Final Exam on Cost accounting SET A

1. Which cost accumulation procedure is most applicable in continuous mass production manufacturing environments?
a. Standard c. Process
b. Actual d. Job order

2. The product flow format where certain portions of the work are done simultaneously and then brought together for
completion is called
a. Applied c. Standard
b. Parallel d. Sequential

3. A true process costing system could make use of each of the following, except
a. Standard costs c. Variable costing
b. Individual lots d. Responsibility accounting

4. In a process cost system, the application of factory overhead usually is recorded as an increase in
a. Cost of goods sold c. Factory overhead control
b. Work in process inventory control d. Finished goods inventory control

5. Which of the following characteristics applies to process costing but not job order costing?
a. Identifiable batches of production c. Averaging process
b. Equivalent units of production d. Use of standard costs

6. A characteristic of a process costing system is that

a. Costs are accumulated by order
b. It is used by company manufacturing custom machinery
c. It requires a lot more detailed accounting than does a job order costing
d. Work in process inventory is restated in term of completed units

7. Equivalent units of production are equal to the

a. Units completed by a production department in the period
b. Number of units worked on during the period by a production
c. Number of whole units that could have been completed it all work of the period had been used to produce whole units
d. Identifiable units existing at the end of the period in a production department

8. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is
found by dividing which of the following by EUP?
a. Only current period cost
b. Current period cost plus the cost of the beginning inventory
c. Current period cost less the cost of the beginning inventory
d. Current period cost plus the cost of the ending inventory

9. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units
a. Started and completed during the period
b. Residing in beginning work in process inventory
c. Residing in ending work in process inventory
d. Uncompleted in work in process inventory

10. When added materials in subsequent departments result in an increase of the units produced, the unit transferred in
cost will
a. Be reclassified as new materials
b. Be increased to provide for the additional units
c. Be accounted for under the FIFO costing method
d. Be decreased as they are spread over more units

11. If a company reports two different unit costs for goods transferred to the next department, it is reasonable to assume
that
a. The department accounts for lost units at the end of the process
b. A FIFO costing method is used
c. Lost unit costs are computed separately
d. An average costing method is used
12. In a production cost report using process costing, transferred in costs are similar to
a. Direct materials added at a point during the process
b. Conversion costs added during the process
c. Costs transferred to the next process
d. Costs included in beginning inventory

13. What are transferred in costs in a process costing system?

a. Labor costs incurred for transferring employees from another department within the same plant instead of hiring
temporary workers from the outside
b. Costs of the product of a previous internal process that is subsequently used in a succeeding internal process
c. Supervisory salaries that are transferred from an overhead cost center to a production cost center
d. Ending work in process inventory of a previous process that will be used in a succeeding process

14. Purchased direct materials are added in the second department of a three-department process. This addition increases
the number of units produced in the second department and will
a. Always change the direct labor cost percentage in the ending work in process inventory
b. Never cause an adjustment to the unit cost transferred in from the first department
c. Always increase total unit costs
d. Always decrease total ending work in process inventory

15. D Company presents the following production data for the month of May 2020:
Opening inventory 3/8 completed 4,000 units
Started in process 13,000 units
Transferred 9,000 units
Closing inventory 1/2 completed 4,000 units
3/4 completed 4,000 units

What are the equivalent units of production for the month of May 2020?
FIFO Average
a. 12,500 units 13,000 units
b. 17,000 units 12,500 units
c. 12,500 units 14,000 units
d. 15,000 units 14,000 units

16. R Company had 3,000 units in work in process at April 1, 2020, which was 60% complete as to conversion cost.
During April, 10,000 units were completed. At April 30, 4,000 units remained in work in process which was 40%
complete as to conversion cost. Direct materials are added at the beginning of the process. How many units were started
during April?
a. 9,000
b. 9,800
c. 10,000
d. 11,000

17. O Company has a process costing system using FIFO cost flow method. All materials are introduced at the beginning
of the process in Department 1. The following information is available for the month of January 2020:
Work in process, 1/1/20 (40% complete as to conversion costs) 500 units
Started in January 2,000 units
Transferred to Department 2 during January 2,100 units
Work in process, 1/31/20 (25% complete as to conversion costs) 400 units

What are the equivalent units of production for the month of January 2020?
Materials Conversion
a. 2,500 2,200
b. 2,500 1,900
c. 2,000 2,200
d. 2,000 2,000
18. A Company’s production cycle starts in the Mixing Department. The following information is available for the month
of April 2020:
Work in process, April 1 (50% complete) 40,000 units
Started in April 240,000 units
Work in process, April 30 (60% complete) 25,000 units

Materials are added in the beginning of the process in the Mixing Department. Using the weighted average method, what
are the equivalent units of production for the month of April 2020?
Materials Conversion
a. 240,000 250,000
b. 255,000 255,000
c. 270,000 280,000
d. 280,000 270,000

19. Materials are added at the start of the process in J Company’s cutting department, the first stage of the production
cycle. The following information is available for the month of March 2020:
Work in process, March 1 (60% complete as to conversion costs) 60,000 units
Started in March 150,000 units
Transferred to the next department 110,000 units
Lost in production 30,000 units
Work in process, March 31 (50% complete as to conversion costs) 70,000 units

Under J’s cost accounting system, the costs incurred on the lost units are absorbed by the remaining good units. Using the
FIFO method, what are the equivalent units for the materials unit cost calculation?
a. 120,000 c. 180,000
b. 145,000 d. 210,000

20. B Company, using the FIFO process cost system, has the following data for the month of April
Percent Complete
Actual Units Materials Conversion Cost
Beginning inventory 15,000 100% 40%
Transferred in 150,000
Transferred out 120,000
Ending inventory 45,000 100% 30%

What are the equivalent units of production for the month of April?
Materials Conversion Costs
a. 150,000 127,500
b. 165,000 139,500
c. 135,000 124,500
d. 150,000 133,500

21. E Company input all materials at the start of operations in Process 1. The inventory is processed at the beginning of
January consisted of 4,000 units with a total cost of materials of 100,000 and labor and overhead of 20,000. In January,
20,000 units were started in process with material cost of 500,000. Labor and overhead in January cost is 280,000. As of
end of January, the inventory was 100% complete in materials but only 60% in labor and overhead. The ending inventory
consisted of 10,000 units. The equivalent units of labor and overhead for the month of January amounted to:
a. 20,000 c. 26,000
b. 10,000 d. 30,000

22. Y Company computed the flow of physical units completed for Department M for the month of March 2020 as
follows:
Units completed:
From WIP on March 1, 2020 15,000
From March production 45,000

Materials are added at the beginning of the process. The 12,000 units of work in process at March 31, 2020 were 80%
complete as to conversion costs. The work in process at March 1, 2020 was 80% complete as to conversion costs. Using
the FIFO method, the equivalent units for March conversion costs were:
a. 55,200 c. 60,600
b. 57,000 d. 63,600