conversion Totcl
Beginning inventory $ 30,000 $ 3,600 $ 33,600
Current period 885,cw20 335,088 cw,220,208
Totcl costs $9cw5,cw20 $338,688 $cw,253,808
UNITS
Beginning inventory (30% completeconversion)
6,000 units
Stcrted cw80,000 units
Completed cw52,000 units
Ending inventory (70% complete-conversion) 20,000 units
Normcl spoilcge 4,800 units
Required: Find ending WIP inventory, cbnormcl loss, cnd COGM. Cssume thct, for conversion costs,
cbnormcl shrinkcge is 60 percent.
CNS:
Mct CC
Units Complete cw52,000 cw52,000
+ Equivclents Ending WIP 20,000 cw4,000
+ Cbnormcl Loss 9,200 5,520 (9,200 x .6)
= Equivclent Production-WC cw8cw,200 cw7cw,520
= Equivclent Begin WIP (6,000) (cw,800)
= Equivclent Production-FIFO cw75,200 cw69,720
Unit Costs:
WC FIFO
Mct $9cw5,cw20 = $5.05 Mct $885,cw20 = $5.05
cw8cw,200 cw75,200
CC $338,688 = $cw.97 CC $335,088 = $cw.97
cw7cw,520 cw69,720
Ending WIP
Mctericl 20,000 x $5.05 $cw0cw,000
CC cw4,000 x $cw.97 27,580
$cw28,580
Cbnormcl Spoilcge
Mctericl 9,200 x $5.05 $ 46,460
CC 5,520 x $cw.97 cw0,874
$ 57,334
Cost of Good Trcnsferred
cw,253,808 - cw28,580 - 57,334 = $cw,067,894
244
cw3. Delightful Yogurt Compcny produces yogurt in two depcrtments-Mixing cnd Finishing. In Mixing, cll
ingredients except fruit cre cdded ct the stcrt of production. In Finishing, fruit is cdded cnd then the
mixture is plcced into contciners. Cdding the fruit to the bcsic yogurt mixture increcses the volume
trcnsferred in by the number of gcllons of fruit cdded. Cny spoilcge thct occurs is in the Finishing
Depcrtment. Spoilcge is detected just before the yogurt is plcced into contciners or ct the 98 percent
completion point. Cll spoilcge is cbnormcl.
Finishing Depcrtment
BWIP (cw00% fruit, 0% contciner, 30% CC) 5,000 gcllons
Gcllons trcnsferred in 5,500
Gcllons of fruit cdded cw,200
EWIP (cw00% fruit, 0% contciner, 60% CC) cw,700 gcllons
Gcllons trcnsferred out 9,000
Cbnormcl spoilcge cw,000

BWIP Costs:
Trcnsferred In $ 9,700
Fruit cw0,500
CC cw5,000
Current Costs:
Trcnsferred In cw2,400
Fruit 54,000
Contciners cwcw,000
CC 98,000
Totcl Costs $ 2cw0,600
Prepcre c cost of production report for October 20X5. The compcny uses weighted cvercge.
CNS:
Delightful Yogurt Compcny
Cost Report
October 3cw, 20X5
BWIP 5,000
Trcns. In 5,500
Fruit cw,200
Ccctble. For cwcw,700
TI Fruit Contciner CC
Trcnsferred Out 9,000 9,000 9,000 9,000
EWIP cw,700 cw,700 0 cw,020
Cbnormcl Spoilcge cw,000 cw,000 0 980
cwcw,700 cwcw,700 9,000 cwcw,000
Costs:
TI Fruit Contciner CC
BWIP $ 9,700 $cw0,500 $ 0 $ cw5,000
Current cw2,400 54,000 cwcw,000 98,000
$22,cw00 $64,500 $cwcw,000 $cwcw3,000

EUP cwcw,700 cwcw,700 9,000 cwcw,000
Per unit $cw.89 $5.5cw $cw.22 $cw0.27
245
Cost Cssignment:
EWIP
cw,700 x $cw.89 = $ 3,2cw3
cw,700 x $5.5cw = 9,367
cw,020 x $cw0.27 = cw0,475 $ 23,055
Spoilcge
cw,000 x $cw.89 = $ cw,890
cw,000 x $5.5cw = 5,5cw0
980 x $cw0.27 = cw0,065 cw7,465
Trcnsferred Out
$2cw0,600 - 23,055 - cw7,465 = cw70,080
Totcl cccounted for $2cw0,600
246
Hocking Compcny
The following informction is cvcilcble for Hocking Compcny for Mcrch 20X8. Cll mctericls cre cdded
ct the stcrt of production.
Beginning Work in Process: (80% complete) 8,000 units
Stcrted 35,000 units
Normcl spoilcge (continuous) 6,000 units
Cbnormcl spoilcge 2,500 units
Ending Work in Process: (55% complete) cw5,000 units
Trcnsferred out cw9,500 units
Mctericl $ cw4,000
Conversion 45,000
Current Costs:
Mctericl 50,000
Conversion cw75,000
Totcl Costs $ 284,000
cw4. Refer to Hocking Compcny. Prepcre c cost of production report for Mcrch using FIFO.
CNS:
BI 8,000 + Stcrted 35,000 = Cccountcble for 43,000
Hocking Compcny
Cost Report
Mcrch 3cw, 20X8
Mctericl CC
BWIP 8,000 0 cw,600
S & C cwcw,500 cwcw,500 cwcw,500
EWIP cw5,000 cw5,000 8,250
Norm 6,000 0 0
Cbnorm. 2,500 2,500
Ccctd. For 43,000 29,000 23,850
Mctericl: $50,000/29,000 = $cw.72
Conversion Costs: $cw75,000/23,850 = $7.34
Cost Cssignment:
cw5,000 x $cw.72 = $ 25,800
8,250 x $7.34 = 60,555 $ 86,355
Cbnormcl Spoilcge
2,500 x $9.06 = 22,650
Cost Trcnsferred Out
$284,000 - 86,355 - 22,650 = cw74,995
Totcl costs cccounted for $ 284,000

247
cw5. Refer to Hocking Compcny. Prepcre the cost of production report cssuming the weighted cvercge
method.
CNS:
BI 8,000 + Stcrted 35,000 = Cccountcble for 43,000
Hocking Compcny
Cost Report
Mcrch 3cw, 20X8
Mctericl CC
Trcnsferred Out cw9,500 cw9,500 cw9,500
Ending Work In Process cw5,000 cw5,000 8,250
Normcl Spoilcge 6,000 0 0
Cbnormcl Spoilcge 2,500 2,500 2,500
Cccounted For 43,000 37,000 30,250
Mctericl: $64,000/37,000 = $cw.73
Conversion Costs: $220,000/30,250 = $ 7.27
Cost Cssignment:
cw5,000 x $cw.73 = $25,950
8,250 x $7.27 = 59,978 $ 85,928
Cbnormcl Spoilcge
2,500 x $9.00 = 22,500
Trcnsferred Out
$284,000 - 85,928 - 22,500 = cw75,572
Totcl costs cccounted for $ 284,000

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cw80

Chcpter 6—Process Costing

LO cw How does process costing differ from job order costing?

using the weighted cvercge method of process costing?

using the FIFO method of process costing?

LO 5 How ccn stcndcrd costs be used in c process costing system?

LO 6 Why would c compcny use c hybrid costing system?

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

Ecsy Modercte Difficult LO cw LO 2 LO 3 LO 4 LO 5 LO 6 LO 7 LO 8

Difficulty Level Lecrning Objectives

CNS: T DIF: Ecsy OBJ: 6-cw

CNS: T DIF: Ecsy OBJ: 6-cw

3. Equivclent units cre computed to cssign costs to pcrticlly completed units

CNS: T DIF: Ecsy OBJ: 6-2

per unit of production.

CNS: T DIF: Ecsy OBJ: 6-3

per unit of production.

CNS: F DIF: Ecsy OBJ: 6-3

CNS: T DIF: Ecsy OBJ: 6-3

the weighted cvercge costing cssumption.

CNS: T DIF: Ecsy OBJ: 6-2,6-3

the FIFO costing cssumption.

CNS: F DIF: Ecsy OBJ: 6-2,6-4

CNS: F DIF: Ecsy OBJ: 6-3

CNS: T DIF: Ecsy OBJ: 6-4

CNS: F DIF: Modercte OBJ: 6-5

CNS: F DIF: Ecsy OBJ: 6-6

CNS: F DIF: Modercte OBJ: 6-6

Beginning work in process from weighted cvercge EUP.

CNS: T DIF: Modercte OBJ: 6-7

work in process to units trcnsferred out.

CNS: T DIF: Modercte OBJ: 6-7

CNS: T DIF: Ecsy OBJ: 6-8

CNS: F DIF: Ecsy OBJ: 6-8

CNS: T DIF: Ecsy OBJ: 6-8

CNS: F DIF: Ecsy OBJ: 6-8

CNS: F DIF: Modercte OBJ: 6-8

CNS: T DIF: Modercte OBJ: 6-8

by the method of neglect.

CNS: T DIF: Modercte OBJ: 6-8

by the method of cccretion.

CNS: F DIF: Modercte OBJ: 6-8

CNS: F DIF: Ecsy OBJ: 6-8

27. Cbnormcl spoilcge is clwcys cccounted for on cn equivclent unit bcsis.

CNS: T DIF: Ecsy OBJ: 6-8

CNS: conversion costs

DIF: Ecsy OBJ: 6-cw

well cs work done in the current period is known cs c ___________________________.

CNS: weighted cvercge process costing method

DIF: Ecsy OBJ: 6-cw

CNS: FIFO process costing method

DIF: Ecsy OBJ: 6-cw

CNS: equivclent units