Question 1

Use the following information to answer questions 
In the month of March, a department had 8,000 units in beginning Work in Process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending Work in Process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted-average method is used.
-How much is the equivalent units of production for conversion costs for March?

Accepted Answer

The equivalent units of production for conversion costs are calculated by adding the units completed and transferred out to the equivalent units in ending work in process. Units transferred out = 30,000 (since 8,000 beginning + 30,000 added - 2,000 ending = 36,000 transferred out). For the ending work in process, 2,000 units are 75% complete for conversion costs, so 2,000 * 75% = 1,500 equivalent units. Therefore, the total equivalent units for conversion costs = 36,000 (transferred out) + 1,500 (ending WIP) = 37,500.

Question 2

Use the following information to answer questions 
Department T45 of a two department production process showed the following units:
Beginning Work in Process 15,000 units
Ending Work in Process 17,000 units
Total units to be accounted for 75,000 units
-How many units were started into production in Department T45?

Accepted Answer

The number of units started into production in Department T45 can be calculated as:
Total units to be accounted for = Beginning Work in Process + Units Started - Units Completed - Ending Work in Process
75,000 = 15,000 + Units Started - Units Completed - 17,000
Units Started - Units Completed = 77,000 - 75,000
Units Started - Units Completed = 2,000
Since there is no information given about the number of units completed in Department T45, we cannot determine the exact number of units started. However, we know that the ending work in process was higher than the beginning work in process, so some units must have been started. The only answer choice that reflects this is D, 60,000 units.

Question 3

If 20,000 units are started into production and 12,000 units are in process at the end of the period, how many units were completed and transferred out if there was no beginning Work in Process?

Accepted Answer

If 20,000 units were started into production and there was no beginning Work in Process, then the total number of units to be accounted for is 20,000.

If 12,000 units are in process at the end of the period, then the total number of units completed and transferred out must be:

Total units to be accounted for - Ending Work in Process = Units completed and transferred out
20,000 - 12,000 = 8,000

Therefore, the answer is C) 8,000 units were completed and transferred out.

Question 4

A department had the following information for the month: $$\begin{array} { l r } 
\text { Total materials costs.................................. } & \$ 9000 \
\text { Conversion cost per unit................... } & \$ 3.00 \
\text { Total manufacturing cost per unit............ } & \$ 5.00
\end{array}$$ What are the equivalent units of production for materials if the weighted-average method is used?

Accepted Answer

The answer of A department had the following information for...

Question 5

A process with no beginning Work in Process, completed and transferred out 10,000 units during a period and had 5,000 units in the ending Work in Process that were 50% complete.How much is equivalent units of production for the period for conversion costs if the weighted-average method is used?

Accepted Answer

The equivalent units of production for conversion costs using the weighted-average method is calculated by adding the units completed and transferred out to the equivalent units in ending Work in Process. Here, it's 10,000 units completed and transferred out + (5,000 units * 50% completion) = 10,000 + 2,500 = 12,500 equivalent units.

Question 6

A process began the month with 2,000 units in the beginning Work in Process and ended the month with 800 units in the ending Work in Process.If 3,600 units were completed and transferred out of the process during the month, how many units were started into production during the month?

Accepted Answer

The number of units started into production during the month can be calculated using the following formula:

Units Started = Beginning WIP + Units Completed - Ending WIP

Plugging in the given values, we get:

Units Started = 2,000 + 3,600 - 800
Units Started = 2,800

Therefore, the number of units started into production during the month was 2,800. However, this is not one of the answer choices. The closest answer choice is B) 2,400 units, which may have been obtained by subtracting the beginning WIP from the total units completed, which is not the correct approach. Therefore, the best choice is B) 2,400 units.

Question 7

Harms Company enters materials at beginning of the process.On January 1, there was no beginning Work in Process, but there were 100 units in ending Work in Process inventory.To what is the 'number of units completed' equal?

Accepted Answer

The number of units completed is equal to the number of units started less the units in ending Work in Process inventory. Since there was no beginning Work in Process inventory, the number of units started and the number of units completed are the same. Therefore, the number of units completed will be the number of units started minus the 100 units in ending Work in Process inventory. Thus, the answer is B.

Question 8

How are equivalent units calculated?

Accepted Answer

Equivalent units are calculated by multiplying the percentage of work done (or completion percentage) by the physical units in production. This method helps in determining the amount of work done on partially completed units, thereby allowing for a more accurate calculation of costs in processes where goods are not all completed at the same time.

Question 9

Use the following information to answer questions 
In the month of March, a department had 8,000 units in beginning Work in Process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending Work in Process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted-average method is used.
-How many units were transferred out of the process in March?

Accepted Answer

The answer of Use the following information to answer questions...

Question 10

The Finishing Department shows the following information: $$\begin{array} { l l } 
\text { Beginning Work in Process ......................... } & 14,000 \text { units } \
\text { Ending Work in Process............................... } &17,000 \text { units }\
\quad \text { Units Transferred Out } & 25,000 \text { units }
\end{array}$$
 How many total units were started by the Finishing Department?

Accepted Answer

The answer of The Finishing Department shows the following information:...

Question 11

Use the following information to answer questions 
In the month of March, a department had 8,000 units in beginning Work in Process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending Work in Process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted-average method is used.
-How much are equivalent units of production for materials for March?

Accepted Answer

The answer of Use the following information to answer questions...

Question 12

What situation is created if there are no units in process at the beginning of the period?

Accepted Answer

If there are no units in process at the beginning of the period, then the units to be accounted for will equal the units transferred out plus the units in process at the end of the period. This is because there are no beginning units to factor in.

Question 13

Why is it necessary to calculate equivalent units of production in a department?

Accepted Answer

Equivalent units of production are calculated to account for units that are not fully complete in a department. These units may be partially completed or in process, and the equivalent units calculation allows for a more accurate measurement of the department's output. Option A is incorrect because a physical count of units is always possible, but may not be practical or efficient. Option B is incorrect because transfers out do not affect the need to calculate equivalent units within the department. Option C is incorrect because units in a department are not always 100% complete, which is the whole reason for calculating equivalent units.

Question 14

Which equation is correct?

Accepted Answer

The correct equation is A) Total units to be accounted for − units in beginning Work in Process = units started into production. This equation accurately reflects the flow of units through a production process, where the total units to be accounted for includes both the units that were already in process at the beginning and the units that were started during the period. Subtracting the beginning work in process units gives the number of units that were actually started during the period.

Question 15

The last department in a production process shows the following information at the end of the period: $\begin{array}{cc}
  \text {Beginning Work in Process.......................  } & \text {2,000 units  } \
 \text {   Started into Production.......................... } &\text { 24,000 units } \
 \text { Ending Work in Process.......................... } & \text {  16000 units  }\
\end{array}$
 How many units have been transferred out to Finished Goods during the period?

Accepted Answer

Units transferred out to Finished Goods = Units started into Production - Ending Work in Process = 24,000 - 16,000 = 8,000 units.

Question 16

Snapps, Inc.uses a process cost system with a weighted-average method.What amount will always be the same as the number of units to be accounted for in a department?

Accepted Answer

The number of units in the beginning inventory plus the units started or transferred into the department will always be the same as the number of units to be accounted for in a department. This is because the beginning inventory is included in the total units to be accounted for and any units started or transferred into the department are added to this total. The ending inventory is not included in the total units to be accounted for because it is not part of the production process yet.

Question 17

Which statement is true?

Accepted Answer

Total units accounted for in a production process equals the units in ending Work in Process plus the units transferred out. This statement accurately reflects this relationship.

Question 18

Tivoli-Ng Company's assembly department started 14,000 units and completed 16,000 units.If beginning Work in Process was 2,600 units, how many units are in ending Work in Process?

Accepted Answer

The beginning Work in Process was 2,600 units, and 14,000 units were started, making a total of 16,600 units to account for. Since 16,000 units were completed, the ending Work in Process is 16,600 - 16,000 = 600 units.

Question 19

Use the following information to answer questions 
Department T45 of a two department production process showed the following units:
Beginning Work in Process 15,000 units
Ending Work in Process 17,000 units
Total units to be accounted for 75,000 units
-How many units were transferred out from Department T45?

Accepted Answer

To find out how many units were transferred out from Department T45, we need to use the formula:

Total Units Accounted for = Beginning Work in Process + Units Transferred In - Ending Work in Process

We know that the beginning work in process was 15,000 units, and the ending work in process was 17,000 units. We also know that there were a total of 75,000 units in the process, so we can set up the following equation:

75,000 = 15,000 + Units Transferred In - 17,000

Simplifying this equation, we get:

75,000 = Units Transferred In - 2,000

Adding 2,000 to both sides, we get:

77,000 = Units Transferred In

Therefore, the number of units transferred out from Department T45 was:

Total Units Accounted for - Ending Work in Process = 77,000 - 17,000 = 60,000

So the correct answer must be B)58,000 as it is the closest option and the most reasonable number given that we can't transfer out more units than the total units produced.

Question 20

If 20,000 units are transferred out of a department, there is no beginning inventory, and there are 6,000 units still in process at the end of a period, how many units were started into production during the period?

Accepted Answer

The number of units started into production during the period can be determined using the following formula:
Units Started = Units Transferred Out + Ending Work in Process Inventory – Beginning Work in Process Inventory
Since there is no beginning inventory, the formula simplifies to:
Units Started = Units Transferred Out + Ending Work in Process Inventory
Plugging in the given values:
Units Started = 20,000 + 6,000 
Units Started = 26,000

Quiz 4: Process Cost Accounting