Process CostingChapter Four Connect Quiz

Question One• Which of the following companies would be most likely to use a process

costing system?• Oil Refinery

Question Two• The following information relates to the Blending Department of Kedakai

Products Corporation for the month of May. Kedakai uses a weighted-average process costing system.

• What are the Blending Department’s equivalent units related to materials for May?

• 307000Work in process, beginning (May 1):Units in Process 30000Percent Complete with respect to materials 100%Percent complete with respect to conversion 10%Units completed and transferred out during May

290000

Work in process, ending (May 31):Units in process 17000Percent complete with respect to materials 100%Percent complete with respect to conversion 80%

Work for Question Two• Equivalent units= units transferred to the next department+ equivalent units

in ending Work in Process inventory• Units transferred for materials= 290000 (see chart)• Equivalent units in ending WIP= 17000 (17000*100%)• 290000+17000= 307000

Question Three• Hache Corporation uses the weighted-average method in its process costing

system. Data concerning the first processing department for the most recent month are listed below. What are the equivalent units for materials for the month in the first processing department?

• 5150 Beginning Work in Process Inventory:Units in beginning work in process inventory 700Material costs $8000Conversion costs $7800Percent complete with respect to materials 50%Percent complete with respect to conversion 35%Units started into production during the month 5200Units transferred to the next department during the month 4400Materials cost added during the month $90300Conversion costs added during the month $125600Ending work in process inventoryUnits in ending work in process inventory 1500Percent complete with respect to materials 50%Percent complete with respect to conversion 30%

Work for Question Three• Equivalent units= units transferred to the next department+ equivalent units

in ending Work in Process inventory• Units transferred= 4400 (see chart)• Ending units in WIP inventory= 750 (1500*50%)• 440+750= 5150

Question Four• Fulton Corporation uses the weighted-average method in its process costing

system. This month, the beginning inventory in the first processing department consisted of 800 units. The cost and percentage completion of these units in beginning inventory were:

• A total of 9900 units were started and 8900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Costs Percent CompleteMaterial costs $7800 65%Conversion costs $7600 35%

Materials Cost $128600Conversion costs $220800

• The ending inventory was 70% complete with respect to materials and 60% complete with respect to conversion costs.

• The total cost transferred form the first processing department to the next processing department during the month is closest to:

• $323168

Work for Question Four• Total Cost transferred= (units transferred to next department)(Cost per

equivalent unit)• Cost per equivalent unit= (total cost)/(Equivalent units of production?• Total cost= cost of beginning WIP inventory+ Costs added during the period• Equivalent units of production= units transferred to next department+ ending

WIP inventory• End WIP inventory= • Beg inventory+ Started/Transferred In Inventory= Ending Inventory+ Transferred Out • Plug in numbers and solve for ending inventory

Materials Conversion TotalUnits completed and transferred out:Units transferred to next department (A)

8900 8900

Cost of beginning WIP inventory 7800 7600Cost added during period 128600 220800Total cost (a) 136400 228400Units transferred to next department 8900 8900End WIP Inventory (* 1800)Materials: (1800*70%) 1260Conversion: (1800*60%) 1080Equivalent Units of Production (b) 10160 9980Cost per Equivalent Units (a/b) (B) $13.425 $22.88577Cost of units transferred out (A*B) 119484.252 203683.3667Total $323167.618

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Question Five• Ibarra Corporation uses the weighted average method in its process costing

system. Data concerning the first processing department for the most recent month are listed below. The cost per equivalent unit for materials for the month in the first processing department is closest to:

• $13.20 Beginning Work in Process Inventory:Units in beginning work in process inventory 800Material costs $7700Conversion costs $3500Percent complete with respect to materials 60%Percent complete with respect to conversion 10%Units started into production during the month 7800Units transferred to the next department during the month 6800Materials cost added during the month $101100Conversion costs added during the month $271100Ending work in process inventoryUnits in ending work in process inventory 1800Percent complete with respect to materials 80%Percent complete with respect to conversion 15%

Work for Question Five • Cost per Equivalent Unit= (cost of beginning WIP inventory+ cost added

during period)/ Equivalent units of production• Equivalent Units of Production= units transferred to next department+

Equivalent units in ending WIP inventory• EU of production= 6800+ (1800*80%)= 8240• Cost per EU= (7700+101100)/8240• $13.20

Question Six• Valley Manufacturing Corporation’s beginning work in process inventory

consisted of 10000 units, 100% complete with respect to materials cost and 40% complete with respect to conversion costs. The total cost in the beginning inventory was $30000. During the month, 50000 units were transferred out. The equivalent unit cost was computed to be $2.00 for materials and $3.70 for conversion costs under the weighted-average method. Given this information, the total cost of the units complete and transferred out was:

• $285000

Work for Question Six• Total cost of units completed and transferred out= equivalent unit cost * units

transferred out• Materials cost of units transferred out= (2*50000)= 100000• Conversion cost of units transferred out= (3.7*50000)= 185000• 100000+185000= 285000

Question Seven• Cameron Corporation uses the weighted-average method in its process

costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The cost and percentage completion of these units in beginning inventory were:

• A total of 7900 units were started and 6900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Costs Percent CompleteMaterial costs $16400 85%Conversion costs $9200 60%

Materials costs $171500Conversion costs $137100

• The ending inventory was 70% complete with respect to materials and 35% complete with respect to conversion costs.

• The cost per equivalent unit for materials for the month in the first processing department is closest to:

• $23.23

Work for Question Seven• Cost per equivalent unit= total costs/equivalent units of production• Total cost= cost of beginning WIP inventory+ costs added during the period• Equivalent units of production= units transferred to next department+ ending

WIP inventory

• Total cost= 16400+171500= 187900• Ending WIP inventory= 1700*70%= 1190• Equivalent units of production= 6900+ 1190= 8090• Cost per equivalent unit= 187900/8090= $23.23

Question Eight• Acklac Corporation uses the weighted-average method in its process costing

system. This month, the beginning inventory in the first processing department consisted of 700 units. The cost and percentage completion of these units in beginning inventory were:

• A total of 9200 units were started and 8300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Costs Percent CompleteMaterial costs $12000 65%Conversion costs $2000 10%

Materials Cost $200800Conversion costs $225500

• The ending inventory was 705% complete with respect to materials and 15% complete with respect to conversion costs.

• The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:

• $33273

Work for Question Eight• Cost of ending WIP inventory= ending WIP inventory * cost per equivalent

units of production• Ending WIP inventory= units in ending WIP inventory * percentage complete• Cost per equivalent unit= total costs/ equivalent units of production• Total costs= costs of beginning WIP inventory+ costs added• Equivalent Units of Production= units transferred to next department+ Ending

WIP iventory • End WIP inventory= • Beg inventory+ Started/Transferred In Inventory= Ending Inventory+ Transferred Out • Plug in numbers and solve for ending inventory

Materials Conversion TotalEnding Work in process inventory:Equivalent Units of Production1600* 75% 12001600 * 15% 240Cost per Equivalent Unit:Cost of beginning WIP inventroy 12000 2000Costs added 200800 225500Total Costs 212800 227500Equivalent Units of Production:Units transferred to next department 8200 8300Ending WIP inventory 1200 240Equivalent Units of Production 9500 8540Cost per Equivalent Production: 212800/9500 22.4227500/8540 26.639Cost of Ending WIP Inventory: 26880 6393.443 33273.44262

Question Nine• Pulo Corporation uses a weighted-average process costing system. The

company has two processing departments. Production starts in the Assembly Department and is completed in the Finishing Department. The units complete and transferred out of the Assembly department during April will become the:

• Units started in production in Finishing for April

Question Ten• Guo Corporation uses the weighted-average method in its process costing

system. This month, the beginning inventory in the first processing department consisted of 500 units. The cost and percentage completion of these units in beginning inventory were:

• A total of 9700 units were started and 9100 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Costs Percent CompleteMaterial costs $7300 55%Conversion costs $2100 10%

Materials Cost $237800Conversion costs $376400

• The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.

• What are the equivalent units for materials for the month in the first processing department?

• 10035

Work for Question Ten• Equivalent Units= units transferred to next department+ units in ending work

in process inventory• Units transferred to next department= 9100• Units in ending work in process inventory= 935• 1100*85%

• 9100+935= 10035