AFAR.

08 Process Costing (DRILL)

Question 1
Ten-ten Company produces a small standard component in a process operation. There
is a quality control check at the end of the processing. Items which fail this check are
sold off as scrap for P1.80 per unit. The expected rate of rejection is 10%. Normal loss
is not given a cost except that whatever scrap value it has is credited to the process
account. The cost/value of the abnormal loss or gain, net of scrap, is written off to the
profit and loss account.

Data for July are as follows:

Materials input 1,000 units P5,100

Conversion cost P3,000

Output to finished goods    800 units

 
What was the full cost of the finished output that passed the quality control check?
Response: P7,200
Correct answer: P7,040
Score: 0 out of 1 No

Question 2
Complete the following process account of Lei Manufacturing Company by supplying
the peso amounts of (A) and (B) on the credit side of the account.

Process Y

May 1 May 1-31

6,000 units P4,800 16,000 units completed (A)

1/3 completed
 May 1-31 May 31

Mat. 12,000 @ P0.50 6,000 2,000 units- ½ completed

Labor 3,600

Overhead 5,400

 
The peso amount of the 2,000 units ½ completed (B) is
Response: P1,600
Correct answer: P1,600
Score: 1 out of 1 Yes

Question 3
From the following data, question 16 to 18 should be answered.

Opening inventory 4,000 units

Percentage of
Value
Completion

Materials 100% P1,992

Labor 50% 1,074

Overhead 50% 846

Put in process 20,000 units

Materials value P12,000

Labor 9,984
 Overhead is 100% of labor cost

Units completed and transferred 21,000 units

Units in process at the end 3,000 units

Materials 100%

Labor and overhead 60%

 
The equivalent production for material is
Response:
Under Average - 20,000
Under FIFO - 24,000
Correct answer:
Under Average - 24,000
Under FIFO - 20,000
Score: 0 out of 1 No

Question 4
From the following data, question 16 to 18 should be answered.

Opening inventory 4,000 units

Percentage of
Value
Completion

Materials 100% P1,992

Labor 50% 1,074

 Overhead 50% 846

Put in process 20,000 units

Materials value P12,000

Labor 9,984

Overhead is 100% of labor cost

Units completed and transferred 21,000 units

Units in process at the end 3,000 units

Materials 100%

Labor and overhead 60%

 
The equivalent production labor and overhead is
Response:
Under Average - 22,800
Under FIFO - 20,800
Correct answer:
Under Average - 22,800
Under FIFO - 20,800
Score: 1 out of 1 Yes

Question 5
Complete the following process account of Lei Manufacturing Company by supplying
the peso amounts of (A) and (B) on the credit side of the account.
 Process Y

May 1 May 1-31

6,000 units P4,800 16,000 units completed (A)

1/3 completed

May 1-31 May 31

Mat. 12,000 @ P0.50 6,000 2,000 units- ½ completed

Labor 3,600

Overhead 5,400

 
The peso amount of the 16,000 units completed (A) is
Response: P16,400
Correct answer: P18,200
Score: 0 out of 1 No

Question 6
Lucas Co. adds materials in the beginning of the process in the Forming Dept., which is
the first of two stages of its production cycle. Information converting the materials used
in the Forming Dept. in October are as follows:

Units Costs

Work in process, Oct.1   6,000 P3,000

Units started in October 50,000 25,560

 Units comp. & transf. to next dept. 44,000

 
Using the weighted-average method, what was the materials cost of work in process at
October 31?
Response: P5,250
Correct answer: P6,120
Score: 0 out of 1 No

Question 7
On April 1, the Collins Co. had 6,000 units of work in Dept. B, the second and last stage
of their production cycle. The costs attached to these 6,000 units were P12,000 of costs
transferred in from Dept. A, P2,500 of material cost added in Dept. B and P2,000 of
conversion cost added in Dept. B. Materials are added in the beginning of the process
in Dept. B. Conversion was 50% complete on April 1. During April, 14,000 units were
transferred in from Dept. A at a cost of P27,000 and materials costs of P3,500 and
conversion costs of P3,000 were added in Dept. B. On April 30, Dept. B had 5,000 units
in work in process 60% complete as to conversion costs. The costs attached to these
5,000 units were P10,500 of costs transferred in from Dept. A, P1,800 of material costs
added in Dept. B and P800 of conversion costs added in Dept. B.
Using the weighted average method, the equivalent units for the month of April were:
Response:
Transfer-in from Dept. A - 20,000
Materials - 20,000
Conversion - 18,000
Correct answer:
Transfer-in from Dept. A - 20,000
Materials - 20,000
Conversion - 18,000
Score: 1 out of 1 Yes

Question 8
Sangley, Inc. manufactures a product which goes through three consecutive processes,
Process 1, Process 2, and Process 3. Data for the month of September, 2021 are as
follows:
 PROCESS1 PROCESS2 PROCESS3

Work in Process, beg. P8,000 P13,000 P2,000

Materials added 20,000     4,000  5,000

Conversion costs 10,000   10,000 16,000

Closing work in process   6,000 9,000 4,000

 
What was the value of the output transferred from Process 3 to the finished goods
warehouse for the month of September?
Response: P65,000
Correct answer: 69,000
Score: 0 out of 1 No

Question 9
From the following data, question 16 to 18 should be answered.

Opening inventory 4,000 units

Percentage of
Value
Completion

Materials 100% P1,992

Labor 50% 1,074

Overhead 50% 846

Put in process 20,000 units

 Materials value P12,000

Labor 9,984

Overhead is 100% of labor cost

Units completed and transferred 21,000 units

Units in process at the end 3,000 units

Materials 100%

Labor and overhead 60%

 
The total cost of the work in process at the end is
Response:
Under Average - 3,528
Under FIFO - 3,477
Correct answer:
Under Average - 3,477
Under FIFO - 3,528
Score: 0 out of 1 No

Question 10
On April 1, the Collins Co. had 6,000 units of work in Dept. B, the second and last stage
of their production cycle. The costs attached to these 6,000 units were P12,000 of costs
transferred in from Dept. A, P2,500 of material cost added in Dept. B and P2,000 of
conversion cost added in Dept. B. Materials are added in the beginning of the process
in Dept. B. Conversion was 50% complete on April 1. During April, 14,000 units were
transferred in from Dept. A at a cost of P27,000 and materials costs of P3,500 and
conversion costs of P3,000 were added in Dept. B. On April 30, Dept. B had 5,000 units
in work in process 60% complete as to conversion costs. The costs attached to these
5,000 units were P10,500 of costs transferred in from Dept. A, P1,800 of material costs
added in Dept. B and P800 of conversion costs added in Dept. B.
Using the weighted average method, what was the cost per equivalent unit for
conversion costs?
Response: P5,800/18,000
Correct answer: P5,800/18,000
Score: 1 out of 1