1. (TCO F) Computing unit product costs involves averaging in:
Job-Order Costing Process Costing
A Yes No
B Yes Yes
C No Yes
D No No
(Points : 5)
Choice A.
Choice B.
Choice C.
Choice D.
2. (TCO F) Process costing would be appropriate for each of the following except: (Points : 5)
custom furniture manufacturing.
oil refining.
grain milling.
newsprint production.
3. (TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company's processing departments for a recent month:
Units Material Cost
Beginning work in process 30,000 $22,000
Started during the month 80,000 $72,000
Units completed 85,000
Ending work in process 25,000
All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to: (Points : 5)
$0.86
$0.90
$1.10
$1.18
4. (TCO F) Which of the following accounts is debited when direct labor is recorded? (Points : 5)
Work in process
Salaries and wages expense
Salaries and wages payable
Manufacturing overhead
5. (TCO F) Stickles Corporation incurred $79,000 of actual Manufacturing Overhead costs during August. During the same period, the Manufacturing Overhead applied to Work in Process was $75,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: (Points : 5)
debit to Manufacturing Overhead of $79,000.
credit to Manufacturing Overhead of $79,000.
credit to Work in Process of $75,000.
debit to Work in Process of $75,000.
6. (TCO F) Wedd Corporation had $35,000 of raw materials on hand on May 1. During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total: (Points : 5)
$92,000.
$0.
$68,000.
$87,000.
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1. (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15)
i. Brick manufacturer
Process Costing
ii. Contract printer that produces posters, books, and pamphlets to order
Job-Order Costing
iii. Natural gas production company
Process Costing
iv. Dairy farm
Process Costing
v. Coal mining company
Process Costing
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
Job-Order Costing
2. (TCO F) Job 484 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $57,240
Direct labor hours 1,692 DLHs
Direct labor wage rate $12 per DLHS
Number of units completed 3,600 units
The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $24 per direct labor-hour.
Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)
Cost Summary
Direct Materials
$57,240
Direct Labor
$20,304
Manufacturing Overhead
$40,608
Total Cost
$118,152
Unit Product Cost
$32.82
3. (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650,000
Conversion $997,500
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory. (Points : 15)
a)
Materials
Conversion
Units Completed & Transferred Out
450,000
450,000
WIP, Dec. 31:
Materials
150,000
Conversion
75,000
Equivalent Units of Production
600,000
525,000
Materials
Conversion
Costs in Beginning WIP
$100,000
$157,500
Costs Added during the Year
$650,000
$997,500
Total
$750,000
$1,155,000
Equivalent Units of Production
600,000
525,000
Cost per Equivalent Unit
$1.25
$2.20
b)
Cost Transferred to FG
$1,552,500
c)
Ending WIP:
Materials
$187,500
Conversion
$165,000
Total
$352,500
4. (TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $28,000 $29,000
Work In process $16,000 $14,000
Finished goods $42,000 $54,000
Additional Information
Raw material purchases $56,000
Direct labor costs $87,000
Manufacturing overhead cost incurred $51,000
Indirect materials included in manufacturing overhead costs incurred $3,000
Manufacturing overhead cost applied to work in process $55,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)
Schedule of Cost of Goods Manufactured
Direct Materials:
Beginning materials inventory
$28,000
Add: purchases of raw materials
$56,000
Raw Materials Available for Use
$84,000
Deduct: Ending Raw Materials Inventory
$29,000
Raw Materials Used in Production
$55,000
Less: Indirect Materials included in MOH Incurred
$3,000
$52,000
Direct Labor
$87,000
MOH Applied to WIP
$55,000
Total Manufacturing Costs
$194,000
Add:Beginning WIP Inventory
$16,000
$210,000
Deduct: Ending WIP Inventory
$14,000
Cost of Goods Manufactured
$196,000
Cost of Goods Sold
Beginning Finished Goods Inventory
$42,000
Add: Cost of Goods Manufactured
$196,000
Goods Available for Sale
$238,000
Deduct: Ending Finished Goods Inventory
$54,000
Unadjusted Cost of Goods Sold
$184,000
Deduct: Overapplied overhead
$4,000
Adjusted Cost of Goods Sold
$180,000
6 years ago
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