Question 1

Mannassass Company manufactures chairs. The following information was given for the company: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 20,000 \
\text { units completed } & ? \
\text { units, ending work in process } & 5,000 \
\text { cost of direct materials } & \$ 440,000 \
\text { cost of conversion } & \$ 64,000
\end{array}$$ Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete. What are the equivalent units for materials and conversion respectively?
A)20,000; 20,000
B)20,000; 16,000
C)15,000; 15,000
D)15,000; 14,000
E)none of the above

Accepted Answer

Equivalent units for materials = 20,000 unitsEquivalent units for conversion = 16,000 units

Question 2

Which of the following is true of the first-in, first-out costing method?
A)It calculates the equivalent units of output at the beginning of a reporting period.
B)It includes only prior-period work in determining the completed units of output.
C)It uses only current output to calculate the current-period unit cost.
D)It treats the work in beginning work-in-process as belonging to the current period.

Accepted Answer

The first-in, first-out (FIFO) costing method assumes that the oldest inventory items are sold first, hence it uses only the costs of the current period's production to calculate the unit cost of the items sold during that period. This method does not mix costs from previous periods with the current period when calculating the cost of goods sold.

Question 3

The unit-costing method that excludes prior-period work and costs in computing current-period unit work and costs is called:
A)Transferred-in cost method
B)FIFO costing method
C)Weighted average method
D)Equivalent units method

Accepted Answer

The FIFO (First-In, First-Out) costing method excludes prior-period work and costs when computing current-period unit work and costs, focusing only on the costs and work added in the current period.

Question 4

Thunder Roads Enterprises makes the following information 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.
Beginning and ending units were 60 percent 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

Accepted Answer

The answer of Thunder Roads Enterprises makes the following information...

Question 5

Mannassass Company manufactures chairs. The following information was given for the company: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 20,000 \
\text { units completed } & ? \
\text { units, ending work in process } & 5,000 \
\text { cost of direct materials } & \$ 440,000 \
\text { cost of conversion } & \$ 64,000
\end{array}$$
Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete.
What are the units started and completed?
A)20,000
B)10,000
C)15,000
D)40,000
E)none of the above

Accepted Answer

The units started and completed are calculated by subtracting the ending work in process from the units started: 20,000 - 5,000 = 15,000.

Question 6

Mannassass Company manufactures chairs. The following information was given for the company: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 20,000 \
\text { units completed } & ? \
\text { units, ending work in process } & 5,000 \
\text { cost of direct materials } & \$ 440,000 \
\text { cost of conversion } & \$ 64,000
\end{array}$$ Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete. What are the costs per unit for materials and conversion respectively?
A)$22; $4
B)$29.33; $4.27
C)$11; $1.60
D)$88; $64
E)none of the above

Accepted Answer

The answer of Mannassass Company manufactures chairs. The following information...

Question 7

Layla Company began making mascara in November 2018 using a single-step process. Layla incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of mascara started in November and 3,000 cases unfinished (40 percent 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 Layla using the FIFO method?
A)$2.00
B)$2.03
C)$4.53
D)none of the above

Accepted Answer

The unit cost for materials using FIFO is calculated by dividing the total materials cost by the number of units started and completed. Since all materials are added at the beginning, the cost is $42,000 / 21,000 = $2.00 per unit.

Question 8

If beginning inventory contained 3,000 units of product that were judged to be 60 percent complete as to labor, the equivalent units of production for labor during the current period under the FIFO method for these 3,000 units are
A)3,000 units.
B)1,200 units.
C)1,800 units.
D)500 units.

Accepted Answer

The answer of If beginning inventory contained 3,000 units of...

Question 9

Edelstein Company had the following data for 2018: $\begin{array}{lr}
\text { Units in process at the beginning of the month } & 4,000 \
\text { Units in process at the end of the month } & 10,000 \
\text { Units started during the month } & 40,000
\end{array}$ Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
How many equivalent units for materials would there be using the FIFO method?
A)44,000 units
B)30,000 units
C)40,000 units
D)39,400 units

Accepted Answer

Under the FIFO method, equivalent units for materials are calculated based on the units started and completed during the period. Since materials are added at the beginning of the process, all units started during the month (40,000 units) would have received materials, making the equivalent units for materials 40,000.

Question 10

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 of output.

Accepted Answer

The FIFO method of process costing assumes that the first units that were added to the production process are the first ones to be completed. Therefore, to properly allocate the cost of materials, we need to calculate the equivalent units of output for the department. This means we need to consider all units that were partially completed during the year, as well as the units that were started and completed. By dividing the total cost of materials issued to the department during the year by the equivalent units of output, we get the unit cost of materials.

Question 11

Mannassass Company manufactures chairs. The following information was given for the company: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 20,000 \
\text { units completed } & ? \
\text { units, ending work in process } & 5,000 \
\text { cost of direct materials } & \$ 440,000 \
\text { cost of conversion } & \$ 64,000
\end{array}$$ Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete. What cost is assigned to ending work in process?
A)$110,000
B)$126,000
C)$130,000
D)$114,000
E)none of the above

Accepted Answer

The cost assigned to ending work in process is $114,000. This is calculated as follows:Cost of ending work in process = Cost of direct materials in ending work in process + Cost of conversion in ending work in processCost of direct materials in ending work in process = $440,000 x 100% = $440,000Cost of conversion in ending work in process = $64,000 x 20% = $12,800Cost of ending work in process = $440,000 + $12,800 = $114,000

Question 12

Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2018 are as follows: $$\begin{array} { | l | r | r | r | } 
\hline & &  { \text { Costs } } \
\hline & \text { Units } & \text { Materials } & { \text { Conversion } } \
\hline \text { Work in process, May 1 } & 25,000 & \$ 68,750 & \$ 167,650 \
\hline \text { Started during May } & 100,000 & 300,000 & 903,350 \
\hline \text { Work in process, May 31 } & 10,000 & & \
\hline
\end{array}$$ Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete. How many equivalent units for conversion costs would there be for Anzalone Corporation in May using the FIFO method?
A)100,000 units
B)111,500 units
C)125,000 units
D)101,500 units

Accepted Answer

To calculate the equivalent units for conversion costs using the FIFO method, we first determine the units completed and transferred out, then calculate the equivalent units for the work done on the beginning inventory and the work done in the current period.1. Units completed and transferred out = (Beginning inventory units + Units started during May) - Ending inventory units = (25,000 + 100,000) - 10,000 = 115,000 units.2. Equivalent units for beginning inventory: Since the beginning inventory was 70% complete, it means that 30% of the conversion work was remaining. Therefore, for the 25,000 units in beginning inventory, the equivalent units for conversion costs to complete them = 25,000 units * 30% = 7,500 units.3. Equivalent units for units started and completed in May: Since all units started during May either were completed or are in ending inventory, and since we've already accounted for the beginning inventory, the equivalent units for the units started and completed in May = Units completed and transferred out - Beginning inventory = 115,000 units - 25,000 units = 90,000 units.4. Equivalent units for ending inventory: The ending inventory was 40% complete, so the equivalent units for conversion costs for the ending inventory = 10,000 units * 40% = 4,000 units.5. Total equivalent units for conversion costs = Equivalent units for beginning inventory + Equivalent units for units started and completed in May + Equivalent units for ending inventory = 7,500 units + 90,000 units + 4,000 units = 101,500 units.

Question 13

Cadmium Corporation manufactures leather bags. The following information pertains to the month of August: $\begin{array}{lr}&\text { Units }\
\text { Work in process, August } 1 \text { (40\% complete) } &900\
\text { Started in August }&4,000
\end{array}$
Materials are added at the beginning of the process.
If 3,700 units were completed during the month, ending work in process on August 31 is:
A)1,200 units.
B)2,000 units.
C)2,700 units.
D)1,000 units.

Accepted Answer

The total units to account for are the beginning work in process (900 units) plus the units started in August (4,000 units), totaling 4,900 units. If 3,700 units were completed, the ending work in process is 4,900 - 3,700 = 1,200 units.

Question 14

Maynard Inc. manufactures desks. The following data was given for production in February: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 200 \
\text { units completed } & ? \
\text { units, ending work in process ( } 40 \% \text { complete) } & 50
\end{array}$$ If a total of $11,050 in production costs were incurred, how much cost is assigned to the units completed?
A)$11,050
B)$3.250
C)$8,287.50
D)$9,750
E)none of the above

Accepted Answer

The answer of Maynard Inc. manufactures desks. The following data...

Question 15

Thunder Roads Enterprises makes the following information 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.
Beginning and ending units were 60 percent complete as to conversion costs. What is the number of units started and completed?
A)36,000 units
B)30,000 units
C)28,000 units
D)26,000 units

Accepted Answer

The answer of Thunder Roads Enterprises makes the following information...

Question 16

Julius Corporation's mixing department began January 2018 with 10,000 gallons of product (40 percent completed) in process. During January, Julius started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed). If materials were added at the beginning of the process, how many equivalent units of production for conversion costs would there be for Julius using the FIFO costing method?
A)101,500 units
B)110,000 units
C)105,500 units
D)116,500 units

Accepted Answer

Equivalent units of production for conversion costs = Units started in beginning inventory + Units started and completed during the period + Units in ending inventory x % completed= 10,000 gallons x 40% + 100,000 gallons - 15,000 gallons x 70%= 4,000 gallons + 100,000 gallons - 10,500 gallons= 101,500 gallons

Question 17

Edelstein Company had the following data for 2018: $\begin{array}{lr}
\text { Units in process at the beginning of the month } & 4,000 \
\text { Units in process at the end of the month } & 10,000 \
\text { Units started during the month } & 40,000
\end{array}$ Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
What is the number of units completed and transferred out during the period?
A)34,000 units
B)54,000 units
C)44,000 units
D)40,000 units

Accepted Answer

To find the number of units completed and transferred out, you start with the total units that were available to work on during the period (units in process at the beginning + units started during the month) and subtract the units in process at the end of the month. This gives you: $4,000 + 40,000 - 10,000 = 34,000$ units.

Question 18

Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2018 are as follows: $$\begin{array} { | l | r | r | r | } 
\hline & &  { \text { Costs } } \
\hline & \text { Units } & \text { Materials } & { \text { Conversion } } \
\hline \text { Work in process, May 1 } & 25,000 & \$ 68,750 & \$ 167,650 \
\hline \text { Started during May } & 100,000 & 300,000 & 903,350 \
\hline \text { Work in process, May 31 } & 10,000 & & \
\hline
\end{array}$$ Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete. How many equivalent units for materials would there be for Anzalone Corporation in May using the FIFO method?
A)110,000 units
B)100,000 units
C)125,000 units
D)119,000 units

Accepted Answer

The answer of Anzalone Corporation adds raw materials to production...

Question 19

Maynard Inc. manufactures desks. The following data was given for production in February: $$\begin{array} { l r } 
\text { units, beginning work in process } & 0 \
\text { units started } & 200 \
\text { units completed } & ? \
\text { units, ending work in process ( } 40 \% \text { complete) } & 50
\end{array}$$ If a total of $11,050 in production costs were incurred, what is the unit cost in February?
A)$65
B)$55.25
C)$73.67
D)$221
E)none of the above

Accepted Answer

The answer of Maynard Inc. manufactures desks. The following data...

Question 20

"Total costs to account for" does NOT include which of the following costs?
A)direct materials requisitioned for the department
B)prior department costs transferred in
C)ending work-in-process balance
D)beginning work-in-process balance

Accepted Answer

Total costs to account for includes beginning work-in-process balance, direct materials requisitioned for the department, and prior department costs transferred in. However, it does NOT include the ending work-in-process balance. The ending work-in-process balance will be included in the total cost of goods manufactured.

Quiz 6: Process Costing

Which of the following is true of the first-in, first-out costing method?

The unit-costing method that excludes prior-period work and costs in computing current-period unit work and costs is called:

If beginning inventory contained 3,000 units of product that were judged to be 60 percent complete as to labor, the equivalent units of production for labor during the current period under the FIFO method for these 3,000 units are

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

"Total costs to account for" does NOT include which of the following costs?