Deck 5: Process Costing

Question 1

Conversion costs consist of

A)direct materials and direct labour.
B)direct materials and manufacturing overhead.
C)direct labour and manufacturing overhead.
D)direct labour and transferred-in costs.

Answer 1

C

Question 2

When computing equivalent units of production, the method that combines partially completed units in beginning inventory with current period production is the

A)FIFO method.
B)LIFO method.
C)weighted average method.
D)specific identification method.

Answer 2

C

Question 3

Figure 5-1
The Flanders Ltd. produces a product that passes through two processes. During June, the first department transferred 15,000 units to the second department. Materials are added uniformly in the second process. The following information was provided about the second department's operations during June: Units, beginning work in progress $\quad$$\quad$ 5,000
Units, ending work in progress $\quad$$\quad$$\quad$ 7,000

-Refer to Figure 5-1. The Flanders Corporation's units started in the second department during April would be

A)20,000.
B)15,000.
C)10,000.
D)8,000.
E)22,000.

Answer 3

15,000.

Question 4

In a process used by Kane Company, conversion cost is incurred uniformly throughout the process. Material is added at the end of the process. Which of the following statements is true?

A)Kane Company cannot use process costing and must use job-order costing.
B)Kane Company must calculate the unit cost of materials and the unit conversion cost separately.
C)Kane Company will report the cost of materials with the cost of the ending inventory.
D)Kane Company uses parallel processing.

Question 5

Equivalent production expresses all activity of the period in terms of

A)direct labour hours.
B)partially completed units.
C)fully completed units.
D)units of input.

Question 6

Conversion costs do NOT include

A)direct materials.
B)direct labour.
C)factory overhead.
D)all of these costs

Question 7

Simplicity is the main advantage of which of the following process costing methods?

A)weighted average
B)LIFO
C)FIFO
D)specific identification

Question 8

If costs of manufacturing inputs fluctuate from period to period, which of the following methods is more useful for cost control?

A)FIFO
B)LIFO
C)weighted average
D)equivalent units

Question 9

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

A)Only the FIFO method would result in a decrease in the unit cost for July.
B)Only the weighted average method would result in a decrease in the unit cost for July.
C)Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the FIFO method would result in a lower unit cost for units in July than the weighted average method.
D)Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the weighted average method would result in a lower unit cost for units in July than the FIFO method.

Question 10

The two methods used to determine equivalent units of production are

A)weighted average and FIFO.
B)weighted average and LIFO.
C)FIFO and LIFO.
D)FIFO and specific identification.

Question 11

The Packing Department receives goods produced in previous departments. The costs transferred into the Packing Department are treated as

A)conversion cost incurred uniformly throughout the process.
B)materials cost added at the end of the process.
C)materials cost added at the beginning of the process.
D)either materials cost or conversion cost, depending on whether the firm uses FIFO or weighted average.

Question 12

Beginning inventory for the month contained 2,000 units that were 45 per cent complete with respect to materials. During the month, 18,000 units were completed and transferred out. Ending inventory contained 2,500 units, 20 per cent complete with respect to materials. The weighted average equivalent units of production for materials for the month would be

A)18,000.
B)19,600.
C)19,400.
D)18,500.

Question 13

Beginning inventory for the month contained 2,000 units that were 70 per cent complete with respect to materials. During the month, 60,000 units were completed and transferred out. Ending inventory contained 3,000 units, 20 per cent complete with respect to materials. The weighted average equivalent units of production for materials for the month would be

A)62,400
B)63,000
C)60,600
D)60,000

Question 14

Process costing is complicated by

A)the presence of significant beginning and ending inventories.
B)the treatment of beginning inventory cost.
C)nonuniform application of manufacturing costs.
D)all of the above.

Question 15

The sum of direct labour and factory overhead is referred to as

A)period costs.
B)conversion costs.
C)prime costs.
D)direct product costs.

Question 16

Dedo Company purchased £4,000 of raw materials and used £3,750. The entry to record the requisition of direct materials for the Mixing Department would be A)
$\begin{array}{llr} \text {Raw Materials } &3,750\\ \text { Work in Progress--Mixing Department } &&3,750\\\end{array}$


B)
$\begin{array}{llr} \text { Materials Expense} &4,000\\ \text { Raw Materials } &&4,000\\\end{array}$

C)
$\begin{array}{llr} \text { Work in Progress--Mixing Department } &3,750\\ \text {Raw Materials } &&3,750\\\end{array}$

D)
$\begin{array}{llr} \text { Work in Progress--Mixing Department } &4,000\\ \text { Raw Materials } &&4,000\\\end{array}$

Question 17

Figure 5-2 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, September } 1 \text { ( } 40 \% \text { complete }) & 5,000 \\\text { Started in September } & 20,000 \\\text { Work in progress, September } 30(60 \% \text { complete }) & 8,000\end{array}$ Materials are added at the beginning of the process.

-Refer to Figure 5-2. Equivalent units of production for materials using the weighted average method would be

A)29,800.
B)28,000.
C)33,000.
D)25,000.

Question 18

Equivalent units of production are

A)complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.
B)the average number of units produced in a given period.
C)continuously measured in a total quality environment.
D)computed in both job-order and process cost systems.

Question 19

The cost per equivalent unit using the weighted average method is calculated as

A)Total costs to account for/Equivalent units.
B)Costs added during the period/Equivalent units.
C)Total costs to account for/Number of partially completed units.
D)Costs added during the period/Number of partially completed units.

Question 20

If the cost of materials increased from January to February and there is beginning inventory for each month, which of the following statements would be true? (Assume all other factors are held constant.)

A)Only the weighted average method would result in an increase in the unit cost for February.
B)Only the FIFO method would result in an increase in the unit cost for February.
C)Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the weighted average method would result in a greater unit cost for units in February than the FIFO method.
D)Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the FIFO method would result in a greater unit cost for units in February than the weighted average method.

Question 21

Figure 5-6
Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for April follows: Work in progress, April 1:
$\begin{array}{lr}\text { Units }(35 \% \text { complete) } & 5,000 \\\text { Direct materials } & £ 24,000 \\\text { Direct labour } & £ 30,000 \\\text { Overhead } & £ 10,000\end{array}$ During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: $\begin{array}{lr}\text { Direct materials } & £ 90,000 \\\text { Direct labour } & 120,000 \\\text { Overhead } & 30,000\end{array}$ Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30.

-Refer to Figure 5-6. Kramer's total costs to account for would be

A)£304,000.
B)£264,000.
C)£240,000.
D)£176,000.

Question 22

Figure 5-2 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, September } 1 \text { ( } 40 \% \text { complete }) & 5,000 \\\text { Started in September } & 20,000 \\\text { Work in progress, September } 30(60 \% \text { complete }) & 8,000\end{array}$ Materials are added at the beginning of the process.

-Refer to Figure 5-2. Equivalent units of production for conversion costs using the weighted average method would be

A)25,000.
B)27,800.
C)26,800.
D)21,800.

Question 23

Figure 5-3 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, May } 1 \text { (10\% complete) } & 2,000 \\\text { Started in May } & 17,000 \\\text { Work in progress, May } 31 \text { (20\% complete) } & 3,000\end{array}$ Materials and conversion are incurred uniformly throughout the progress.

-Refer to Figure 5-3. The total units of production to be accounted for would be

A)14,000.
B)17,000.
C)19,000.
D)22,000.

Question 24

Figure 5-6
Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for April follows: Work in progress, April 1:
$\begin{array}{lr}\text { Units }(35 \% \text { complete) } & 5,000 \\\text { Direct materials } & £ 24,000 \\\text { Direct labour } & £ 30,000 \\\text { Overhead } & £ 10,000\end{array}$ During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: $\begin{array}{lr}\text { Direct materials } & £ 90,000 \\\text { Direct labour } & 120,000 \\\text { Overhead } & 30,000\end{array}$ Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30.

-Refer to Figure 5-6. Kramer's total cost per equivalent unit of production would be

A)£12.16.
B)£11.26.
C)£9.76.
D)£6.52.

Question 25

Figure 5-6
Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for April follows: Work in progress, April 1:
$\begin{array}{lr}\text { Units }(35 \% \text { complete) } & 5,000 \\\text { Direct materials } & £ 24,000 \\\text { Direct labour } & £ 30,000 \\\text { Overhead } & £ 10,000\end{array}$ During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: $\begin{array}{lr}\text { Direct materials } & £ 90,000 \\\text { Direct labour } & 120,000 \\\text { Overhead } & 30,000\end{array}$ Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30.

-Refer to Figure 5-6. Kramer's cost of goods transferred to the molding department during April would be

A)£210,000.
B)£261,050.
C)£281,500.
D)£294,000.

Question 26

The following information is provided: $\begin{array}{lr}& \text { Units } \\\text { Work in progress, June } 1 \text { (20\% complete) } & 4,000 \\\text { Started in June } & 32,000 \\\text { Work in process, June } 30 \text { (30\% complete) } & 12,000\end{array}$ Materials are added at the beginning of the process. Equivalent units of production for conversion costs using the weighted average method would be

A)35,600.
B)34,800.
C)36,000.
D)27,600.

Question 27

Figure 5-3 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, May } 1 \text { (10\% complete) } & 2,000 \\\text { Started in May } & 17,000 \\\text { Work in progress, May } 31 \text { (20\% complete) } & 3,000\end{array}$ Materials and conversion are incurred uniformly throughout the progress.

-Refer to Figure 5-3. Equivalent units of production for conversion using the weighted average method would be

A)14,800.
B)16,400.
C)17,800.
D)16,600.

Question 28

The following amounts were selected from the production report of Chandon Corporation: $\begin{array}{lr}\text { Actual units in production } & 42,000 \\\text { Equivalent units (materials) } & 42,000 \\\text { Equivalent units (conversion) } & 39,000 \\\text { Cost per equivalent unit (materials) } & £ 1.10 \\\text { Cost per equivalent unit (conversion) } & £ 0.90\end{array}$ Chandon uses the weighted average method in preparing its production reports. Chandon's total production cost to be accounted for must have been

A) $£ 81,300$ .
B) $£ 84,000$ .
C) $£ 89,100$ .
D) $£ 72,900$ .

Question 29

Figure 5-7
The Corn Ltd. produces a product that passes through two processes. During April, the first department transferred 40,000 units to the second department. The cost of the units transferred was £60,000. Materials are added uniformly in the second process. The following information was provided about the second department's operations during April: Units, beginning work in progress $\quad$$\quad$ 8,000
Units, ending work in progress $\quad$$\quad$$\quad$ 11,000

-Refer to Figure 5-7. Units completed in the second department during April for Corn Ltd. would be

A)48,000.
B)37,000.
C)19,000.
D)55,000.

Question 30

Figure 5-9
The following information is available for Department Z for the month of July: $\begin{array}{lcc}&\text { Units }&\text {Cost }\\\text { Work in progress, July } 1 \text { (70\% complete) } & 5,000 \\ \text { Direct materials } &&£ 6,000 \\ \text { Direct labour } &&3,000 \\ \text { Manufacturing overhead } &&4,000 \\ \text { Total work in progress, July } 1 &&£ 13,000 \\\\ \text { Started in production during July}&20,000\\\\ \text { Costs added:}\\ \text { Direct materials}&&£ 18,000\\ \text { Direct labour}&&8,000\\ \text { Manufacturing overhead}&&10,000\\ \text { Total costs added during July}&&£ 36,000\\\\ \text { Work in progress, July 31 , ( \( 80 \% \) complete)}&2,000\\\end{array}$ Materials are added at the beginning of the process. (Round unit costs to two decimal places.)

-Refer to Figure 5-9. Department Z's cost per equivalent unit of production for conversion costs using the FIFO method would be

A)£1.18.
B)£1.02.
C)£0.85.
D)£0.73.

Question 31

Figure 5-4
The following information is available for Department X for August: $\begin{array}{lr}\text { Work in progress, August } 1\\\text { Materials } & £ 8,000 \\\text { Conversion costs } & £ 15,000\\\\\text { Costs added during August:}\\\text { Materials}& £ 28,000 \\\text { Conversion costs}&£ 25,000 \\\\\text { Equivalent units of production (weighted average):}\\\text { Materials}&4,000\\\text { Conversion}&5,000\\\end{array}$

-Refer to Figure 5-4. Department X's cost per equivalent unit for materials using the weighted average method would be

A)£2.00.
B)£7.00.
C)£8.00.
D)£9.00.

Question 32

Burgundy Manufacturing uses a process cost system and computes cost using the weighted average method. During the current period, the beginning work-in-progress inventory cost was £13,525. Manufacturing cost added was £57,000. If Burgundy's ending work-in-progress inventory was valued at £15,100, then cost of goods transferred must have been

A)£70,525.
B)£55,425.
C)£84,625.
D)£58,575.

Question 33

Figure 5-5
The following information is available for Department A for the month of July: $\begin{array}{lr}&\text { Units}&\text { Cost}\\\text { Work in progress, July } 1 \text { ( } 60 \% \text { complete) } & 5,000 \\\text { Direct materials } & &£ 12,000 \\\text { Conversion } && \underline{18,000} \\\text { Total work in progress, July 1 } && £ 30,000\\\\\text { Started in production during July}&20,000\\\\\text { Costs added:}\\\text { Direct materials}&&£ 36,000\\\text { Conversion}&&52,000\\\text { Total costs added during July}&&£88,000\end{array}$ Work in progress, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)

-Refer to Figure 5-5. Department A's cost per equivalent unit of production for conversion using the weighted average method would be

A)£2.60.
B)£2.94.
C)£3.04.
D)£3.50.

Question 34

Figure 5-3 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, May } 1 \text { (10\% complete) } & 2,000 \\\text { Started in May } & 17,000 \\\text { Work in progress, May } 31 \text { (20\% complete) } & 3,000\end{array}$ Materials and conversion are incurred uniformly throughout the progress.

-Refer to Figure 5-3. Units started and completed using the weighted average method would be

A)18,000.
B)16,000.
C)12,000.
D)14,000.

Question 35

Figure 5-7
The Corn Ltd. produces a product that passes through two processes. During April, the first department transferred 40,000 units to the second department. The cost of the units transferred was £60,000. Materials are added uniformly in the second process. The following information was provided about the second department's operations during April: Units, beginning work in progress $\quad$$\quad$ 8,000
Units, ending work in progress $\quad$$\quad$$\quad$ 11,000

-Refer to Figure 5-7. Units started and completed in Corn Corporation's second department during June would be

A)48,000.
B)37,000.
C)29,000.
D)55,000.

Question 36

Figure 5-2 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, September } 1 \text { ( } 40 \% \text { complete }) & 5,000 \\\text { Started in September } & 20,000 \\\text { Work in progress, September } 30(60 \% \text { complete }) & 8,000\end{array}$ Materials are added at the beginning of the process.

-Nortfont Industries had 25,000 units in production during the period just ended. Equivalent units of production were calculated at 24,000; 22,000 units were completed and transferred to finished goods. Cost associated with the beginning inventory was £125,000. Manufacturing costs totaling £850,000 were added during the period. Nortfont uses the weighted average cost method. Nortfont's cost per unit was

A)£34.00.
B)£39.00.
C)£40.63.
D)£38.64.

Question 37

Figure 5-3 $\begin{array}{lr} & \text { Units } \\\text { Work in progress, May } 1 \text { (10\% complete) } & 2,000 \\\text { Started in May } & 17,000 \\\text { Work in progress, May } 31 \text { (20\% complete) } & 3,000\end{array}$ Materials and conversion are incurred uniformly throughout the progress.

-Refer to Figure 5-3. Equivalent units of production for materials using the weighted average method would be

A)16,600.
B)14,800.
C)17,800.
D)18,860.

Question 38

Figure 5-7
The Corn Ltd. produces a product that passes through two processes. During April, the first department transferred 40,000 units to the second department. The cost of the units transferred was £60,000. Materials are added uniformly in the second process. The following information was provided about the second department's operations during April: Units, beginning work in progress $\quad$$\quad$ 8,000
Units, ending work in progress $\quad$$\quad$$\quad$ 11,000

-Refer to Figure 5-7. Units started in the second department during April for Corn Ltd. would be

A)40,000.
B)29,000.
C)32,000.
D)48,000.

Question 39

Figure 5-6
Kramer, Inc., manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for April follows: Work in progress, April 1:
$\begin{array}{lr}\text { Units }(35 \% \text { complete) } & 5,000 \\\text { Direct materials } & £ 24,000 \\\text { Direct labour } & £ 30,000 \\\text { Overhead } & £ 10,000\end{array}$ During April, 25,000 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during April: $\begin{array}{lr}\text { Direct materials } & £ 90,000 \\\text { Direct labour } & 120,000 \\\text { Overhead } & 30,000\end{array}$ Two thousand five hundred (2,500) units that were 80 per cent complete remained in mixing at April 30.

-Refer to Figure 5-6. Kramer's equivalent units of production using the weighted average method would be

A)28,750.
B)20,000.
C)27,000.
D)23,000.

Question 40

Figure 5-4
The following information is available for Department X for August: $\begin{array}{lr}\text { Work in progress, August } 1\\\text { Materials } & £ 8,000 \\\text { Conversion costs } & £ 15,000\\\\\text { Costs added during August:}\\\text { Materials}& £ 28,000 \\\text { Conversion costs}&£ 25,000 \\\\\text { Equivalent units of production (weighted average):}\\\text { Materials}&4,000\\\text { Conversion}&5,000\\\end{array}$

-Refer to Figure 5-4. Department X's cost per equivalent unit for conversion using the weighted average method would be

A)£8.00.
B)£5.00.
C)£3.00.
D)£9.00.

Question 41

Star, Inc., manufactures a product that passes through two processes: mixing and packaging. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows: Work in progress, June 1 :
$\begin{array}{ll}\text { Units }(30 \% \text { complete) } & 15,000 \\\text { Direct materials } & £ 4,000 \\\text { Direct labour } & £ 3,000 \\\text { Overhead } & £ 2,376\end{array}$ During June, 100,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June: $\begin{array}{lr}\text { Direct materials } & £ 50,000 \\\text { Direct labour } & 30,000 \\\text { Overhead } & 12,000\end{array}$ At June 30, 8,000 units that were 70 per cent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
a.Determine equivalent units of production for June.
b.Determine June's total costs to account for.
c.Determine total cost per equivalent unit of production.
d.Determine the cost of goods transferred to the packaging department.
e.Determine the cost of June's ending work in progress for the mixing department.

Question 42

Urban Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2011 are as follows: Production data:
$\begin{array}{ll}\text { In process, beginning of month ( } 20 \% \text { converted) } & 1,000 \text { units } \\\text { Started during February } & 5,000 \text { units } \\\text { Completed and trans ferred to finished goods } & 4,500 \text { units } \\\text { In process, end of month ( } 60 \% \text { converted) } & 1,500 \text { units }\end{array}$
Manufacturing costs:
$\begin{array}{lr}\text { Work in progress, beginning } & £ 14,730 \\\text { Materials } & £ 45,000 \\\text { Direct labour cost } & £ 102,960 \\\text { Factory overhead cost } & £ 51,480\end{array}$

Question 43

Figure 5-11
Gill Ltd. adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for March 2004 are as follows:
$\begin{array}{lrrr}&&\text { Costs }\\&\text { Units } & \text { Materials } & \text { Conversion } \\\text { Work in progress, March 1 } & 25,000 & £ 68,750 & £ 167,650 \\\text { Started during March } & 100,000 & 300,000 & 903,350 \\\text { Work in nrogress March } 31 & 10000 & &\end{array}$ Beginning inventory was 70 per cent complete. Ending inventory was 40 per cent complete.

-Refer to Figure 5-11. How many equivalent units for materials would there be for Gill Ltd. in March using the FIFO method?

A)100,000 units
B)110,000 units
C)125,000 units
D)119,000 units

Question 44

Royal, Inc., manufactures products that pass through two or more processes. The company uses the weighted average method to compute unit costs. During April, equivalent units were computed as follows: $\begin{array}{lcc}&\text { Materials }&\text { Conversion Cost }\\\text { Units completed } & 90,000 & 90,000 \\\text { Units in EWIP } \times \text { Fraction complete: } & & \\\text { Materials }(4,000 \times 100 \%) & 4,000 & \\\text { Conversion }(4,000 \times 30 \%) && \underline{1,200} \\\text { Equivalent units of output } & \overline{94,000} & 91,200\end{array}$
The unit cost was computed as follows: $\begin{array}{ll}\text { Materials } & £ 5.00 \\\text { Conver sion cost } & \\\text { Total cost per unit } & £ 8.00 \\\end{array}$
a.Determine the cost of the goods transferred out.
b.Determine the cost of ending work in progress.

Question 45

Figure 5-10
The following information is available: $\begin{array}{lr}\text { Units in process at the beginning of the month } & 2,000 \\\text { Units in process at the end of the month } & 4,000 \\\text { Units started during the month } & 30,000\end{array}$ Materials are added at the beginning of the process.

-Refer to Figure 5-10. Beginning and ending units were 60 per cent complete as to conversion costs. What is the number of units started and completed?

A)30,000 units
B)26,000 units
C)36,000 units
D)28,000 units

Question 46

Figure 5-10
The following information is available: $\begin{array}{lr}\text { Units in process at the beginning of the month } & 2,000 \\\text { Units in process at the end of the month } & 4,000 \\\text { Units started during the month } & 30,000\end{array}$ Materials are added at the beginning of the process.

-Refer to Figure 5-10. Beginning and ending units were 60 per cent converted. How many equivalent units for materials would there be using the FIFO method?

A)36,000 units
B)34,000 units
C)30,000 units
D)29,200 units

Question 47

Figure 5-11
Gill Ltd. adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for March 2004 are as follows:
$\begin{array}{lrrr}&&\text { Costs }\\&\text { Units } & \text { Materials } & \text { Conversion } \\\text { Work in progress, March 1 } & 25,000 & £ 68,750 & £ 167,650 \\\text { Started during March } & 100,000 & 300,000 & 903,350 \\\text { Work in nrogress March } 31 & 10000 & &\end{array}$ Beginning inventory was 70 per cent complete. Ending inventory was 40 per cent complete.

-Refer to Figure 5-11. How many equivalent units for conversion costs would there be for Gill Ltd. in March using the FIFO method?

A)100,000 units
B)111,500 units
C)125,000 units
D)101,500 units

Question 48

Barr, Inc., manufactures a product that passes through two processes: mixing and packaging. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows: Work in progress, June 1
$\begin{array}{lr}\text { Units ( } 60 \% \text { complete) } & 5,000 \\\text { Direct materials } & £ 20,000 \\\text { Direct labour } & £ 24,000 \\\text { Overhead } & £ 4,000\end{array}$ During June, 80,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June: $\begin{array}{lr}\text { Direct materials } & £ 180,000 \\\text { Direct labour } & 200,000 \\\text { Overhead } & 59,200\end{array}$ At June 30, 12,000 units that were 10 per cent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
a.Determine equivalent units of production for June.
b.Determine June's total costs to account for.
c.Determine total cost per equivalent unit of production.
d.Determine the cost of goods transferred to the packaging department.
e.Determine the cost of June's ending work in progress for the mixing department.

Question 49

Beginning inventory consisted of 1,000 units with costs of £21,000. All materials and 60 per cent of labour and overhead were added in the prior period. In addition, another 8,000 units were started and completed. Unit costs are materials, £6.00; labour, £15.00; overhead, £9.00. What is the total cost of goods transferred out using FIFO?

A)£240,000
B)£270,000
C)£262,200
D)£270,600

Question 50

Figure 5-9
The following information is available for Department Z for the month of July: $\begin{array}{lcc}&\text { Units }&\text {Cost }\\\text { Work in progress, July } 1 \text { (70\% complete) } & 5,000 \\ \text { Direct materials } &&£ 6,000 \\ \text { Direct labour } &&3,000 \\ \text { Manufacturing overhead } &&4,000 \\ \text { Total work in progress, July } 1 &&£ 13,000 \\\\ \text { Started in production during July}&20,000\\\\ \text { Costs added:}\\ \text { Direct materials}&&£ 18,000\\ \text { Direct labour}&&8,000\\ \text { Manufacturing overhead}&&10,000\\ \text { Total costs added during July}&&£ 36,000\\\\ \text { Work in progress, July 31 , ( \( 80 \% \) complete)}&2,000\\\end{array}$ Materials are added at the beginning of the process. (Round unit costs to two decimal places.)

-Refer to Figure 5-9. Department Z's cost of goods transferred out using the FIFO method would be

A)£45,775.
B)£45,540.
C)£44,500.
D)£40,250.

Question 51

Lee Company began making lipstick in October 2011 using a single-step process. Lee incurred £42,000 for materials and £48,640 for conversion during the month. There were 21,000 cases of lipstick started in October and 3,000 cases unfinished (40 per cent complete) at the end of the period. All materials were added at the beginning of the production process. What is the unit cost for materials for Lee using the FIFO method?

A)£4.53
B)£2.00
C)£2.03
D)none of these

Question 52

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

A)process costing
B)contract costing
C)variable costing
D)job-order costing

Question 53

Davidson Company manufactures a product that passes through two processes. The following information is available for the first department for October.
All materials are added at the beginning of the process.
Beginning work in progress consisted of 20,000 units that were 80 per cent complete with respect to conversion.
Ending work in progress consisted of 15,000 units that were 40 per cent complete with respect to conversion.
During the month, 90,000 units were started in process.
a.Prepare a physical flow schedule.
b.Compute equivalent units using the FIFO method.

Question 54

If beginning inventory contained 2,000 units of product that were judged to be 40 per cent complete as to labour, the equivalent units of production for labour during the current period under the FIFO method for these 2,000 units are

A)2,000 units.
B)800 units.
C)1,200 units.
D)400 units.

Question 55

The following information pertains to Jones Company:
$\begin{array}{ll}&\text { Units }\\\text { Work-in-progress inventory, March } 1 \text { (30\% complete) } & 20,000 \\\text { Units transferred in } & 50,000 \\\text { Work-in-progress inventory, March } 31(60 \% \text { complete }) & 16,000\end{array}$
Materials are added at the start of the progress.
How many equivalent units for conversion costs would there be using the FIFO method?

A)49,600 units
B)70,000 units
C)50,000 units
D)57,600 units

Question 56

Unit cost of materials for a department using the FIFO method of process costing is found by taking the total cost of materials issued to the department during the year divided by

A)units in process.
B)units started and completed.
C)total units manufactured.
D)equivalent units manufactured.