Accounting 650 quiz week2_solution | Accounting homework help

1. Cosby uses a weighted-average process-costing system. All materials are added at the beginning of the process; conversion costs are incurred evenly throughout production. The company finished 40,000 units during the period and had 15,000 units in progress at year-end, the latter at the 40% stage of completion. Total material costs amounted to $220,000; conversion costs were $414,000.

The cost of goods completed is:

$312,000.

$414,000.

$520,000.

$634,000.

some other amount

2. Kentucky Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?

Materials, 40%; conversion cost, 40%.
Materials, 40%; conversion cost, 100%.
Materials, 100%; conversion cost, 40%.
Materials, 100%; conversion cost, 60%.
Materials, 100%; conversion cost, 100%.

3. When calculating unit costs under the weighted-average process-costing method, the unit cost is based on:

only the current period’s manufacturing costs.
only costs in the period’s beginning work-in-process inventory.
a summation of the costs in the beginning work-in-process inventory plus costs incurred in the current period.
only costs incurred in previous accounting periods.
a summation of the costs in the beginning work-in-process inventory plus costs to be incurred in the upcoming period.

4. Hamilton, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hamilton should make a journal entry on December 31 that includes:

a debit to Cost of Goods Sold for $432,000.
a credit to Finished-Goods Inventory for $432,000.
a credit to Work-in-Process Inventory for $432,000.
a debit to Finished-Goods Inventory for $86,000.
a credit to Work-in-Process Inventory for $86,000.

5. In a process-costing system, manufacturing costs are accumulated by:

batch.
batch and time period.
department.
department and time period.
department or process, and time period.

6. Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 40,000 units during the month and had 10,000 units in process at month-end, 20% complete. Conversion costs associated with the beginning work-in-process inventory amounted to $231,000, and amounts that relate to the current month totaled $966,000. If conversion is incurred uniformly throughout manufacturing, Peach’s equivalent-unit cost is:

$23.00.
$23.94.
$24.15.
$28.50.
some other amount.

7. Process costing would likely be used in all of the following industries except:

petroleum refining.
chemicals.
truck tire manufacturing.
wood pulp production.
automobile repair.

8. Unit costs in a process-costing system are derived by using:

in-process units.
completed units.
physical units.
equivalent units.
a measure of activity other than those listed above.

9. Muhares, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company’s accounting records:

Total equivalent units of materials: 8,000

Total equivalent units of conversion: 7,400

Units started and completed during the period: 6,500

On the basis of this information, the ending work-in-process inventory’s stage of completion is:

80%.

70%.

60%.

40%.

some other percentage not listed above.

10. Cosby uses a weighted-average process-costing system. All materials are added at the beginning of the process; conversion costs are incurred evenly throughout production. The company finished 40,000 units during the period and had 15,000 units in progress at year-end, the latter at the 40% stage of completion. Total material costs amounted to $220,000; conversion costs were $414,000.

The cost of the ending work in process is:

$54,000.

$78,000.

$114,000.

$195,000.

some other amount.

11. Process costing is used to account for:

large numbers of identical products that are produced in a continuous manufacturing environment.
small numbers of products that are produced in batches.
raw materials that are converted directly to finished goods.
finished goods that are refined and processed further.
large numbers of products that are produced in a non-repetitive process.

12. Michaella, Inc. uses a process-costing system. A newly-hired accountant identified the following procedures that must be performed by the close of business on Friday:

1—Calculation of equivalent units

2—Analysis of physical flows of units

3—Assignment of costs to completed units and units still in process

4—Calculation of unit costs

Which of the following choices correctly expresses the proper order of the preceding tasks?

1, 2, 3, 4.

1, 2, 4, 3.

1, 4, 3, 2.

2, 1, 4, 3.

2, 1, 3, 4.

13. Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs are incurred evenly throughout the process. The company’s beginning and ending work-in-process inventories totaled 10,000 units and 15,000 units, respectively, with the latter units being 2/3 complete at the end of the period. Universal started 30,000 units into production and completed 25,000 units. Manufacturing costs follow.

Beginning work in process: Materials, $60,000; conversion cost, $150,000
Current costs: Materials, $180,000; conversion cost, $480,000
Universal’s equivalent-unit cost for conversion cost is:
$13.71.
$18.00.
$21.00.
$25.20.
some other amount.

14. Fiero Corporation adds all materials at the beginning of production and incurs conversion cost evenly throughout manufacturing. The company completed 70,000 units during the year and had 12,000 units in process at year end, 20% complete with respect to conversion cost. Equivalent units for the year total:

materials, 70,000; conversion, 70,000.
materials, 70,000; conversion, 2,400.
materials, 72,400; conversion, 72,400.
materials, 82,000; conversion, 72,400.
materials, 82,000; conversion, 82,000.

15. Barrett Corporation had 6,500 units of work in process on April 1. During April, 19,100 units were completed and as of April 30, 5,100 units remained in production. How many units were started during April?

11,600.
17,700.
20,500.
30,700.
None of these.

16. Which of the following statements is false?

In job-order costing, costs are accumulated by job order.
In process costing, costs are accumulated by department.
In process costing, the cost per unit in a department is found by spreading the period’s manufacturing costs over the production activity.
In process costing, the total cost of each unit is found by dividing the total factory costs by the number of units completed.
In job-order costing, the unit cost is found by dividing the job’s total cost by the job’s total units.

17. Which of the following statements about similarities between process costing and job-order costing are true?

I. Both systems assign production costs to units of output.

II. Both systems require extensive knowledge of financial accounting.

III. The flow of costs through the manufacturing accounts is essentially the same.

I only.

I and III.

II and III.

III only.

I, II, and III.

18. Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs are incurred evenly throughout the process. The company’s beginning and ending work-in-process inventories totaled 10,000 units and 15,000 units, respectively, with the latter units being 2/3 complete at the end of the period. Universal started 30,000 units into production and completed 25,000 units. Manufacturing costs follow.

Beginning work in process: Materials, $60,000; conversion cost, $150,000

Current costs: Materials, $180,000; conversion cost, $480,000

Universal’s equivalent-unit cost for materials is:

$4.50.

$6.00.

$8.00.

$9.60.

some other amount.

19. Companies that use a process-cost accounting system would:

establish a separate Work-in-Process Inventory account for each manufacturing department.
establish a separate Finished-Goods Inventory account for each manufacturing department.
pass completed production directly to Cost of Goods Sold.
charge goods produced with actual overhead amounts rather than applied overhead amounts.
eliminate the need for the Finished-Goods Inventory account.

1. Aglow Company uses a process-cost system for its single product. Material A is added at the beginning of the process; in contrast, material B is added when the units are 50% complete. The firm’s ending work-in-process inventory consists of 4,000 units that are 75% complete. Which of the following correctly expresses the equivalent units of production with respect to materials A and B in the ending work-in-process inventory?

A, 3,000; B, 0.
A, 3,000; B, 3,000.
A, 4,000; B, 0.
A, 4,000; B, 4,000.
A, 4,000; B, 3,000.