361 Chapter 6 MC Solutions

Chapter 6—Process Costing MULTIPLE CHOICE 1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? a. standard b. actual c. process d. job order ANS: C PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 2. Process costing is used in companies that a. engage in road and bridge construction. b. produce sailboats made to customer specifications. c. produce bricks for sale to the public. d. construct houses according to customer plans. ANS: C PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 3. A producer of ____ would not use a process costing system. a. gasoline b. potato chips c. blank videotapes d. stained glass windows ANS: D PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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4. A process costing system is used by a company that a. produces heterogeneous products. b. produces items by special request of customers. c. produces homogeneous products. d. accumulates costs by job. ANS: C PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 5. Which is the best cost accumulation procedure to use for continuous mass production of like units? a. actual b. standard c. job order d. process ANS: D PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 6. Equivalent units of production are equal to the a. units completed by a production department in the period. b. number of units worked on during the period by a production department. c. number of whole units that could have been completed if all work of the period had been used to produce whole units. d. identifiable units existing at the end of the period in a production department. ANS: C PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 7. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? a. only current period cost b. current period cost plus the cost of beginning inventory c. current period cost less the cost of beginning inventory d. current period cost plus the cost of ending inventory ANS: B PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 8. The weighted average method is thought by some accountants to be inferior to the FIFO method because it a. is more difficult to apply. b. only considers the last units worked on. c. ignores work performed in subsequent periods. d. commingles costs of two periods. ANS: D PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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9. The first step in determining the cost per EUP per cost component under the weighted average method is to a. add the beginning Work in Process Inventory cost to the current period's production cost. b. divide the current period's production cost by the equivalent units. c. subtract the beginning Work in Process Inventory cost from the current period's production cost. d. divide the current period's production cost into the EUP. ANS: A PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 10. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units a. started and completed during the period. b. residing in beginning Work in Process Inventory. c. residing in ending Work in Process Inventory. d. uncompleted in Work in Process Inventory. ANS: B PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 11. EUP calculations for standard process costing are the same as a. the EUP calculations for weighted average process costing. b. the EUP calculations for FIFO process costing. c. LIFO inventory costing for merchandise. d. the EUP calculations for LIFO process costing. ANS: B PTS: 1 DIF: Moderate OBJ: 6-5 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 12. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? a. units started this period b. units started last period c. units transferred out d. units still in process ANS: B PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 13. To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in units a. completed during the period and units in ending inventory. b. completed from beginning inventory, units started and completed during the period, and units partially completed in ending inventory. c. started during the period and units transferred out during the period. d. processed during the period and units completed during the period. ANS: B PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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14. The FIFO method of process costing will produce the same cost of goods transferred out amount as the weighted average method when a. the goods produced are homogeneous. b. there is no beginning Work in Process Inventory. c. there is no ending Work in Process Inventory. d. beginning and ending Work in Process Inventories are each 50 percent complete. ANS: B PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 15. The primary difference between the FIFO and weighted average methods of process costing is a. in the treatment of beginning Work in Process Inventory. b. in the treatment of current period production costs. c. in the treatment of spoiled units. d. none of the above. ANS: A PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 16. Material is added at the beginning of a process in a process costing system. The beginning Work in Process Inventory for the process was 30 percent complete as to conversion costs. Using the FIFO method of costing, the number of equivalent units of material for the process during this period is equal to the a. beginning inventory this period for the process. b. units started and completed this period in the process. c. units started this period in the process plus the beginning Work in Process Inventory. d. units started and completed this period plus the units in ending Work in Process Inventory. ANS: D PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 17. In a cost of production report using process costing, transferred-in costs are similar to the a. cost of material added at the beginning of production. b. conversion cost added during the period. c. cost transferred out to the next department. d. cost included in beginning inventory. ANS: A PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 18. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a a. debit Work in Process Inventory #2, credit Finished Goods Inventory. b. debit Finished Goods Inventory, credit Work in Process Inventory #1. c. debit Finished Goods Inventory, credit Work in Process Inventory #2. d. debit Cost of Goods Sold, credit Work in Process Inventory #2. ANS: C PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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19. Transferred-in cost represents the cost from a. the last department only. b. the last production cycle. c. all prior departments. d. the current period only. ANS: C PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 20. Which of the following is(are) the same between the weighted average and FIFO methods of calculating EUPs? Units to account for a. b. c. d.

no yes yes yes

EUP calculations yes yes no no

Total cost to account for no yes no yes

ANS: D PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 21. Process costing techniques should be used in assigning costs to products a. if a product is manufactured on the basis of each order received. b. when production is only partially completed during the accounting period. c. if a product is composed of mass-produced homogeneous units. d. whenever standard-costing techniques should not be used. ANS: C PTS: 1 DIF: Easy OBJ: 6-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 22. Averaging the total cost of completed beginning work-in-process inventory and units started and completed over all units transferred out is known as a. strict FIFO. b. modified FIFO. c. weighted average costing. d. normal costing. ANS: B PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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23. A process costing system a. cannot use standard costs. b. restates Work in Process Inventory in terms of completed units. c. accumulates costs by job rather than by department. d. assigns direct labor and manufacturing overhead costs separately to units of production. ANS: B PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 24. A process costing system does which of the following? Calculates EUPs a. b. c. d.

Assigns costs to inventories

no no yes yes

no yes yes no

ANS: C PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 25. A process costing system Calculates average cost per whole unit a. b. c. d.

yes no yes no

Determines total units to account for yes no no yes

ANS: D PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 26. A hybrid costing system combines characteristics of a. job order and standard costing systems. b. job order and process costing systems. c. process and standard costing systems. d. job order and normal costing systems. ANS: B PTS: 1 DIF: Easy OBJ: 6-6 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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27. When standard costs are used in process costing, a. variances can be measured during the production period. b. total costs rather than current production and current costs are used. c. process costing calculations are made simpler. d. the weighted average method of calculating EUPs makes computing transferred-out costs easier. ANS: D PTS: 1 DIF: Moderate OBJ: 6-5 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 28. Which of the following is subtracted from weighted average EUP to derive FIFO EUP? a. beginning WIP EUP completed in current period b. beginning WIP EUP produced in prior period c. ending WIP EUP not completed d. ending WIP EUP completed ANS: B PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 29. The cost of abnormal continuous losses is a. considered a product cost. b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis. c. written off as a loss on an equivalent unit basis. d. absorbed by all units past the inspection point. ANS: C PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 30. Abnormal spoilage can be continuous

discrete

a. b. c. d.

no no yes yes

yes no yes no

ANS: C PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 31. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considered a. normal and discrete. b. normal and continuous. c. abnormal and discrete. d. abnormal and continuous. ANS: D PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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32. A continuous loss a. occurs unevenly throughout a process. b. never occurs during the production process. c. always occurs at the same place in a production process. d. occurs evenly throughout the production process. ANS: D PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 33. Which of the following would be considered a discrete loss in a production process? a. adding the correct ingredients to make a bottle of ketchup b. putting the appropriate components together for a stereo c. adding the wrong components when assembling a stereo d. putting the appropriate pieces for a bike in the box ANS: C PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 34. The method of neglect handles spoilage that is a. discrete and abnormal. b. discrete and normal. c. continuous and abnormal. d. continuous and normal. ANS: D PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 35. The cost of normal discrete losses is a. absorbed by all units past the inspection point on an equivalent unit basis. b. absorbed by all units in ending inventory. c. considered a period cost. d. written off as a loss on an equivalent unit basis. ANS: A PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 36. The cost of abnormal continuous losses is a. considered a product cost. b. absorbed by all units in ending inventory and transferred out on an equivalent unit basis. c. written off as a loss on an equivalent unit basis. d. absorbed by all units past the inspection point. ANS: C PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

8

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37. Normal spoilage units resulting from a continuous process a. are extended to the EUP schedule. b. result in a higher unit cost for the good units produced. c. result in a loss being incurred. d. cause estimated overhead to increase. ANS: B PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 38. When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considered a. normal and discrete. b. normal and continuous. c. abnormal and discrete. d. abnormal and continuous. ANS: D PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 39. Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system? a. Miscellaneous Revenue b. Loss from Spoilage c. Finished Goods d. Work in Process ANS: D PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 40. The cost of abnormal discrete units must be assigned to good units

lost units

a. b. c. d.

yes no no yes

yes no yes no

ANS: D PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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41. Which of the following statements is false? The cost of rework on defective units, if a. abnormal, should be assigned to a loss account. b. normal and if actual costs are used, should be assigned to material, labor and overhead costs of the good production. c. normal and if standard costs are used, should be considered when developing the overhead application rate. d. abnormal, should be prorated among Work In Process, Finished Goods, and Cost of Goods Sold. ANS: D PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 42. If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that spoilage should be a. included with the cost of the units sold during the period. b. included with the cost of the units completed in that department during the period. c. allocated to ending work in process units and units transferred out based on their relative values. d. allocated to the good units that have passed the inspection point. ANS: D PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 43. Dallas Co. has a production process in which the inspection point is at 65 percent of conversion. The beginning inventory for July was 35 percent complete and ending inventory was 80 percent complete. Normal spoilage costs would be assigned to which of the following groups of units, using FIFO costing? Beginning Inventory a. b. c. d.

no yes no yes

Ending Inventory yes yes no no

Units Started & Completed yes yes yes no

ANS: B PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 44. Which of the following is not a question that needs to be answered with regard to quality control? a. What happens to the spoiled units? b. What is the actual cost of spoilage? c. How can spoilage be controlled? d. Why does spoilage happen? ANS: A PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting

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45. Normal spoilage units resulting from a continuous process a. are extended to the EUP schedule. b. result in a higher unit cost for the good units produced. c. result in a loss being incurred. d. cause estimated overhead to increase. ANS: B PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 46. The addition of material in a successor department that causes an increase in volume is called a. accretion. b. reworked units. c. complex procedure. d. undetected spoilage. ANS: A PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement, Reporting 47. Wood Company transferred 5,500 units to Finished Goods Inventory during October. On October 1, the company had 300 units on hand (40 percent complete as to both material and conversion costs). On October 31, the company had 800 units (10 percent complete as to material and 20 percent complete as to conversion costs). The number of units started and completed during October was: a. 5,200. b. 5,380. c. 5,500. d. 6,300. ANS: A Units Transferred Out Less: Units in Beginning Inventory Units Started and Completed

5,500 (300) 5,200

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 48. Cole Company transferred 6,000 units to Finished Goods Inventory during August. On August 1, the company had 400 units on hand (35 percent complete as to both material and conversion costs). On August 31, the company had 750 units (20 percent complete as to material and 30 percent complete as to conversion costs). The number of units started and completed during August was: a. 5,600 b. 5,860 c. 6,000 d. 6,750 ANS: A Units Transferred Out Less: Units in Beginning Inventory Units Started and Completed

6,000 (400) 5,600

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting

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49. Boggs Company started 9,000 units in March. The company transferred out 7,000 finished units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs. Beginning Work in Process Inventory units were a. 500. b. 600. c. 1,500. d. 2,000. ANS: C Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

1,500 9,000 (7,000) 3,500

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 50. Williams Company started 8,600 units in April. The company transferred out 6,400 finished units and ended the period with 3,200 units that were 40 percent complete as to both material and conversion costs. Beginning Work in Process Inventory units were a. 400. b. 1,000. c. 1,280. d. 2,200. ANS: B Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

1,000 8,600 (6,400) 3,200

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 51. Lincoln Company had beginning Work in Process Inventory of 5,000 units that were 40 percent complete as to conversion costs. Lincoln Company started and completed 42,000 units this period and had ending Work in Process Inventory of 12,000 units. How many units were started this period? a. 42,000 b. 47,000 c. 54,000 d. 59,000 ANS: C Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

5,000 54,000 ( 47,000) 12,000

PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting

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52. Douglas Company had beginning Work in Process Inventory of 6,000 units that were 45 percent complete as to conversion costs. Douglas Company started and completed 46,000 units this period and had ending Work in Process Inventory of 11,000 units. How many units were started this period? a. 46,000 b. 52,000 c. 57,000 d. 63,000 ANS: C Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

6,000 57,000 ( 52,000) 11,000

PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 53. Streete Company uses a weighted average process costing system. Material is added at the start of production. Streete Company started 13,000 units into production and had 4,500 units in process at the start of the period that were 60 percent complete as to conversion costs. If Streete Company transferred out 11,750 units, how many units were in ending Work in Process Inventory? a. 1,250 b. 3,000 c. 3,500 d. 5,750 ANS: D Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

4,500 13,000 ( 11,750) 5,750

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 54. Roache Company uses a weighted average process costing system. Material is added at the start of production. Roache Company started 14,000 units into production and had 5,000 units in process at the start of the period that were 75 percent complete as to conversion costs. If Roache Company transferred out 12,250 units, how many units were in ending Work in Process Inventory? a. 1,750 b. 3,000 c. 5,500 d. 6,750 ANS: D Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

5,000 14,000 ( 12,250) 6,750


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55. Jones Company uses a weighted average process costing system and started 30,000 units this month. Jones had 12,000 units that were 20 percent complete as to conversion costs in beginning Work in Process Inventory and 3,000 units that were 40 percent complete as to conversion costs in ending Work in Process Inventory. What are equivalent units for conversion costs? a. 37,800 b. 40,200 c. 40,800 d. 42,000 ANS: B Beginning Work in Process + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

12,000 12,000 27,000 3,000

20% 80% 100% 40%

2,400 9,600 27,000 1,200 40,200

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 56. Summers Company uses a weighted average process costing system and started 36,000 units this month. Jones had 15,000 units that were 25 percent complete as to conversion costs in beginning Work in Process Inventory and 6,000 units that were 35 percent complete as to conversion costs in ending Work in Process Inventory. What are equivalent units for conversion costs? a. 43,350 b. 47,100 c. 48,900 d. 51,000 ANS: B Beginning Work in Process + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

15,000 15,000 30,000 6,000

25% 75% 100% 35%

3,750 11,250 30,000 2,100 47,100

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 57. Weston Company makes small metal containers. The company began April with 250 containers in process that were 30 percent complete as to material and 40 percent complete as to conversion costs. During the month, 5,000 containers were started. At month end, 1,700 containers were still in process (45 percent complete as to material and 80 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for conversion costs? a. 3,450 b. 4,560 c. 4,610 d. 4,910

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ANS: D Beginning Work in Process + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

250 250 3,300 1,700

40% 60% 100% 80%

100 150 3,300 1,360 4,910

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 58. Meade Company makes small metal containers. The company began October with 300 containers in process that were 35 percent complete as to material and 45 percent complete as to conversion costs. During the month, 6,000 containers were started. At month end, 1,900 containers were still in process (40 percent complete as to material and 75 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for conversion costs? a. 4,265 b. 5,590 c. 5,825 d. 6,300 ANS: C Beginning Work in Process + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

300 300 4,100 1,900

45% 55% 100% 75%

135 165 4,100 1,425 5,825

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 59. Ormandy Company uses a FIFO process costing system. The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month. The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process? a. 18,000 b. 22,000 c. 25,000 d. 27,000 ANS: B The material is added at the beginning of the process; therefore there are 22,000 equivalent units of material.

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 60. Bernstein Company uses a FIFO process costing system. The company had 6,000 units that were 75 percent complete as to conversion costs at the beginning of the month. The company started 25,000 units this period and had 8,000 units in ending Work in Process Inventory that were 40 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process?

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a. b. c. d.

16

18,500 25,000 26,500 31,000

ANS: B The material is added at the beginning of the process; therefore there are 25,000 equivalent units of material.

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 61. Montgomery Company makes fabric-covered hatboxes. The company began July with 500 boxes in process that were 100 percent complete as to cardboard, 80 percent complete as to cloth, and 60 percent complete as to conversion costs. During the month, 3,300 boxes were started. On April 30, 350 boxes were in process (100 percent complete as to cardboard, 70 percent complete as to cloth, and 55 percent complete as to conversion costs). Using the FIFO method, what are equivalent units for cloth? a. 3,295 b. 3,395 c. 3,450 d. 3,595 ANS: A Beginning Work in Process (Ignored for FIFO) + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

500 500 2,950 350

0% 20% 100% 70%

100 2,950 245 3,295

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 62. Hahn Company makes fabric-covered storage totes. The company began July with 600 totes in process that were 100 percent complete as to cardboard, 75 percent complete as to cloth, and 65 percent complete as to conversion costs. During the month, 3,600 totes were started. On April 30, 450 totes were in process (100 percent complete as to cardboard, 60 percent complete as to cloth, and 50 percent complete as to conversion costs). Using the FIFO method, what are equivalent units for cloth? a. 3,570 b. 3,750 c. 3,870 d. 4,020 ANS: A Beginning Work in Process (Ignored for FIFO) + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

600 600 3,150 450

0% 25% 100% 60%

150 3,150 270 3,570


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Brewer Corporation Brewer Corporation. has the following information for August: Beginning Work in Process Inventory (70% complete as to conversion) Started Ending Work in Process Inventory (10% complete as to conversion)

6,000 units 24,000 units 8,500 units

Beginning WIP Inventory Costs: Material Conversion

$23,400 50,607

Current Period Costs: Material Conversion

$31,500 76,956

All material is added at the start of the process and all finished products are transferred out. 63. Refer to Brewer Corporation. How many units were transferred out in August? a. 15,500 b. 18,000 c. 21,500 d. 24,000 ANS: C Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

6,000 24,000 (21,500) 8,500

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 64. Refer to Brewer Corporation. Assume that weighted average process costing is used. What is the cost per equivalent unit for material? a. $0.55 b. $1.05 c. $1.31 d. $1.83 ANS: D Material Costs: Beginning Current Period

$23,400 31,500 54,900 ÷ 30,000 units =

$ 1.83


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65. Refer to Brewer Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion? a. $3.44 b. $4.24 c. $5.71 d. $7.03 ANS: B Conversion Costs: Beginning (Ignored for FIFO) Current Period

$ $

Equivalent Units Beginning Inventory (6,000 * 30%) Started and Completed (15,500) Ending Inventory (8,500 * 10%)

76,956 76,956 1,800 15,500 850 18,150 eq units

Cost per equivalent unit

$ 4.24

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Collins Corporation Collins Corporation. has the following information for May: Beginning Work in Process Inventory (75% complete as to conversion) Started Ending Work in Process Inventory (15% complete as to conversion)

7,500 units 27,000 units 9,400 units

Beginning WIP Inventory Costs: Material Conversion

$25,500 52,725

Current Period Costs: Material Conversion

$34,300 80,845

All material is added at the start of the process and all finished products are transferred out. 66. Refer to Collins Corporation. How many units were transferred out in May? a. 17,600 b. 19,500 c. 25,100 d. 27,000

Chapter 6

19

ANS: C Beginning Work in Process Add: Units Started Deduct: Units Transferred Out Ending Work in Process

7,500 27,000 (25,100) 9,400

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 67. Refer to Collins Corporation. Assume that weighted average process costing is used. What is the cost per equivalent unit for material? a. $0.99 b. $1.18 c. $1.64 d. $1.73 ANS: D Material Costs: Beginning Current Period

$25,500 _34,300 $59,800 ÷ 34,500 units =

$ 1.73

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 68. Refer to Collins Corporation. Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion? a. $3.05 b. $3.87 c. $4.25 d. $6.40 ANS: B Conversion Costs: Beginning (Ignored for FIFO) Current Period

$ $

Equivalent Units Beginning Inventory (7,500 * 25%) Started and Completed (17,600) Ending Inventory (9,400 * 15%)

80,845 80,845 1,875 17,600 1,410 20,885 equivalent units

Cost per equivalent unit ($80,845/20885)

$ 3.87


Chapter 6

20

Fantastic Decorations Corporation The Fantastic Decorations Corporation makes wreaths in two departments: Forming and Decorating. Forming began the month with 500 wreaths in process that were 100 percent complete as to material and 40 percent complete as to conversion. During the month, 6,500 wreaths were started. At month end, Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion. Assume Forming uses the weighted average method of process costing. Costs in the Forming Department are as follows: Beginning Work in Process Costs: Material Conversion Current Costs: Material Conversion

$1,000 1,500 $3,200 5,045

The Decorating Department had 600 wreaths in process at the beginning of the month that were 80 percent complete as to material and 90 percent complete as to conversion. The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion. Decorating uses the FIFO method of process costing, and costs associated with Decorating are: Beginning WIP Inventory: Transferred In Material Conversion Current Period: Transferred In Material Conversion

$1,170 4,320 6,210 ? $67,745 95,820

69. Refer to Fantastic Decorations Corporation. How many units were transferred to Decorating during the month? a. 600 b. 4,900 c. 5,950 d. 7,000 ANS: B Wreaths completed from BWIP Wreaths started and completed

500 4,400 4,900

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 70. Refer to Fantastic Decorations Corporation. What was the cost transferred out of Forming during the month? a. $5,341 b. $6,419 c. $8,245 d. $8,330

Chapter 6

21

ANS: D Units Transferred Out 4,900

Cost per Eq. Unit 1.70

Total $8,330

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 71. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units as to costs in Decorating for the transferred-in cost component. a. 7,400 b. 7,700 c. 8,000 d. 8,600 ANS: C The transferred-in cost component is the 8,000 units that were transferred in.

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 72. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for material. a. 7,970 b. 8,000 c. 8,330 d. 8,450 ANS: A Materials: Decorating: FIFO Beginning Work in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

Units 600 7,700 300

% Complete 20% 100% 50%

Eqiv. Units 120 7,700 150 7,970

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 73. Refer to Fantastic Decorations Corporation. Assume 8,000 units were transferred to Decorating. Compute the number of equivalent units in Decorating for conversion. a. 7,925 b. 7,985 c. 8,360 d. 8,465

Chapter 6

22

ANS: B Conversion: Decorating: FIFO

Units

Beginning Work in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

% Complete

Equiv. Units

600

10%

60

7,700

100%

7,700

300

75%

225 7,985

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 74. Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a total cost of $16,000. What is the material cost per equivalent unit in Decorating? a. $8.50 b. $8.65 c. $8.80 d. $9.04 ANS: A When FIFO is used, consider only current costs. Current Costs $67,745

Equiv Units 7,970

Cost/ Equiv Unit $8.50

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 75. Refer to Fantastic Decorations Corporation. Assume that 8,000 units were transferred to Decorating at a total cost of $16,000. What is the conversion cost per equivalent unit in Decorating? a. $11.32 b. $11.46 c. $12.00 d. $12.78 ANS: C When FIFO is used, consider only current costs. Current Costs $95,820

Equiv Units 7,985

Cost/ Equiv Unit $12.00


Chapter 6

76.

23

Refer to Fantastic Decorations Corporation. Assume the material cost per EUP is $8.00 and the conversion cost per EUP is $15 in Decorating. What is the cost of completing the units in beginning inventory? a. $ 960 b. $ 1,380 c. $ 1,860 d. $11,940 ANS: C Costs to Complete Beg Inv Materials Conversion Total Costs to Complete

Units 600 600

Percent to Complete

Cost per Unit 20% $8 10% $15

Total $960 $900 $1,860

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Four Seasons Company Four Seasons Company adds material at the start to its production process and has the following information available for August: Beginning Work in Process Inventory (40% complete as to conversion) Started this period Ending Work in Process Inventory (25% complete as to conversion) Transferred out

7,000 32,000

units units

2,500 ?

units

77. Refer to Four Seasons Company. Compute the number of units started and completed in August. a. 29,500 b. 34,500 c. 36,500 d. 39,000 ANS: A Units started this period Less: Ending Work in Process Units started and completed this period

32,000 2,500 29,500

PTS: 1 DIF: Moderate OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 78. Refer to Four Seasons Company. Calculate equivalent units of production for material using FIFO. a. 32,000 b. 36,800 c. 37,125 d. 39,000

Chapter 6

24

ANS: A Materials are added at the beginning of the process. 32,000 units were started in the current period; therefore there are 32,000 equivalent units for materials.

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 79. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using FIFO. a. 30,125 b. 34,325 c. 37,125 d. 39,000 ANS: B Equivalent Units for Conversion Beginning Inventory (7,000 * 60%) Started and Completed (29,500) Ending Inventory (2,500 * 25%)

4,200 29,500 625 34,325 eq. units

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 80. Refer to Four Seasons Company. Calculate equivalent units of production for material using weighted average. a. 32,000 b. 34,325 c. 37,125 d. 39,000 ANS: D Equivalent Units--Materials Beginning Inventory (7,000 units) Started this Period (32,000)

7,000 32,000 39,000 eq. units

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 81. Refer to Four Seasons Company. Calculate equivalent units of production for conversion using weighted average. a. 34,325 b. 37,125 c. 38,375 d. 39,925 ANS: B Equivalent Units--Conversion Beginning Inventory (7,000 * 100%) Started and Completed (29,500) Ending Inventory (2,500 * 25%)

7,000 29,500 625 37,125 eq. units

Chapter 6

25

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Simpson Company Simpson Company adds material at the start of production. The following production information is available for September: Beginning Work in Process Inventory (45% complete as to conversion) Started this period Ending Work in Process Inventory (80% complete as to conversion) Beginning Work in Process Inventory Costs: Material Conversion Current Period Costs: Material Conversion

10,000 120,000

units units

8,200

units

$24,500 68,905

$ 75,600 130,053

82. Refer to Simpson Company. How many units must be accounted for? a. 118,200 b. 128,200 c. 130,000 d. 138,200 ANS: C Beginning Work in Process Units Started Total Units

10,000 120,000 130,000

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 83. Refer to Simpson Company. What is the total cost to account for? a. $ 93,405 b. $205,653 c. $274,558 d. $299,058 ANS: D BWIP: Materials BWIP: Conversion Current Period: Materials Current Period: Conversion Total Costs

$ 24,500 68,905 75,600 130,053 $299,058


Chapter 6

26

84. Refer to Simpson Company. How many units were started and completed in the period? a. 111,800 b. 120,000 c. 121,800 d. 130,000 ANS: A Units started this period Less: Ending Work in Process Units started and completed this period

120,000 8,200 111,800

PTS: 1 DIF: Easy OBJ: 6-2 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 85. Refer to Simpson Company. What are the equivalent units for material using the weighted average method? a. 120,000 b. 123,860 c. 128,360 d. 130,000 ANS: D Equivalent Units Beginning Inventory (10,000 * 100%) Started and Completed (111,800) Ending Inventory (8,200 * 25%)

10,000 111,800 8,200 130,000 eq. units

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 86. Refer to Simpson Company. What are the equivalent units for material using the FIFO method? a. 111,800 b. 120,000 c. 125,500 d. 130,000 ANS: B Equivalent Units Beginning Inventory (Ignored for FIFO) Started and Completed (111,800) Ending Inventory (8,200 * 25%)

0 111,800 8,200 120,000 eq. units

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 87. Refer to Simpson Company. What are the equivalent units for conversion using the weighted average method? a. 120,000 b. 123,440 c. 128,360 d. 130,000

Chapter 6

27

ANS: C Beginning Work in Process + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

10,000 10,000 111,800 8,200

45% 55% 100% 80%

4,500 5,500 111,800 6,560 128,360

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 88. Refer to Simpson Company. What are the equivalent units for conversion using the FIFO method? a. 118,360 b. 122,860 c. 123,860 d. 128,360 ANS: C Beginning Work in Process (ignored) + Completion of Units in Process + Units Started and Completed + Ending Work in Process Equivalent Units of Production

10,000 10,000 111,800 8,200

0% 55% 100% 80%

5,500 111,800 6,560 123,860

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 89. Refer to Simpson Company. What is the material cost per equivalent unit using the weighted average method? a. $.58 b. $.62 c. $.77 d. $.82 ANS: C Material Costs: Beginning Current Period

$ 24,500 75,600 100,100 ÷ 130,000 units=

$ 0.77 per unit

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 90. Refer to Simpson Company. What is the conversion cost per equivalent unit using the weighted average method? a. $1.01 b. $1.05 c. $1.55 d. $1.61

Chapter 6

28

ANS: C Conversion Costs: Beginning Current Period

$ 68,905 130,053 198,958 ÷ 128,360 units=

$ 1.55 per unit

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 91. Refer to Simpson Company. What is the cost of units completed using the weighted average method? a. $237,510 b. $266,742 c. $278,400 d. $282,576 ANS: D Units Completed 121,800

Costs per Equivalent Unit (1.55 + .77) = $2.32

Total $282,576

PTS: 1 DIF: Difficult OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 92. Refer to Simpson Company. What is the conversion cost per equivalent unit using the FIFO method? a. $1.05 b. $.95 c. $1.61 d. $1.55 ANS: A Conversion Costs: Beginning (Ignored) Current Period

$130,053 $130,053 ÷ 123,860 units= $1.05 per unit

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 93. Refer to Simpson Company. What is the cost of all units transferred out using the FIFO method? a. $204,624 b. $191,289 c. $287,004 d. $298,029 ANS: C Beginning Inventory 10,000 units: Raw Materials (prior period) Direct Labor (prior period FOH (10,000 * .55 * $1.05) Units Started and Completed 111,800 units * $ (.63+1.05): Total

$24,500 68,905 5,775 $99,180 $187,824 $287,004

Chapter 6

29

PTS: 1 DIF: Difficult OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Mercury Corporation Beginning inventory (30% complete as to Material B and 60% complete for conversion) Started this cycle Ending inventory (50% complete as to Material B and 80% complete for conversion)

700

units

2,000 500

units units

Beginning inventory costs: Material A Material B Conversion

$14,270 5,950 5,640

Current Period costs: Material A Material B Conversion

$40,000 70,000 98,100

Material A is added at the start of production, while Material B is added uniformly throughout the process. 94. Refer to Mercury Corporation. Assuming a weighted average method of process costing, compute EUP units for Materials A and B. a. 2,700 and 2,280, respectively b. 2,700 and 2,450, respectively c. 2,000 and 2,240, respectively d. 2,240 and 2,700, respectively ANS: B Weighted Average Beginning Work in Process Units Started and Completed Ending Work in Process EUP Materials

Material A 700 1,500 500 2,700

Material B 700 1,500 250 2,450

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 95. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP units for Materials A and B. a. 2,700 and 2,280, respectively b. 2,700 and 2,450, respectively c. 2,000 and 2,240, respectively d. 2,450 and 2,880, respectively ANS: C FIFO Beginning Work in Process Units Started and Completed Ending Work in Process EUP Materials

Material A 0 1,500 500 2,000

Material B 490 1,500 250 2,240

Chapter 6

30

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 96. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute EUP for conversion. a. 2,600 b. 2,180 c. 2,000 d. 2,700 ANS: A Weighted Average Beginning Work in Process Units Started and Completed Ending Work in Process

700 1,500 400 2,600

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 97. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP for conversion. a. 2,240 b. 2,180 c. 2,280 d. 2,700 ANS: B FIFO Beginning Work in Process (700 * 40%) Units Started and Completed Ending Work in Process (500 * 80%)

280 1,500 400 2,180

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 98. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per unit for Material A. a. $20.10 b. $20.00 c. $31.25 d. $31.00 ANS: A Weighted Average: Material A Beginning Current Period

$

14,270 40,000 54,270 ÷ 2,700 units=

$ 20.10 per unit


Chapter 6

31

99. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for Material A. a. $31.25 b. $20.10 c. $20.00 d. $31.00 ANS: C Material A Costs (Current Period) $40,000

Equivalent Units

Average Cost per EUP

2,000

$20.00

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 100. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for Material B. a. $20.10 b. $31.25 c. $20.00 d. $31.00 ANS: B Material B Costs (Current Period) $70,000

Equivalent Units 2,240

Average Cost per EUP $31.25

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 101. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per EUP for Material B. a. $20.00 b. $31.25 c. $20.10 d. $31.00 ANS: D Material B Costs (Beginning Inventory and Current Period) $75,950

Equivalent Units 2,450

Average Cost per EUP $31.00

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 102. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for conversion. a. $45.50 b. $45.00 c. $43.03 d. $47.59

Chapter 6

32

ANS: B Conversion Costs (Current Period) $98,100

Equivalent Units

Average Cost per EUP 2,180

$45.00

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 103. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per EUP for conversion. a. $39.90 b. $45.00 c. $43.03 d. $47.59 ANS: A Conversion Costs (Beginning WIP and Current Period)

Equivalent Units

$(98,100 + $5,640)=$103,640

Average Cost per EUP

2,600

$39.90

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Guthrie Corporation The following information is available for Guthrie Corporation for the current year: Beginning Work in Process (75% complete) Started Ending Work in Process (60% complete) Abnormal spoilage Normal spoilage (continuous) Transferred out

Costs of Beginning Work in Process: $25,100 Material 50,000 Conversion Current Costs: 16,000 units $120,000 Material 2,500 units 300,000 Conversion 14,500 units 75,000 units

5,000 units 66,000 units

All materials are added at the start of production. 104. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for material? a. 82,000 b. 89,500 c. 84,500 d. 70,000 ANS: C Materials: Weighted Average Beginning Work in Process + Units Started and Completed + Ending Work in Process + Abnormal Spoilage Equivalent Units of Production

Units 14,500 51,500 16,000 2,500

% Complete 100% 100% 100% 100%

Eq. Units 14,500 51,500 16,000 2,500 84,500

Chapter 6

33

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 105. Refer to Guthrie Corporation. Using weighted average, what are equivalent units for conversion costs? a. 80,600 b. 78,100 c. 83,100 d. 75,600 ANS: B Conversion: Weighted Average Beginning Work in Process + Units Started and Completed + Ending Work in Process + Abnormal Spoilage Equivalent Units of Production

Units 14,500 51,500 16,000 2,500

% Complete 100% 100% 60% 100%

Eq Units 14,500 51,500 9,600 2,500 78,100

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 106. Refer to Guthrie Corporation. What is the cost per equivalent unit for material using weighted average? a. $1.72 b. $1.62 c. $1.77 d. $2.07 ANS: A Weighted Average: Materials Beginning Current Period

$

25,100 120,000 145,100 ÷ 84,500 units= $1.72 per unit

PTS: 1 DIF: Moderate OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 107. Refer to Guthrie Corporation. What is the cost per equivalent unit for conversion costs using weighted average? a. $4.62 b. $4.21 c. $4.48 d. $4.34 ANS: C Weighted Average: Conversion Beginning Current Period

$ $

50,000 300,000 350,000 ÷ 78,100 units = $ 4.48 per unit


Chapter 6

34

108. Refer to Guthrie Corporation. What is the cost assigned to normal spoilage using weighted average? a. $31,000 b. $15,500 c. $30,850 d. None of the responses are correct ANS: D No costs are assigned to normal, continuous spoilage. Higher costs are assigned to good units produced.

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 109. Refer to Guthrie Corporation. Assume that the cost per EUP for material and conversion are $1.75 and $4.55, respectively. What is the cost assigned to ending Work in Process? a. $100,800 b. $87,430 c. $103,180 d. $71,680 ANS: D Equivalent Units 16,000 9,600

Cost per Equivalent Unit $1.75 $4.55

Total $28,000 $43,680 $71,680

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 110. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for material? a. 75,000 b. 72,500 c. 84,500 d. 70,000 ANS: D Materials: FIFO Beginning Work in Process + Units Started and Completed + Ending Work in Process + Abnormal Spoilage Equivalent Units of Production

51,500 16,000 2,500

0% 100% 100% 100%

51,500 16,000 2,500 70,000

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 111. Refer to Guthrie Corporation. Using FIFO, what are equivalent units for conversion costs? a. 72,225 b. 67,225 c. 69,725 d. 78,100

Chapter 6

35

ANS: B Conversion: FIFO Beginning Work in Process + Units Started and Completed + Ending Work in Process + Abnormal Spoilage Equivalent Units of Production

14,500 51,500 16,000 2,500

25% 100% 60% 100%

3,625 51,500 9,600 2,500 67,225

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 112. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for material? a. $1.42 b. $1.66 c. $1.71 d. $1.60 ANS: C FIFO: Materials Current Period

$

120,000 120,000 ÷ 70,000 units = $1.71 per unit

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 113. Refer to Guthrie Corporation. Using FIFO, what is the cost per equivalent unit for conversion costs? a. $4.46 b. $4.15 c. $4.30 d. $3.84 ANS: A FIFO: Conversion Current Period

$

300,000 300,000 ÷ 67,225 units =

$ 4.46 per unit

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 114. Refer to Guthrie Corporation. Assume that the FIFO EUP cost for material and conversion are $1.50 and $4.75, respectively. Using FIFO what is the total cost assigned to the units transferred out? a. $414,194 b. $339,094 c. $445,444 d. $396,975 ANS: A Transferred Out Units: FIFO Beginning Work in Process + Completion of Beginning Inventory +Units Started and Completed Equivalent Units of Production

Equiv Units (14,500 * 25%)

3,625 51,500

Cost per Equiv Unit 4.75 6.25

Total 75,100 17,219 321,875 414,194

Chapter 6

36

PTS: 1 DIF: Difficult OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Crafton Corporation Crafton Corporation has the following information for the current month: Units started Beginning Work in Process: (35% complete) Normal spoilage (discrete) Abnormal spoilage Ending Work in Process: (70% complete) Transferred out Beginning Work in Process Costs: Material Conversion

100,000 20,000 3,500 5,000 14,500 97,000

units units units units units units

$15,000 10,000

All materials are added at the start of the production process. Crafton Corporation inspects goods at 75 percent completion as to conversion. 115. Refer to Crafton Corporation. What are equivalent units of production for material, assuming FIFO? a. 100,000 b. 96,500 c. 95,000 d. 120,000 ANS: A Materials: FIFO Beginning Work in Process + Units Started and Completed + Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

77,000 3,500 5,000 14,500

0% 100% 100% 100% 100%

77,000 3,500 5,000 14,500 100,000

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 116. Refer to Crafton Corporation. What are equivalent units of production for conversion costs, assuming FIFO? a. 108,900 b. 103,900 c. 108,650 d. 106,525 ANS: D Conversion: FIFO Beginning Work in Process + Units Started and Completed +Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

20,000 77,000 3,500 5,000 14,500

65% 100% 75% 75% 70%

13,000 77,000 2,625 3,750 10,150 106,525

Chapter 6

37

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 117. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. What is the amount of the period cost for July using FIFO? a. $0 b. $9,375 c. $10,625 d. $12,500 ANS: C Abnormal spoilage is a period cost. Materials Conversion Costs Total Abnormal Spoilage

5,000 * $1.00/unit 3,750 * $1.50/unit

$5,000 5,625 $10,625

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 118. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest dollar)? a. $245,750 b. $244,438 c. $237,000 d. $224,938 ANS: B Transferred Out Units: FIFO Beginning Work in Process + Completion of Beginning Inventory + Units Started and Completed +Normal Spoilage--Discrete-Materials +Normal Spoilage--Discrete-Conversion Equivalent Units of Production

(20,000 * 65%)

13,000 77,000 3,500 2,625

1.50 2.50 1.00 1.50

$ 25,000 19,500 192,500 3,500 3,938 $244,438

PTS: 1 DIF: Difficult OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 119. Refer to Crafton Corporation. What are equivalent units of production for material assuming weighted average is used? a. 107,000 b. 116,500 c. 120,000 d. 115,000

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38

ANS: C Materials: Weighted Average Beginning Work in Process + Units Started and Completed + Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

20,000 77,000 3,500 5,000 14,500

100% 100% 100% 100% 100%

20,000 77,000 3,500 5,000 14,500 120,000

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 120. Refer to Crafton Corporation. What are equivalent units of production for conversion costs assuming weighted average is used? a. 113,525 b. 114,400 c. 114,775 d. 115,650 ANS: A Conversion: Weighted Average Beginning Work in Process + Units Started and Completed +Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

20,000 77,000 3,500 5,000 14,500

100% 100% 75% 75% 70%

20,000 77,000 2,625 3,750 10,150 113,525

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 121. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned? Value a. b. c. d.

$7,438 $7,438 $8,750 $8,750

Assigned To Units transferred out and Ending Inventory Units transferred out Units transferred out and Ending Inventory Units transferred out

ANS: B

Equivalent Units 3,500 2,625


Total $3,500 3,938 $7,438

This amount is transferred out.


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39

122. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory? a. $29,725.00 b. $37,162.50 c. $38,475.00 d. $36,250.00 ANS: A Ending Inventory: Weighted Average Materials 14,500 Conversion (14,500 * 70%) 10,150 Total

$1.00 1.50

$

14,500.00 15,225.00 $ 29,725.00

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Knight Corporation Knight Corporation has the following information for the current month: Units started Beginning Work in Process: (30% complete) Normal spoilage (discrete) Abnormal spoilage Ending Work in Process: (75% complete) Transferred out Beginning Work in Process Costs: Material Conversion

95,000 15,000 3,000 4,000 15,000 88,000

units units units units units units

$18,000 14,000

All materials are added at the start of the production process. Knight Corporation inspects goods at 75 percent completion as to conversion. 123. Refer to Knight Corporation. What are equivalent units of production for material, assuming FIFO? a. 91,000 b. 92,000 c. 95,000 d. 110,000 ANS: C Materials: FIFO Beginning Work in Process + Units Started and Completed + Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

73,000 3,000 4,000 15,000

0% 100% 100% 100% 100%

73,000 3,000 4,000 15,000 95,000


Chapter 6

40

124. Refer to Knight Corporation. What are equivalent units of production for conversion costs, assuming FIFO? a. 97,750 b. 100,000 c. 101,750 d. 104,500 ANS: B Conversion: FIFO Beginning Work in Process + Units Started and Completed +Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

15,000 73,000 3,000 4,000 15,000

70% 100% 75% 75% 75%

10,500 73,000 2,250 3,000 11,250 100,000

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 125. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. What is the amount of the period cost for July using FIFO? a. $0 b. $12,750 c. $14,750 d. $17,000 ANS: C Abnormal spoilage is a period cost. Materials Conversion Costs Total Abnormal Spoilage

4,000 * $2.00/unit 3,000 * $2.25/unit

$ 8,000 6,750 $14,750

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 126. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest dollar)? a. $344,938 b. $365,875 c. $376,938 d. $378,625 ANS: C Transferred Out Units: FIFO Beginning Work in Process + Completion of Beginning Inventory + Units Started and Completed +Normal Spoilage--Discrete-Materials +Normal Spoilage--Discrete-Conversion Total Costs Assigned to Transferred Units

(15,000 * 70%)

(3,000 * 75%)

10,500 73,000 3,000 2,250

$2.25 4.25 2.00 2.25

$ 32,000 23,625 310,250 6,000 5,063 $376,938

PTS: 1 DIF: Difficult OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting

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41

127. Refer to Knight Corporation. What are equivalent units of production for material assuming weighted average is used? a. 105,500 b. 106,000 c. 107,000 d. 110,000 ANS: D Materials: Weighted Average Beginning Work in Process + Units Started and Completed + Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

15,000 73,000 3,000 4,000 15,000

100% 100% 100% 100% 100%

15,000 73,000 3,000 4,000 15,000 110,000

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 128. Refer to Knight Corporation. What are equivalent units of production for conversion costs assuming weighted average is used? a. 103,750 b. 104,500 c. 104,750 d. 105,500 ANS: B Conversion: Weighted Average Beginning Work in Process + Units Started and Completed +Normal Spoilage--Discrete + Abnormal Spoilage + Ending Work in Process Equivalent Units of Production

15,000 73,000 3,000 4,000 15,000

100% 100% 75% 75% 75%

15,000 73,000 2,250 3,000 11,250 104,500

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 129. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. What is the cost assigned to normal spoilage, using weighted average, and where is it assigned? Value a. b. c. d.

$11,063 $11,063 $12,750 $12,750

Assigned To Units transferred out and Ending Inventory Units transferred out Units transferred out and Ending Inventory Units transferred out

Chapter 6

42

ANS: B Equivalent Units 3,000 2,250


Total $6,000 5,063 $11,063

This amount is transferred out.

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 130. Refer to Knight Corporation. Assume that the costs per EUP for material and conversion are $2.00 and $2.25, respectively. Assuming that weighted average is used, what is the cost assigned to ending inventory? a. $55,312.50 b. $63,750.00 c. $66,375.00 d. $72,312.50 ANS: A Ending Inventory: Weighted Average Materials 15,000 Conversion (15,000 * 75%) 11,250 Total

$2.00 2.25

$

30,000.00 25,312.50 $ 55,312.50

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting Chapman Corporation The following information is available for Chapman Corporation for the current month: Started this month Beginning WIP (40% complete) Normal spoilage (discrete) Abnormal spoilage Ending WIP (70% complete) Transferred out Beginning Work in Process Costs: Material Conversion Current Costs: Material Conversion

80,000

units

7,500 1,100 900

units units units

13,000 72,500

units units

$10,400 13,800 $120,000 350,000

All materials are added at the start of production and the inspection point is at the end of the process.

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43

131. Refer to Chapman Corporation. What are equivalent units of production for material using FIFO? a. 80,000 b. 79,100 c. 78,900 d. 87,500 ANS: A Materials: FIFO Beginning Work in Process + Units Started and Completed + Ending Work in Process + Normal Spoilage (discrete) + Abnormal Spoilage Equivalent Units of Production

0% 100% 100% 100% 100%

65,000 13,000 1,100 900

65,000 13,000 1,100 900 80,000

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 132. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using FIFO? a. 79,700 b. 79,500 c. 81,100 d. 80,600 ANS: D % Complete

Conversion: FIFO

EUP

Units

Beginning Work in Process + Units Started and Completed + Ending Work in Process + Normal Spoilage (discrete) + Abnormal Spoilage Equivalent Units of Production

7,500 65,000 13,000 1,100 900

60% 100% 70% 100% 100%

4,500 65,000 9,100 1,100 900 80,600

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 133. Refer to Chapman Corporation. What are equivalent units of production for material using weighted average? a. 86,600 b. 87,500 c. 86,400 d. 85,500 ANS: B Materials: Weighted Average Beginning Work in Process + Units Started and Completed + Ending Work in Process + Normal Spoilage (discrete) + Abnormal Spoilage Equivalent Units of Production

Units

7,500 65,000 13,000 1,100 900

% Complete

100% 100% 100% 100% 100%

EUP

7,500 65,000 13,000 1,100 900 87,500

Chapter 6

44

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 134. Refer to Chapman Corporation. What are equivalent units of production for conversion costs using weighted average? a. 83,600 b. 82,700 c. 82,500 d. 81,600 ANS: A Conversion: FIFO Beginning Work in Process + Units Started and Completed + Ending Work in Process + Normal Spoilage (discrete) + Abnormal Spoilage Equivalent Units of Production

Units

% Complete

7,500 65,000 13,000 1,100 900

EUP

100% 100% 70% 100% 100%

7,500 65,000 9,100 1,100 900 83,600

PTS: 1 DIF: Easy OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 135. Refer to Chapman Corporation. What is cost per equivalent unit for material using FIFO? a. $1.63 b. $1.37 c. $1.50 d. $1.56 ANS: C FIFO: Materials Current Period

$ 120,000 $ 120,000 ÷ 80,000 units=

$

1.50 per unit

PTS: 1 DIF: Easy OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 136. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using FIFO? a. $4.00 b. $4.19 c. $4.34 d. $4.38 ANS: C FIFO: Conversion Current Period

$ 350,000 $ 350,000 ÷ 80,600 units = $ 4.34 per unit


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45

137. Refer to Chapman Corporation. What is cost per equivalent unit for material using weighted average? a. $1.49 b. $1.63 c. $1.56 d. $1.44 ANS: A Weighted Average: Materials Beginning Current Period

$ 10,400 120,000 130,400 ÷ 87,500 units =

$

1.49 /unit

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 138. Refer to Chapman Corporation. What is cost per equivalent unit for conversion costs using weighted average? a. $4.19 b. $4.41 c. $4.55 d. $4.35 ANS: D Weighted Average: Conversion Beginning Current Period

$ 13,800 350,000 363,800 ÷ 83,600 units = $4.35 per unit

PTS: 1 DIF: Easy OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 139. Refer to Chapman Corporation. What is the cost assigned to ending inventory using FIFO? a. $75,920 b. $58,994 c. $56,420 d. $53,144 ANS: B Ending Inventory: FIFO Materials Conversion (13,000 * 70%) Total

13,000 9,100

$ 1.50 4.34

$

19,500 39,494 $ 58,994

PTS: 1 DIF: Moderate OBJ: 6-4 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 140. Refer to Chapman Corporation. What is the cost assigned to abnormal spoilage using FIFO? a. $1,350 b. $3,906 c. $5,256 d. $6,424

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46

ANS: C Abnormal Spoiled Units 900

Price per Equivalent Unit $5.84 $5,256

Total

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 141. Refer to Chapman Corporation. What is the cost assigned to normal spoilage and how is it classified using weighted average? a. $6,193 allocated between WIP and Transferred Out b. $6,424 allocated between WIP and Transferred Out c. $6,193 assigned to loss account d. $6,424 assigned to units Transferred Out ANS: D Normal Spoiled Units 1,100

Price per Equivalent Unit Total $5.84 $6,424 Transferred Out

PTS: 1 DIF: Moderate OBJ: 6-8 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting 142. Refer to Chapman Corporation. What is the total cost assigned to goods transferred out using weighted average? a. $435,080 b. $429,824 c. $428,656 d. $423,400 ANS: B Goods Transferred Out/ Price per Eq Unit 73,600 $5.84

Total $429,824

PTS: 1 DIF: Difficult OBJ: 6-3 NAT: AACSB: Analytical Skills LOC: AICPA Functional Competencies: Measurement, Reporting

361 Chapter 6 MC Solutions

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