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DR. YANGAS COLLEGES, INC.

(Formerly Dr. Yangas Francisco Balagtas Colleges) Wakas, Bocaue, Bulacan College of Accountancy Assignment 1 Introduction to Process Costing Cost Accounting Part II
NAME: _________________________________________ DATE: _________________ COURSE: _________________ YEAR/SECTION: _____________ SCORE: ___________ Encircle the best answer (Use ball pen only and no erasures allowed): 1. A true process costing could make use of each of the following except: A. Standard cost C. Variable costing B. Individual lots D. Responsibility accounting AICPA 2. A corporation manufactures two brands of barbed wire fencing for sale to wholesalers and large ranchers. Which of the following would be the best type of costing system for such company to use? A. EOQ system C. Process system B. Job order system D. Retail inventory system CIA 3. In a process cost system, the application of factory overhead usually is recorded as in increase in A. Cost of goods sold C. Factory overhead control B. Work in process inventory control D. Finished goods inventory control AICPA 4. Which of the following characteristics applies to process costing but not to job order costing? A. Identifiable batches of production C. Average process B. Equivalent units of production D. Use of standard costs AICPA 5. An equivalent unit of direct materials or conversion cost is equal to A. The amount of direct materials or conversion cost necessary to complete one unit of production. B. A unit of work in process inventory. C. The amount of direct materials or conversion cost necessary to start a unit of production in work in process. D. Fifty percent of the direct materials or conversion cost of a unit of finished goods inventory (assuming a linear production pattern). AICPA 6. The completion of goods is recorded as a decrease in work in process control when using Job order costing Process costing A. Yes No B. Yes Yes C. No Yes D. No No

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7. The following pertains to a companys Finishing Department operation in May Units Work in process, May 1 Units started in May Units completed and finished goods Work in process, May 31 transferred to % completion 2,000 40% 10,00 0 8,000 ? 25%

Materials are added at the end of the process and conversion costs are incurred evenly throughout the process. The equivalent units of materials added during May were A. 8,000 B. 8,200 C. 9,100 D. 10,000 CIA 8. In a given process costing system, the EUP are computed using the weighted average method. With respect to conversion costs, the percentage of completion for the current period only is included in the calculation of the Beginning WIP Ending WIP A. No No B. No Yes C. Yes No D. No Yes

9.

Assuming no beginning work in process inventory and that the ending work in process inventory is 50% complete as to conversion costs, the number of equivalent units as to conversion costs would be AICPA A. The same as the units completed C. Less than the units completed B. The same as the units placed in process D. Less than the units placed in process 10. A company employs a process cost system using FIFO method. The product passes through both department 1 and department 2 in order to be completed. Units enter department 2 upon completion in department 1. Additional direct materials are added in department 2 when the units have reached the 25% stage of completion with respect to conversion costs. Conversion costs are added proportionally in department 2. The production activity in department 2 for the current month was as follows: Beginning work in process inventory (40% complete with respect to conversion costs) Units transferred in from department 1 Units to account for Units completed and transferred to finished goods Ending work in process inventory (20% complete with respect to conversion 15,000 80,000 95,000 85,000 10,000

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costs) Units accounted for

95,000

How many equivalent units for direct materials were added in department 2 for the current month? A. 70,000 units B. 80,000 units C. 85,000 units D. 95,000 units CIA 11.The following data pertain to a companys cracking department operations in December: Units Work in process, December 1 Units started Units completed and transferred Work in process, December 31 20,000 170,00 0 180,00 0 10,000 Completi on 50%

50%

Materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Assuming the use of FIFO method of process costing, the equivalent units of conversion performed during December were: A. 170,000 units B. 175,000 units C. 180,000 units D. 185,000 units CIA 12.With a beginning inventory of 20,000 units in work in process that were 30% complete, a hard goods manufacturer completed 190,000 units in 2010 and finished the year with 15,000 units in work in process that were only 20% complete. Using the FIFO method, what is the number of equivalent units of production? A. 187,000 B. 193,000 C. 196,000 D. 205,000 CIA 13.Department Z of Capricorn Manufacturing Corporation had the following data for the month of October 2010: Beginning work in process, 70% complete Started in process during the month Ending work complete in process, 80% 40,000 units 300,000 units 60,000 units

The cost of the beginning work in process was P140,000 and the production cost for the month amounted to P1,172,000. How many equivalent production units were completed in October 2010? A. 280,000 B. 300,000 C. 320,000 D. 340,000 RPCPA 14.Taurus Corp. produced 280,000 complete units of product plus 10,000 incomplete units which where half done. Direct materials, which was introduced at the start of processing, cost P435,000 while conversion cost amounted to

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P142,500. There were no beginning inventories. The equivalent units that were complete as to conversion cost were: A. 142,500 B. 280,000 C. 285,000 D. 290,000 RPCPA

15. Combo, Inc. inputs all materials at the start of processing in department 1.
The inventory process on May 1 of 4,000 units had materials cost of P75,000 and conversion cost of P25,000. During May, 20,000 units are started in process with materials cost of P375,000 and conversion cost of P!50,000. On May 31, the inventory in process of 10,000 units have 100% material but are only 60% converted. The equivalent production for conversion cost for the month of May was: A. 10,000 units B. 14,000 units C. 20,000 units D. 26,000 units RPCPA 16. Procter and Gamble, Inc.s production process begins in the Extruding department. Data for this department for October 2010 are shown below: Opening work in process (50% complete) Started in production during the month Closing work in process (60% complete) 40,000 240,00 0 25,000

Direct materials are added at the start of operation. Assuming weighted average method was used, what was the Extruding departments equivalent units of production for conversion cost? A. 240,000 B. 250,000 C. 260,000 D. 270,000 RPCPA 17. Pure Spring Water Co. bottles spring water. The spring water first undergoes filtration in department 1 and is eventually bottled in department 2. A quantity schedule for 2010 follows: Department 1 Units started in process Units transferred department 2 Units received department 1 to from 110,00 0 80,000 30,000

Department 2 Units received from department 1 Units transferred to finished stock Units in process, end

80,000 61,400 18,600

Units in process at the end of both departments are 72% through the process. In department 2, what is the equivalent production for conversion cost? A. 61,400 B. 68,929 C. 74,792 D. 80,000 RPCPA

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18. Department A is the first stage of Davao Companys production cycle. The following information is available for conversion cost for the month of April: Work in process, April 1 (40% complete) Started in April Completed in April and transferred to next department Work in process, april 30 (60% complete) Units 40,000 320,00 0 340,00 0 20,000

Using FIFO method, the equivalent finished units for conversion cost calculations are: A. 320,000 B. 336,000 C. 352,000 D. 360,000 AICPA 19.Rizal Company computed the flow of physical units completed for department M for the month of March 2010 as follows: Units completed From work in process on March 1, 2010 From March production 15,00 0 45,00 0 60,00 0

Materials are added at the beginning of the process. The 12,000 units of work in process at March 31, 2010, were 80% complete as to conversion costs. The work in process at March 1, 2010, was 60% complete as to conversion costs. Using the FIFO method, the equivalent units for March conversion costs were: A. 55,200 B. 57,000 C. 60,600 D. 63,600 AICPA 20.A factory transferred 8,800 completed units during its second period of operations. At the beginning of the period, 400 units were 75% complete. At the end of the period, 800 unites were 50% complete. Assume the FIFO costing method is used. The equivalent production for the period was: A. 9,000 units B. 8,900 units C. 8,800 units D. 8,700 units CIA 21.Beginning work in process was 60% complete as to conversion costs and ending work in process was 45% complete as to conversion costs. The peso amount of the conversion cost included in ending work in process (using the weighted average method) is determined by multiplying the average units conversion costs by what percentage of the total units in ending work in process? A. 100% B. 60% C. 55% D. 45% AICPA Bobson Company had 6,000 units in work in process at January 1, 2011 which were 60% complete as to conversion costs. During January 20,000 units were completed. At January 31, 2011, 8,000 units remained in work in process which were 40% complete as to conversion costs. Materials are added at the beginning of the process.

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22.Using the weighted average method, the equivalent units for January for conversion cost were: A. 19,600 B. 22,400 C. 23,200 D. 25,600 AICPA 23.How many units were started during January? A. 18,000 B. 19,600 C. 20,000 D. 22,000 AICPA

The Cost department of Masbate Corporation operated a process cost system using the average method. Production records showed the following data for one of the thee production departments: Product received from previous department Product finished and sent to next department Product finished and remaining in this department Product unfinished in this department 100,000 kilos 71,840 kilos 4,160 kilos 24,000 kilos

In this department additional material is added to the work received from the preceding department. Three distinctly different types of materials are used at three separate stages of production in this department. Material A is added at the start of the process. Material B is added when the process is one-fourth completed. Material C is added when the process is three-fourth completed.

Labor and factory overhead are incurred at a uniform rate throughout the manufacturing process in this department. Examination of the unfinished work discloses that: 1/4 was 7/8 completed. 1/2 was 1/2 completed. 1/4 was 1/6 completed. 24.The equivalent production figure for material A would be: A. 80,000 B. 90,000 C. 100,000 D. 85,000 25.The equivalent production figure for material B would be: A. 95,000 B. 92,000 C. 94,000 D. 90,000 26.The equivalent production figure for material C would be: A. 85,000 B. 80,000 C. 82,000 D. 76,000 27.The equivalent production figure for labor and overhead would be: A. 92,500 B. 88,250 C. 85,250 D. 90,350 Department II of Winston Manufacturing Company presents their production data for the month of May 2011 below: Opening inventory, completed Started in process 3/8 4,000 units 10,000

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Transferred Closing inventory, 1/2 completed 3/4 completed

units 9,000 units 4,000 units 4,000 units

28.Using the FIFO method, the equivalent production of department II for the month of May is A. 12,500 units B. 15,500 units C. 18,000 units D. 19,000 units RPCPA 29.Assuming the average cost method is used, the equivalent production figure for department II is A. 12,500 units B. 14,000 units C. 15,500 units D. 18,000 units RPCPA

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On November 1, Ding Company had 20,000 units of work in process in Department I which were 100% complete as to materials costs and 20% complete as to conversion costs. During November, 160,000 units were started in Department I and 170,000 units were completed and transferred to Department II. Work in process on November 30 was 100% complete as to conversion costs. By what amount would the equivalent units for conversion costs for the month of November differ if the FIFO method were used instead of the weighted average method? RPCPA A. 20,000 decrease B. 16,000 decrease C. 8,000 decrease D. 4,000 decrease

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