Question 1

During June, Birch Bay Company's Department B equivalent unit product costs computed under the FIFO method were as follows:  Materials are introduced at the end of the process in Department B. There were 4,000 units (60 % complete as to conversion costs) in work in process at June 30. The total costs assigned to the June 30 work in process inventory should be:
A)$20,000.
B)$24,800.
C)$27,200.
D)$35,200.

Accepted Answer

11eb16ac_e00f_cda8_984d_f9d422598738_TB6154_00 Because materials are introduced at the end of the process, no materials cost would be included in the ending work in process.

Question 2

Plemmon Company adds materials at the beginning of the process in the forming department, which is the first of two stages of its production cycle. Information concerning the materials used in the forming department in April follows:  Using the FIFO method, what is the materials cost of the work in process at April 30 (rounded to nearest dollar)?
A)$7,154
B)$6,200
C)$7,750
D)$6,417

Accepted Answer

11eb16ac_e00f_7f84_984d_5dcd467e5e8b_TB6154_00

Question 3

Information for Tyson Company in May for Department One, the first stage of the production cycle, is as follows:  Material costs are added at the beginning of the process. The ending work in process is 80 percent complete as to conversion costs. How would the total costs accounted for be distributed using the average cost method?

Accepted Answer

The answer of Information for Tyson Company in May for...

Question 4

Budde Chemicals produces two industrial chemical compounds, X15 and Z24, from the same process, which last year, cost $300,000. Budde produced 15,000 gallons of X15, which sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. Using the relative sales method, how much of the joint cost should be allocated to X15?
A)$100,000
B)$200,000
C)$60,000
D)$75,000

Accepted Answer

11eb16ac_e00f_f4b9_984d_259f22fd87c4_TB6154_00

Question 5

Which of the following is not an acceptable method for accounting for by-products in a joint manufacturing process?
A)Costs before the split-off point are allocated to by-products.
B)The estimated sales value of the by-product reduces the cost of the main product.
C)The joint costs allocated to by-products are included in an account called "By-products Inventory."
D)In some instances, the revenue from selling by-products may be treated as "other income" on the income statement.

Accepted Answer

Joint costs are not allocated to by-products. When accounting for by-products, the estimated sales value of the by-product reduces the cost of the main product, and is recorded to an account called "By-products Inventory." Alternatively, if the sales value is not easily estimated, the sales may be recorded as "Other Income."

Question 6

If a company produces two products, A and B, from a joint process, and B requires additional processing after the split-off in order to be salable, how is the joint cost allocated to B determined?
A)The costs of the additional processing are ignored in allocating joint costs.
B)The costs of the additional processing are subtracted from the joint costs allocated to B.
C)The relative sales value used to allocate the joint cost are determined after the costs of further processing are subtracted from the ultimate sales value of B.
D)None of these are correct.

Accepted Answer

The relative sales value used to determine joint costs is determined by subtracting the costs of further processing from the ultimate sales value of B.

Question 7

When two products are produced during a common process, what is the factor that determines whether the products are joint products or one principal product and a by-product?
A)Potential marketability for each product
B)Amount of work expended in the production of each product
C)Management policy
D)Relative total sales value

Accepted Answer

The relative total sales value is the determining factor in deciding whether a product is a joint product or a by-product. Products with relatively little value are by-products.

Question 8

The following information is available for the month of April from the First department of the Armque Corporation:  Materials are added in the beginning of the process in the First department. Using the first-in, first-out method, what are the equivalent units of production for the month of April?

Accepted Answer

The answer of The following information is available for the...

Question 9

Which of the following statements best describes a by-product?
A)A product with a value that can easily and accurately be determined.
B)A product that has a greater value than the main product.
C)A product created along with the main product whose sales value does not cover the cost of its production.
D)A product that usually produces a small amount of revenue when compared to the main product revenue.

Accepted Answer

A by-product is a product that usually produces a small amount of revenue when compared to the main product revenue.

Question 10

Budde Chemicals produces two industrial chemical compounds, X15 and Z24, from the same process, which last year, cost $300,000. Budde produced 15,000 gallons of X15, which sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. Using the physical units method, how much of the joint cost should be allocated to X15?
A)$100,000
B)$225,000
C)$60,000
D)$75,000

Accepted Answer

11eb16ac_e010_42db_984d_a3371b0da6e7_TB6154_00

Question 11

Highlander Corporation is a manufacturer that uses the average cost method to account for costs of production. Highlander manufactures a product that is produced in three separate departments: molding, assembling, and finishing. The following information was obtained for the assembling department for the month of June:
Work in process, June 1: 4,000 units composed of the following:  The following activity occurred during the month of June:
(1)
20,000 units were transferred in from the molding department at a cost of $300,000.
(2)
Costs were added by the assembling department as follows:  (3) Materials are added at the end of the process.
(4)
18,000 units were completed and transferred to the finishing department. At June 30, 6,000 units were still in process. The degree of completion of work in process at June 30 follows:  Prepare in good form a cost of production report for the assembling department for the month of June. Show supporting computations in good form. The report should include: 
a.Equivalent units of production.
b.Total manufacturing costs.
c.Cost per equivalent unit.
d.Dollar amount of ending work in process.
e.
Dollar amount of inventory cost transferred out.

Accepted Answer

The answer of Highlander Corporation is a manufacturer that uses...

Question 12

Regina Manufacturing uses the FIFO method of process costing. The production report for the Curing Department, where the materials are added at the beginning of the period, for September was as follows:  The number of units started and completed during the period was:
A)12,000
B)9,000
C)15,000
D)6,000

Accepted Answer

11eb16ac_e00f_0a4b_984d_ed0934d7aa5a_TB6154_00

Question 13

Each of the following is a method by which to allocate joint costs except:
A)Chemical or engineering analysis.
B)Relative sales value.
C)Relative weight, volume, or linear measure.
D)Relative marketing costs.

Accepted Answer

Joint costs would not be allocated according to relative marketing costs because marketing costs are not necessarily incurred directly in proportion to production costs.

Question 14

Joint costs are commonly allocated based upon relative:
A)Sales value.
B)Marketing costs.
C)Conversion costs.
D)Prime costs.

Accepted Answer

Joint costs are commonly allocated based upon relative sales value. Profitability, conversion costs, and prime costs do not necessarily have a direct relationship to production costs.

Question 15

Information concerning Department A of Ali Company for the month of June is as follows:  All materials are added at the beginning of the process. Using the first-in, first-out method, the cost (rounded to two places) per equivalent unit for materials for June is:
A)$0.63.
B)$0.90.
C)$0.77.
D)$0.78.

Accepted Answer

11eb16ac_e00f_5872_984d_0d85f03dd62f_TB6154_00

Question 16

Regina Manufacturing uses the FIFO method of process costing. The production report for the Curing Department, where the materials are added at the beginning of the period, for September was as follows:  The number of equivalent units for conversion costs during the period was:
A)13,500
B)16,500
C)12,300
D)14,700

Accepted Answer

11eb16ac_e00f_315d_984d_79b724e4003f_TB6154_00

Question 17

The following information is available for the month of April from the First department of the Armque Corporation:  Materials are added at the end of the process in the First department. Using the first-in, first-out method, what are the equivalent units of production for the month of April? Materials
Conversion
A)250,000 259,000
B)280,000 259,000
C)340,000 271,000
D)280,000 271,000

Accepted Answer

Equivalent production:
 11eb16ac_e00f_a696_984d_398db36f1454_TB6154_00

Question 18

Which of the following is most likely to be accounted for as a by-product?
A)Heating oil resulting from processing crude oil at a refinery.
B)Cream resulting from processing raw milk at a dairy.
C)Sawdust resulting from processing lumber at a lumber mill.
D)Ground beef resulting from processing beef at a meat packer.

Accepted Answer

Of the choices above, it is most likely that sawdust would have very little sales value compared to the lumber being processed.

Question 19

If two or more products share a common process before they are separated, the joint costs should be allocated in a manner that:
A)Assigns a proportionate amount of the total cost to each product by means of a quantitative basis.
B)Maximizes total earnings.
C)Minimizes variations in a unit of production cost.
D)Does not introduce an element of estimation into the process of accumulating costs for each product.

Accepted Answer

An allocation method is usually selected that will assign a portion of a given total cost to each of the products that are sharing a physical part of the total item. A quantitative method is chosen that will least affect the gross profit percentage differences among these products.

Question 20

Budde Chemicals produces two industrial chemical compounds, X15 and Z24, from the same process, which last year, cost $300,000. Budde produced 15,000 gallons of X15, which sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. After the split-off point, X15 required additional processing costing $200,000 to make it salable. Using the adjusted sales method, how much of the joint cost should be allocated to X15?
A)$100,000
B)$240,000
C)$60,000
D)$75,000

Accepted Answer

11eb16ac_e010_1bca_984d_091e463e52f5_TB6154_00

Quiz 6: Process Cost Accounting Additional Procedures

Which of the following is not an acceptable method for accounting for by-products in a joint manufacturing process?

If a company produces two products, A and B, from a joint process, and B requires additional processing after the split-off in order to be salable, how is the joint cost allocated to B determined?

When two products are produced during a common process, what is the factor that determines whether the products are joint products or one principal product and a by-product?

The following information is available for the month of April from the First department of the Armque Corporation: Materials are added in the beginning of the process in the First department. Using the first-in, first-out method, what are the equivalent units of production for the month of April?

Which of the following statements best describes a by-product?

Regina Manufacturing uses the FIFO method of process costing. The production report for the Curing Department, where the materials are added at the beginning of the period, for September was as follows: The number of units started and completed during the period was:

Each of the following is a method by which to allocate joint costs except:

Joint costs are commonly allocated based upon relative:

Information concerning Department A of Ali Company for the month of June is as follows: All materials are added at the beginning of the process. Using the first-in, first-out method, the cost (rounded to two places) per equivalent unit for materials for June is:

Regina Manufacturing uses the FIFO method of process costing. The production report for the Curing Department, where the materials are added at the beginning of the period, for September was as follows: The number of equivalent units for conversion costs during the period was:

Which of the following is most likely to be accounted for as a by-product?

If two or more products share a common process before they are separated, the joint costs should be allocated in a manner that: