Chapter 18 Quiz

1100 units Number of units completed and transferred out = 320 units + 900 units - 120 units = 1100 units

Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for Department A for February 2020 are: ​Work in process, beginning inventory, 40% converted320 unitsUnits started during February900 unitsWork in process, ending inventory120 units​​ Costs for Department A for February 2020 are:​Work in process, beginning inventory:​Direct materials$160,000​Conversion costs$203,000​Direct materials costs added during February$601,000​Conversion costs added during February$427,000​ How many units were completed and transferred out of Department A during February?

$1962 Direct materials per unit ($155,000/ 310 units) $500 ​Conversion costs per unit ($204,000 / 310 × 0.45) units) 1462​ Total costs per unit$1962​

Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for Department A for February 2020 are: ​Work in process, beginning inventory, 45% converted 310 units Units started during February 820 units Work in process, ending inventory300 units ​​Costs for Department A for February 2020 are:​ Work in process, beginning inventory:​Direct materials$155,000 ​Conversion costs$204,000 ​Direct materials costs added during February$604,000​Conversion costs added during February$434,000​ What is the unit cost per equivalent unit of beginning inventory in Department A? (Round the final answer to the nearest whole dollar.) $962 $1962 $500 $2200

11,375 Number of equivalent units in beginning inventory = 2500 × 0.75 = 1875 unitsUnits started and completed during October = 11,500 - 2500 = 9000 unitsNumber of equivalent units in ending inventory = 1000 × 50% = 500 unitsTotal equivalent units = 1875 + 9000 + 500 = 11,375 units

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,500 models, and transferred them to the Distribution Department. The company ended the month with 1000 models in ending inventory. There were 2500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs. Beginning inventory: Direct materials$20,100 ​Conversion costs$11,100​ Manufacturing costs added during the accounting period: Direct materials$70,300​ Conversion costs$240,600​ What were the equivalent units for conversion costs during October? 8500 9250 11,750 11,375

$45,061 Number of units started and completed during October = 11,700 units - 3500 units (ending inventory) = 8200 units Number of equivalent units in beginning inventory = 2625 equivalent units (3500 × 0.75)Total of equivalent units = 2625 units + 8200 units + 1430 units = 12,255 units Direct material cost per unit = $70,600 / 10,800 units = $6.54 Conversion cost per unit = $240,500 / 12,255 = $19.62Work in process, ending Direct material 2600 × $6.54 =$17,004Conversion costs = 2600 × 0.55 × $19.62 = $28,057 Total cost of work in process, ending = $45,061

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,800 models. During the month, the company completed 11,700 models, and transferred them to the Distribution Department. The company ended the month with 2600 models in ending inventory. There were 3500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs. Beginning inventory: Direct materials$19,600 ​Conversion costs$11,200​ Manufacturing costs added during the accounting period: Direct materials$70,600​ Conversion costs$240,500​ What is the cost assigned to ending inventory during October? (Round intermediary calculations to the nearest cent.) $57,898 $45,061 $41,138 $53,444

when costs are introduced into the process

Process-costing systems separate costs into cost categories according to: cost behavior (fixed versus variable) when costs are introduced into the process the specific job being worked on customer being served

$50 Total cost per unit = $130,000 / 2600 = $50

Vital Industries manufactured 2600 units of its product Huge in the month of April. It incurred a total cost of $130,000 during the month. Out of this $130,000, $46,000 comprised of direct materials used in the product and the rest was incurred because of the conversion cost involved in the process. Ryan had no opening or closing inventory. What will be the total cost per unit of the product, assuming conversion costs contained $10,400 of indirect labor? $45 $32 $35 $50

$140 Total cost per unit = [($106,000 + $11,600) / 840] = $140

Serile Pharma places 840 units in production during the month of January. All 840 units are completed during the month. It had no opening inventory. Direct material costs added during January was $106,000 and conversion costs added during January was $11,600. What is the total cost per unit of the product produced during January? $80 $126 $140 $10

1190 units; 1110 units Completed and transferred out: (360 + 830 - 200) Direct materials- 990 Conversion costs-​990 ​Work in process, ending: Direct materials-200​ Conversion costs-120 ​Total equivalent units: Direct materials- 1190 Conversion costs- ​1110

Shiffon Electronics manufactures music players. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing.The following information is available for the month of March 2020 for the Assembly department. Work in process, beginning inventory360 unitsConversion costs (30% complete)​Units started during March830 unitsWork in process, ending inventory:200 unitsConversion costs (60% complete)​ The cost details for the month of March are as follows: Work in process, beginning inventory​Direct materials$346,000​Conversion costs$366,500​Direct materials costs added during March$708,500​Conversion costs added during March$1,120,000​ What are the equivalent units for direct materials and conversion costs, respectively, for March? 990 units, 1110 units 1190 units, 1110 units 1190 units, 1190 units 1110 units, 1190 units

$138,240 Completed and transferred out (380 +840 - 160) Direct materials- 1060 Conversion costs-​1060 ​Work in process, ending Direct materials-160​ Conversion costs-96 ​Total equivalent units Direct materials- 1120 Conversion costs- ​1156

Shiffon Electronics manufactures music players. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing.The following information is available for the month of March 2020 for the Assembly department. Work in process, beginning inventory380 units Conversion costs (35% complete)​ Units started during March 840 units Work in process, ending inventory:160 units Conversion costs (60% complete)​ The cost details for the month of March are as follows: Work in process, beginning inventory ​Direct materials$347,000 ​Conversion costs$362,500 ​Direct materials costs added during March$707,000​Conversion costs added during March$1,123,500​ What amount of direct materials costs is assigned to the ending Work-in-Process account for March?(Round intermediary calculations to the nearest whole dollar.) 98,201 $45,508 $92,721 $138,240

Work in Process—Molding$201,600 Accounts Payable Control$201,600 720 kg × $280 = $201,600

Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 720 kgs of tungsten carbide at $280 per kg. It started manufacture of 4200 vases and completed and transferred 3200 vases during the month. It has 1000 vases in the process at the end of the month. It incurred direct labor charges of $1700 and other manufacturing costs of $1200, which included electricity costs of $500. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 55% complete in respect of conversion costs. Which of the following journal entry would record the tungsten carbide purchased and used in production during July? -Work in Process—Molding$201,600 Accounts Payable Control$201,600 -Work in Process—Molding$2200 Accounts Payable Control $2200 -Accounts Payable Control$2200 Work in Process—Molding $2200 -Accounts Payable Control$201,600 Work in Process—Molding$201,600

Work in Process—Molding$1000 Wages Payable Control$1000

Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 650 kgs of tungsten carbide at $210 per kg. It started manufacture of 3500 vases and completed and transferred 3200 vases during the month. It has 300 vases in the process at the end of the month. It incurred direct labor charges of $1000 and other manufacturing costs of $600, which included electricity costs of $900. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 55% complete in respect of conversion costs. Which of the following journal entries would be correct to record direct labor for July? Work in Process—Molding $1000 Work in Process—Finishing $1000 Work in Process—Molding $136,500 Accounts Payable Control $136,500 Work in Process—Molding $1000 Overhead Control $1000 Work in Process—Molding $1000 Wages Payable Control $1000

the equivalent units completed during the current period plus the equivalent units in ending inventory

The weighted-average process-costing method calculates the equivalent units by: -the units started during the current period minus the units in ending inventory -the units started during the current period plus the units in ending inventory -considering only the work done during the current period -the equivalent units completed during the current period plus the equivalent units in ending inventory

$74,068.83 Completed and transferred out (350 + 1040 - 220) Direct materials- 1170 Conversion costs-​1170 ​Work in process, ending Direct materials-220​ Conversion costs-187.0​Total equivalent units Direct materials- 1390.0 Conversion costs- ​1357.0​ Conversion cost per equivalent unit = $537,500 / 1357.0 = $396.09 Equivalent units in ending inventory = 220 × 85% = 187.0 equivalent units Conversion cost to be assigned to ending Work-in-Process account = 187.0 × $396.09 = $74,068.83

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. Data for the Assembly Department for June 2020 are:​Work in process, beginning inventory 350 units Direct materials (100% complete)​ Conversion costs (50% complete)​​​ Units started in June 1040 units Work in process, ending inventory:220 units Direct materials (100% complete)​ Conversion costs (85% complete) ​​​Costs for June 2020: Work in process, beginning inventory: ​Direct materials$90,000 ​Conversion costs$137,000 ​Direct materials costs added during June$603,000​Conversion costs added during June$400,500​ What amount of conversion costs is assigned to the ending Work-in-Process account for June? (Round any intermediary calculations to the nearest cent.) $315.74 $103,013.51 $400,500.00 $74,068.83

$109,200 Completed and transferred out (380 + 960 - 210) Direct materials- 1130, Conversion costs-​1130​ Work in process, ending Direct materials- 210​, Conversion costs- 157.5​Total equivalent units Direct materials-1340.0​ Conversion costs-1287.5​ Direct material cost per equivalent unit = [($604,000 + $92,500) / 1340.0] = $520 Equivalent units in ending inventory = 210 units Direct materials cost to be assigned to ending Work-in-Process account = $520 × 210 = $109,200

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. Data for the Assembly Department for June 2020 are:​Work in process, beginning inventory380 units Direct materials (100% complete)​ Conversion costs (60% complete)​ ​​Units started in June 960 units Work in process, ending inventory:210 units Direct materials (100% complete)​ Conversion costs (75% complete) ​​​Costs for June 2020:​ Work in process, beginning inventory:​ Direct materials$92,500​ Conversion costs$136,500​ Direct materials costs added during June$604,000​Conversion costs added during June$402,500​ What amount of direct materials costs is assigned to the ending Work-in-Process account for June?(Round intermediary calculations to the nearest whole dollar.) $116,115 $64,957 $109,200 $79,492

$1,002,500 The total amount debited to the Work-in-Process account during the month of June = $600,500 + $402,000 = $1,002,500

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. Data for the Assembly Department for June 2020 are:​Work in process, beginning inventory300 unitsDirect materials (100% complete)​Conversion costs (55% complete)​​​ Units started in June 1010 units Work in process, ending inventory:220 units Direct materials (100% complete)​ Conversion costs (75% complete) ​​​Costs for June 2020:​ Work in process, beginning inventory:​ Direct materials$93,500​ Conversion costs$140,000 ​Direct materials costs added during June$600,500​Conversion costs added during June$402,000​ What is the total amount debited to the Work-in-Process account during the month of June? $1,002,500 $1,142,500 $233,500 $1,236,000

1250 units, 1195 units Completed and transferred out (300 + 950 - 220) Direct materials- 1030.0 Conversion costs- ​1030.0​ Work in process, ending220.0 Conversion costs ​165.0​ Total equivalent units direct materials- 1250 conversion costs-​1195​

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted-average costing. Data for the Assembly Department for June 2020 are:​Work in process, beginning inventory300 unitsDirect materials (100% complete)​Conversion costs (55% complete)​​​Units started in June950 unitsWork in process, ending inventory:220 unitsDirect materials (100% complete)​Conversion costs (75% complete)​​​Costs for June 2020:​Work in process, beginning inventory:​Direct materials$93,000​Conversion costs$139,500​Direct materials costs added during June$602,000​Conversion costs added during June$400,000​ What are the equivalent units for direct materials and conversion costs, respectively, for June? (Round final answers to the nearest unit.) 1098 units; 979 units 1170 units; 1170 units 1250 units; 953 units 1250 units; 1195 units

a separate direct material added at the beginning of the process

Transferred-in costs are treated as if they are: costs of beginning inventory added at the beginning of the process a separate direct material added at the beginning of the process direct labor costs added at the beginning of the process conversion costs added at the beginning of the process

These costs are incurred in previous departments that are carried forward to subsequent departments.

Which of the following best describes transferred-in costs in process costing? -These costs are incurred in transferring raw materials and labor from the place of availability to the factory. -These costs cannot be controlled by an organization as they are transferred to the organization from the market participants. -These costs are incurred in previous departments that are carried forward to subsequent departments. -These costs are transferred in to the company by an external vendor.

Dental Bright Inc., a company manufacturing and selling toothpaste on a large scale

Which of the following companies is most likely to use process costing? Grimpy Corp., a company manufacturing furniture for customers as per their requirements Crimpson Color, a company selling customized garments for niche customers Effel & Associates, a consulting firm providing various audit and related services Dental Bright Inc., a company manufacturing and selling toothpaste on a large scale

In a process-costing system, each unit uses approximately the same amount of resources.

Which of the following statements is true? In a process-costing system, each unit uses approximately the same amount of resources. In a job-costing system, overheads are allocated to all units equally. In a process-costing system, individual jobs use different quantities of production resources. In a job-costing system, average production cost is calculated for all units produced.