Question 1

NYI Corporation manufactures decorative window glass in two sequential departments.These data pertain to the month of August: $$\begin{array} { | l | c | c | } 
\hline & \text { Department 1 } & \text { Department 2 } \
\hline \begin{array} { l } 
\text { Direct Materials used for } \
\text { production }
\end{array} & \$ 55,000 & \$ 32,000 \
\hline \text { Direct Labor } & 160,000 & 320,000 \
\hline \text { Applied factory overhead } & 340,000 & 250,000 \
\hline \begin{array} { l } 
\text { Cost of goods completed and } \
\text { transferred }
\end{array} & 850,000 & 740,000 \
\hline
\end{array}$$ Required: Prepare journal entries to record these events:
1.Incurrence of direct materials and direct labor.Application of factory overhead in department 1.
2.Transfer of products from department 1 to department 2.
3.Incurrence of direct materials and direct labor.Application of factory overhead in department 2.
4.Transfer of complete products from department 2 to finished goods inventory.

Accepted Answer

The answer of NYI Corporation manufactures decorative window glass in...

Question 2

Abnormal spoilage is considered what kind of cost?

Accepted Answer

A)  Period cost.
B)  Product cost.
C)  Opportunity cost.
D)  Sunk cost.E) None of the above
F) A) and B)

Question 3

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method.The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Accepted Answer

A)  $96,000.
B)  $476,400.
C)  $571,200.
D)  $484,000.
E)  $468,200.F) All of the above
G) C) and E)

Question 4

Backflush costing is a costing method that:

Accepted Answer

A)  Charges current production costs directly to finished goods inventory.
B)  Charges past production costs directly to finished goods inventory.
C)  Charges current production costs using actual costs incurred.
D)  Charges current production cost directly to work-in-process inventory.E) All of the above
F) A) and B) A

Question 5

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

Accepted Answer

A)  Beginning work-in-process inventory.
B)  Ending work-in-process inventory.
C)  Cost of goods manufactured and ending work-in-process inventory in the ratio of units worked on during the period to units remaining in work-in-process inventory.
D)  Cost of goods manufactured (transferred out) .
E)  A separate loss account in order to highlight production inefficiencies.F) A) and B)
G) C) and D)

Question 6

A Production Cost Report summarizes all except:

Accepted Answer

A)  The physical units of a department.
B)  The equivalent units of a department.
C)  The costs incurred during the period.
D)  The costs assigned to both units completed and ending work-in-process inventories.
E)  All of the above are correct.F) B) and D)
G) B) and E) E

Question 7

The journal entry to record the application of factory overhead to work in process would include a credit to:

Accepted Answer

A)  Work-in-Process.
B)  Cost of Goods Sold.
C)  Factory Overhead.
D)  Materials Inventory.
E)  Finished Goods Inventory.F) A) and D)
G) A) and E) C

Question 8

Pierce Co. manufactures a single product that goes through two processes — mixing and cooking. The following data pertains to the Mixing Department for September.Material R is added at the beginning of work in the Mixing Department. Material S is also added in the Mixing Department, but not until units of product are thirty percent completed with regard to conversion. Conversion costs are incurred uniformly during the process. 
Required:
(1) Calculate the equivalent units for Material R using the weighted-average method.
(2) Calculate the equivalent units for Material S using the weighted-average method.
(3) Calculate the equivalent units for conversion using the weighted-average method.
(4) Calculate the unit costs using the weighted-average method.
(5) Calculate the cost of units completed and transferred out using the weighted-average method.
(6) Calculate the cost of ending work in process using the weighted-average method.

Accepted Answer

1.124,000
2.124,000
3.109,600
...

Question 9

East Bay Fisheries Inc. processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2019 are provided below:

Total equivalent units for materials under the weighted-average method are calculated to be:

Accepted Answer

A)  6,830 equivalent units.
B)  8,180 equivalent units.
C)  6,980 equivalent units.
D)  7,140 equivalent units.
E)  7,620 equivalent units.F) A) and E)
G) A) and B)

Question 10

You are engaged in the audit of the December 31, 2013, financial statements of Epworth Products
Corporation.You are attempting to verify the costing of the work-in-process and finished goods ending inventories that were recorded on Epworth's books as follows:  Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60 percent of direct labor costs.Epworth uses the FIFO costing method.A review of Epworth's 2013 inventory cost records disclosed the following information:  Required: Prepare a production cost report to verify the inventory balances.What is the amount of potential understatement or overstatement of the ending work-in-process account?

Accepted Answer

Conversion costs:
$504,000 = ...

Question 11

Backflush costing:

Accepted Answer

A)  Is a simplified approach to determining product cost that is used when there is little or no work-in-process inventory.
B)  Involves the use of standard costing.
C)  Allows product costs to be quickly and conveniently calculated
D)  Is an approach to determining product cost that is used when JIT is used.
E)  ALL of the above.F) D) and E)
G) A) and B)

Question 12

Each of the following cases is independent.Use the FIFO method.  Required: Fill in the blanks.

Accepted Answer

Case A
Current costs = $44,000 + $6,000 ...

Question 13

Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the final department of Giddings's blockbuster drug called Solcax.  Beginning work-in-process (40% completed)  800 units  Transferred-in 4,000 units  Normal spoilage 400 units  Abnormal spoilage 200 units  Good units transferred out 3,600 units  Ending work-in-process (1/3 completed)  600 units  Conversion costs in beginning inventory $2,560 Current conversion costs $6,900\begin{array}{lr}	ext { Beginning work-in-process }(40 \% 	ext { completed)  } & 800 	ext { units } \	ext { Transferred-in } & 4,000 	ext { units } \	ext { Normal spoilage } & 400 	ext { units } \	ext { Abnormal spoilage } & 200 	ext { units } \	ext { Good units transferred out } & 3,600 	ext { units } \	ext { Ending work-in-process }(1 / 3 	ext { completed)  } & 600 	ext { units }\	ext { Conversion costs in beginning inventory } & \$ 2,560 \	ext { Current conversion costs } & \$ 6,900\end{array} Beginning work-in-process (40% completed)   Transferred-in  Normal spoilage  Abnormal spoilage  Good units transferred out  Ending work-in-process (1/3 completed)   Conversion costs in beginning inventory  Current conversion costs ​800 units 4,000 units 400 units 200 units 3,600 units 600 units $2,560$6,900​ Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question:
 What are the total conversion costs transferred to finished goods?

Accepted Answer

A)   $6,750.
B)   $7,740.
C)   $8,600.
D)   $9,460. E) A) and C)
F) All of the above

Question 14

Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Accepted Answer

A)  FIFO method.
B)  LIFO method.
C)  Specific unit method.
D)  Weighted-average method.
E)  Moving-average method.F) C) and D)
G) B) and E)

Question 15

Stoltenberg Co. had the following information for the month of June:  Work in process beginning inventory, June 12,000 units  Units transferred in 16,000 units  Work in process ending inventory, June 304,000 units \begin{array}{lr}	ext { Work in process beginning inventory, June } 1 & 2,000 	ext { units } \	ext { Units transferred in } & 16,000 	ext { units } \	ext { Work in process ending inventory, June } 30 & 4,000 	ext { units }\end{array} Work in process beginning inventory, June 1 Units transferred in  Work in process ending inventory, June 30​2,000 units 16,000 units 4,000 units ​ Beginning work-in-process inventory is 30 percent complete as to conversion. Ending work-in-process inventory is 50 percent complete as to conversion. Materials are added at the end of the process.
How many units were completed in June?

Accepted Answer

A)   12,000.
B)   10,000.
C)   14,000.
D)   16,000.
E)   18,000. F) C) and D)
G) B) and D)

Question 16

The U.S.Department of Agriculture urges the use of process costing together with:

Accepted Answer

A)  Normal costing.
B)  Volume-based costing.
C)  Activity-based costing.
D)  Standard costing.E) B) and C)
F) A) and D)

Question 17

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option D
E)  None of the above.F) C) and D)
G) All of the above

Question 18

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Accepted Answer

A)  Work-in-Process Inventory.
B)  Accrued Payroll.
C)  Factory Overhead.
D)  Materials Inventory.
E)  Finished Goods Inventory.F) A) and B)
G) A) and C)

Question 19

Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8".  Beginning work-in-process ( 40% completed)  400 units  Transferred-in 1,600 units  Normal spoilage 100 units  Abnormal spoilage 100 units  Good units transferred out 1,400 units  Ending work-in-process (25% completed)  400 units  Conversion costs in beginning inventory $180,500 Current conversion costs $728,218\begin{array}{lr}	ext { Beginning work-in-process ( } 40 \% 	ext { completed)  } & 400 	ext { units } \	ext { Transferred-in } & 1,600 	ext { units } \	ext { Normal spoilage } & 100 	ext { units } \	ext { Abnormal spoilage } & 100 	ext { units } \	ext { Good units transferred out } & 1,400 	ext { units } \	ext { Ending work-in-process }(25 \% 	ext { completed)  } & 400 	ext { units }\	ext { Conversion costs in beginning inventory } & \$ 180,500 \	ext { Current conversion costs } & \$ 728,218\end{array} Beginning work-in-process ( 40% completed)   Transferred-in  Normal spoilage  Abnormal spoilage  Good units transferred out  Ending work-in-process (25% completed)   Conversion costs in beginning inventory  Current conversion costs ​400 units 1,600 units 100 units 100 units 1,400 units 400 units $180,500$728,218​ Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question:
What are the total conversion costs of abnormal spoilage?

Accepted Answer

A)   $60,518.
B)   $53,454.
C)   $64,908.
D)   $58,314. E) A) and B)
F) A) and C)

Question 20

East Bay Fisheries Inc. processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2019 are provided below:Total equivalent units for conversion under the weighted-average method are calculated to be:

Accepted Answer

A)  6,830 equivalent units.
B)  8,180 equivalent units.
C)  6,980 equivalent units.
D)  7,140 equivalent units.
E)  7,620 equivalent units.F) C) and D)
G) A) and E)

Exam 6: Process Costing

Correct Answer
verified

Abnormal spoilage is considered what kind of cost?

Correct Answer
verified

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method.The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Correct Answer
verified

Backflush costing is a costing method that:

Correct Answer
verified
A

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

Correct Answer
verified

A Production Cost Report summarizes all except:

Correct Answer
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E

The journal entry to record the application of factory overhead to work in process would include a credit to:

Correct Answer
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C

Correct Answer
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1.124,000
2.124,000
3.109,600
...
View Answer

Correct Answer
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Correct Answer
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Conversion costs:
$504,000 = ...
View Answer

Backflush costing:

Correct Answer
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Each of the following cases is independent.Use the FIFO method. Required: Fill in the blanks.

Correct Answer
verified
Case A
Current costs = $44,000 + $6,000 ...
View Answer

Correct Answer
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Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Correct Answer
verified

Correct Answer
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The U.S.Department of Agriculture urges the use of process costing together with:

Correct Answer
verified

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

Correct Answer
verified

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Correct Answer
verified

Correct Answer
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Correct Answer
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Exam 6: Process Costing

Correct AnswerverifiedShow Answer

Abnormal spoilage is considered what kind of cost?

Correct AnswerverifiedShow Answer

Matrix Inc. calculates cost for an equivalent unit of production using the weighted-average method.The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Correct AnswerverifiedShow Answer

Backflush costing is a costing method that:

Correct AnswerverifiedA

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

Correct AnswerverifiedShow Answer

A Production Cost Report summarizes all except:

Correct AnswerverifiedE

The journal entry to record the application of factory overhead to work in process would include a credit to:

Correct AnswerverifiedC

Correct Answerverified1.124,0002.124,0003.109,600...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified Conversion costs:$504,000 = ...View AnswerShow Answer

Backflush costing:

Correct AnswerverifiedShow Answer

Each of the following cases is independent.Use the FIFO method. Required: Fill in the blanks.

Correct AnswerverifiedCase ACurrent costs = $44,000 + $6,000 ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The U.S.Department of Agriculture urges the use of process costing together with:

Correct AnswerverifiedShow Answer

The percentage of completion of the beginning work-in-process inventory should be considered in the computation of the equivalent units for which of the following methods of process costing?

Correct AnswerverifiedShow Answer

The journal entry to record requisitioned and usage of direct materials would include a credit to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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E

Correct Answer
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C

Correct Answer
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1.124,000
2.124,000
3.109,600
...
View Answer

Correct Answer
verified

Correct Answer
verified
Conversion costs:
$504,000 = ...
View Answer

Correct Answer
verified

Correct Answer
verified
Case A
Current costs = $44,000 + $6,000 ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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