Question 1

The Assembling Department of Weathercoat Liners,Inc.had 8000 units in process on December 1 and received 15,000 units from the Sewing Department.The company uses FIFO.Calculate the number of units to account for by the Assembling Department for December.

Accepted Answer

The Assembling Department had 8000 units in process on December 1 and received 15,000 units from the Sewing Department, totaling 23,000 units that need to be accounted for by the Assembling Department. Since the company uses FIFO, all of the units received from the Sewing Department will be processed before the units already in process on December 1, so the department needs to account for all 23,000 units.

Question 2

During August,the Filtering Department of Speedwell,Inc.had a beginning Work-in-Process Inventory balance of 120 units with costs of $60,000.During the month,it started and completed 260 units.It had 30 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in August under the first-in,first-out (FIFO)method?

Accepted Answer

To calculate the equivalent units of production for transferred in units in the Filtering Department, we need to use the FIFO method. Under the FIFO method, we assume that the units that were started first are completed first, and any units in ending work-in-process inventory are from the most recent batch of units started.

Beginning work-in-process inventory = 120 units
Units started and completed during the month = 260 units
Ending work-in-process inventory = 30 units

For transferred in units, we don't need to worry about the FIFO method since they were already completed in a prior department. Therefore, the number of equivalent units of production for transferred in units is equal to the number of units received, which is not given in the problem.

Using the FIFO method, the equivalent units of production for the units started during the month would be:
- Units started and completed during the month = 260 units
- Equivalent units of ending work-in-process inventory = (30 units x 100% complete) = 30 units
- Total equivalent units of production = 260 units + 30 units = 290 units

Therefore, the answer is C) 290 units.

Question 3

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the first units completed and transferred out.

Accepted Answer

FIFO method assumes that the first units started in the production process are the first units completed and transferred out, hence production cost reports prepared using this method are based on this assumption.

Question 4

Production cost reports prepared using the first-in,first-out (FIFO)method determine the cost of equivalent units of production by accounting for beginning inventory costs separately from current period costs.

Accepted Answer

This is true. FIFO assumes that the first units produced are the first ones sold, and it therefore separates the costs of beginning inventory from the costs of current production to determine the cost of equivalent units of production.

Question 5

In a production cost report prepared under the FIFO method,equivalent units of production are NOT computed for ________.

Accepted Answer

The answer of In a production cost report prepared under...

Question 6

The Polishing Department of Gaura,Inc.had 18,000 units in process on June 1 and received 30,000 units from the Machining Department.What is the number of units to account for by the Polishing Department for June? The company uses the FIFO costing method.

Accepted Answer

The Polishing Department had 18,000 units in process on June 1 and received 30,000 units from the Machining Department, so there were a total of 48,000 units to account for by the Polishing Department for June. Since the company uses the FIFO costing method, the units that were in process on June 1 would be considered first, followed by the units received from the Machining Department. Therefore, the number of units to account for by the Polishing Department for June is 48,000 units.

Question 7

Which of the following is an example of how managers use production cost reports to control costs?

Accepted Answer

Production cost reports provide information on the costs associated with producing products or services, including direct materials, direct labor, and overhead. Managers use this information to identify opportunities for cost reduction, such as acquiring newer, more efficient equipment that can improve productivity and reduce overhead costs. Therefore, option C is the best choice. Options A, B, and D are all important functions of cost management, but they do not specifically relate to the use of production cost reports to control costs.

Question 8

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for transferred in units in beginning inventory are zero because ________.

Accepted Answer

Under the FIFO method, the current period equivalent units of production for transferred in units in beginning inventory are zero because no additional costs are incurred for these units in the current period. The costs incurred for these units were already accounted for in the previous period.

Question 9

If a business operates in an industry that experiences significant cost changes,it would be to its benefit to use the first-in,first-out (FIFO)method.

Accepted Answer

FIFO assumes that the goods purchased or produced first are sold first. In times of rising costs, using FIFO would result in a lower cost of goods sold, higher gross profit, and lower taxes. This is beneficial for businesses that experience significant cost changes.

Question 10

Production cost reports prepared using first-in,first-out (FIFO)method determine the average cost of equivalent units of production by combining beginning inventory costs with current period costs.

Accepted Answer

Production cost reports prepared using FIFO method do not combine beginning inventory costs with current period costs to determine the average cost of equivalent units of production. Instead, FIFO assumes that the units completed and transferred out first are those that were started first, and assigns costs accordingly.

Question 11

When calculating the cost per equivalent unit in process costing,what is the difference between the weighted-average and FIFO methods?

Accepted Answer

With the FIFO method, prior period costs are not combined with the current period's costs. This is because the costs incurred in the previous period are assumed to be completed and transferred out before the current period's production begins. In contrast, with the weighted-average method, the costs from the previous period are included in the calculation of the cost per equivalent unit by averaging them with the current period's costs.

Question 12

During August,the Filtering Department of Rudbeckia,Inc.had beginning Work-in-Process inventory of 120 units with costs of $50,000.525 units were transferred in during the month.It had 60 units in ending Work-in-Process Inventory.Under the first-in,first-out (FIFO)method,current period equivalent units of production for transferred in units in beginning Work-in-Process Inventory of the Filtering Department is ________.

Accepted Answer

The answer of During August,the Filtering Department of Rudbeckia,Inc.had beginning...

Question 13

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for the units in the beginning inventory are always 100% complete.

Accepted Answer

Under the FIFO method, the units in the beginning inventory are considered in their state of completion at the start of the period. The current period's equivalent units of production only account for the work done during the current period to complete those units, not for the work done in previous periods.

Question 14

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the last units completed and sold.

Accepted Answer

Production cost reports prepared using the FIFO method assume that the first units started in the production process are the first units completed and sold, not the last.

Question 15

Under the first-in,first-out (FIFO)method,the cost of equivalent units of production is calculated by ________.

Accepted Answer

Under the FIFO method, beginning inventory costs and current period costs are accounted for separately. The cost of equivalent units of production is calculated by assigning the costs from the beginning inventory units to the first units completed and transferred out, and then assigning the costs from the current period's production to the remaining units in ending inventory and units transferred out.

Question 16

During September,the Filtering Department of Tithonia,Inc.had a beginning Work-in-Process Inventory of 600 units with costs of $140,000.During the month,it started and completed 800 units.It had 220 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in September under the first-in,first-out (FIFO)method?

Accepted Answer

To calculate the equivalent units of production for transferred in units under the FIFO method, we only consider the units that were completed during the period. 
Units completed during the period = 800 
Equivalent units of production for transferred in units = 800 
Therefore, the answer is B) 1020 units.

Question 17

Which of the following is used to calculate the number of units accounted for under first-in,first-out (FIFO)method of inventory valuation of process costing? This is the first department in a company using process costing.

Accepted Answer

Under the FIFO method of inventory valuation in process costing, the number of units accounted for includes the beginning balance of units, the units that were started and completed during the period, and the units that are still in process at the end of the period. This approach ensures that the costs associated with the oldest inventory are accounted for first.

Question 18

Which of the following is used to calculate the number of units to account for under the first-in,first-out (FIFO)method of inventory valuation of process costing? This is the second department in a company using process costing.

Accepted Answer

The FIFO method in process costing assumes that the first units that enter the process are the first ones to be completed and transferred out. Therefore, the number of units to account for under this method is equal to the beginning balance of units in the department plus the amount transferred in from the previous department. Option B is the correct formula, which calculates the total units to account for. Options A, C, and D either do not include the amount transferred in or include additional units that are still in process and not yet completed.

Question 19

Under the first-in,first-out (FIFO)method,prior period costs are not merged with current period costs.

Accepted Answer

Under FIFO method, the oldest costs are assigned to the inventory sold first, and the newest costs remain in the inventory balance. Thus, prior period costs are not merged with current period costs.

Question 20

List five ways in which managers use a production cost report to make decisions for their companies.

Accepted Answer

The answer of List five ways in which managers use...

Quiz 18: Process Costing