1.

From the industries listed below, which one is most likely to use process costing
in accounting for production costs?
 
Group of answer choices
Road builder.
Automobile repair shop.
Newspaper publisher.
Electrical contractor.

2. Which of the following is a characteristic of a process costing system?

 
Group of answer choices
Work-in-process inventory is restated in terms of completed units.
Costs are accumulated by order.
It is used by a company manufacturing custom machinery.
Standard costs are not applicable.

3. Pure Spring Water Co. bottles spring water. The spring water first undergoes
filtration in Department 1 and is eventually bottled in Department 2. A quantity
schedule for May 2011 follows:

Department 1:   Department 2:  

Units started in process …… 110,00 Units received from Department 1  80,000

Units transferred to Dept. 2 80,000 Units transferred to finished stock …. 61,400

Units in process, end ........... 30,000 Units in process, end …………… 18,600

 
Units in process at the end of both departments are 72%. In Department 2, what is the
equivalent production for conversion cost?
 
Group of answer choices
74,792
61,400
68,929
80,000

4. The following information is available for K Co. for June:

Started this month 80,000 units

Beginning WIP (40% complete) 7,500 units

Normal spoilage (discrete) 1,100 units

Abnormal spoilage 900 units

Ending WIP (70% complete) 13,000 units

Transferred out 72,500 units

Beginning Work in Process Costs:  

    Material P10,400

    Conversion 13,800

Current Costs:  

     Material P120,000

     Conversion 350,000

 
(1) What is the cost assigned to ending inventory using FIFO? (2) What is the cost
assigned to normal spoilage and how is it classified using weighted average?
 
Group of answer choices
(1) P 58,994; (2) P 6,193 assigned to Transferred Out
(1) P 58,994; (2) P 6,424 assigned to units Transferred Out
(1) P 56,420; (2) P 6,193 allocated between WIP and Transferred Out
(1) P 75,920; (2) P 6,424 assigned to units Transferred Out

5. An equivalent unit of material or conversion cost is equal to

The amount of material or conversion cost necessary to complete one unit of production.
A unit of work-in-process inventory.
Fifty percent of the material or conversion cost of a unit of finished goods inventory (assuming a
linear production pattern)
The amount of material or conversion cost necessary to start a unit of production in work-in-
process.

6. When will the equivalent unit of production under FIFO Process be the same with
the equivalent unit of production under Average FIFO?
 
Group of answer choices
When the excess of the actual units started over the actual units completed is equal to
the ending work in process inventory.
When there is no completed inventory during the period.
When the actual units completed is higher than the actual units started.
When there is no ending work in process inventory.

7. The following data for the month of September were taken from the cost records
of Department I of Pro-life Products which uses process costing system:
 
Opening inventory of work-in-process:
Units - 500 (with all materials added and 50% of labor and overhead)
Cost - Materials.……………………………………………………………………         2,400
Labor ……………………………………………………………………….         1,500
Factory overhead ……………………………………………………....             760
 
Put into production:
Units - 5,000
Costs – Materials ………………………………………………………………  .           P25,100
Labor ................................................................................................ 19,380
Factory overhead ………………………………………………………             14,900
 
Completed and transferred - 4,800 units
Ending inventory of work-in-process:
Units - 700 (with all materials, and 60% of labor and overhead)
 
The cost per equivalent unit, order (rounded to nearest centavo):

  FIFO  Average    FIFO  Average 

a. P11.92 P11.92 c. P12.00 P12.00

b. 12.00 11.92 d. 11.92 12.00

Group of answer choices

C
A
B
D

8. A company produces white paint in bulk. On May 1, the mixing department,

which has used a weighted-average process costing system, had 12,000
unfinished gallons of paint in process approximately 50% complete with regard to
conversion costs. Materials are added at the beginning of the process and yield a
gallon of paint for each gallon of materials added to the process. During the
month of May, 100,000 gallons of material were added and 10,000 gallons, 80%
complete with regard to conversion, were in process at the end of May. What is
the difference in material and conversion equivalent units, respectively, incurred
during May if the first-in, first-out process costing method is employed, rather
than the weighted average method?

Difference in Difference in
  Material Equivalent Conversion Equivalent
Units in Units

a. No difference 6,000 increase

b. 6,000 decrease 6,000 increase

c. 6,000 increase 6,000 decrease

d. 12,000 decrease 6,000 decrease

Group of answer choices

C
B
D
A
9. Process cost accounting is the method to be used in assigning costs to products
 
Group of answer choices
Which are manufactured on the basis of each order received
Which are only partially completed
When standard cost accounting is not used
As an average cost per unit all units in process during the accounting period

10. Eastern Products Inc., Input all materials at the start of operations in Process 1.
The inventory is process at the beginning of January consisted of 4,000 units with
a total cost of materials of P100,000 and labor and overhead of P20,000. In
January, 20,000 units were started in process with material cost of P500,000.
Labor and overhead in January cost P280,000. As of end of January., the
inventory was 100% complete in materials but only 60% in labor and overhead.
The ending inventory consisted of 10,000 units. The equivalent units of labor and
overheard for
the month of January amounted to:
 
Group of answer choices
30,000
20,000
10,000
26,000

11. The following data for September were taken from the cost records of the Mixing
Department of Love Manufacturing Company, which uses average costing method:

Work in process, August 31:  

(all materials, 50% converted) 1,000 units

Put into process during the month of September 10,000 units

Work in process, September 30:  

(all materials, 60% converted) 1,400 units

Costs:  

Work in process, August 31:  

Materials P 24,000

Labor 15,000

Factory overhead 7,000

Put into process during September  

Materials 251,000

Labor 193,000

Factory overhead 149,000

 
The total cost of the units completed and transferred was:
Group of answer choices
P576,000
P640,400
P693,800
P605,400

12. The Maginoo Company manufactures a single product in a continuous process in

two departments.
Cost and production statistics for the month of March, 2011 are shown below:

Assembling Departmen
Costs: Finishing Department
t

         Work in process, March 1 ………… P9,750 P18,000

         Materials …………………………. 64,000 -

         Labor ……………………………… 47,250 85,800

         Factory overhead ………………. 31,500 47,200

 
Quantity:    

Units in process, March 1    

         (All materials: half converted) ……… 3,000 4,000

Units started in process …………………… 33,000 -

Units received from preceding department …   30,000

Units completed and transferred …………… 30,000 25,000

Units in process, March 31    

         (All materials: 60% converted) ……. 5,000 6,000

Lost during the process …………………… 1,000 3,000

 
Compute the total costs transferred:

Assembling Assembling
  Finishing Department   Finishing Department
Department Department

a. P135,000 P250,000 c. P135,000 P238,000

b. 152,500 286,00 d. 121,500 210,000

Group of answer choices

D
B
C
A

13. A company produces plastic drinking cups and uses a process cost system. Cups go
through three departments - mixing, molding, and packaging. During the month of June
the following information is known about the mixing department.
Work-in-process at June 1 …………………….

10,000 units

An average 3/4 complete

Units complete during June ………………….

140,000 units

Work-in-process at June 30 ……………………

20,000 units

An average 1/4 complete

Materials are added at two points in the process; Materials A is added at the beginning of the
process and Material B at the midpoint of the mixing process. Conversion costs are incurred
uniformly throughout the mixing process. Under a FIFO costing flow, the equivalent units for
Material A, Material B, and conversion costs respectively for the month of June (assuming no
spoilage) would be

Group of answer choices

150,000; 140,000; and 135,000

150,000; 130,000; and 137,500

160,000; 140,000; and 137,500

160,000; 130,000; and 135,000

14. In a process costing system, how is the unit cost affected in a production cost
report when materials are added in a department subsequent to the first
department and the added materials result in additional units?
 
Group of answer choices
The first department's unit cost is increased, but it does not necessitate an adjustment of
the transferred-in unit cost.
The first departments unit cost is increased, which necessitates an adjustment of the
transferred-in unit cost.
The first department's unit cost is decreased, but it does not necessitate an adjustment
of the transferred-in unit cost.
The first department's unit cost is decreased, which necessitates an adjustment of the
transferred-in unit cost.

15. Given for a certain process:

Beginning work in process, 2/5 completed ………. 500 units

Transferred in .......................................................... 2,000 units

Normal spoilage………………………………………. 200 units

Abnormal spoilage……………………………………. 300 units

Goods completed and transferred out ..................... 1,700 units

Ending work in process, 1/3 completed ……………. 300 units

Conversion costs in beginning inventory …………… P610

Current period conversion costs ……………………. P3,990

 
All spoilage occurs at the end of the process.
The conversion cost per equivalent unit amounted to:

  FIFO Method Average method

a. P1.90 P1.73

b. 2.19 2.19

c. 2.00 1.90
d. 1.90 2.00

Group of answer choices

C
A
D
B

16. The units transferred in from the first department to the second department
should be included in the computation of the equivalent units for the second
department under which of the following methods of process costing?

  FIFO Weighted Average

a. Yes Yes

b. Yes No

c. No Yes

d. No No

 
Group of answer choices
D
A
C
B

17. On April 1,2013, the Hari Company had 6,000 units of WIP in Department B, the
second and last stage of their production cycle. The costs attached to these 6,000
units were P12,000 of costs transferred in from Department A, P2,500 of material
cost added in department B and P2,000 of conversion cost added in Department
B. Materials are added in the beginning of the process in Department B.
Conversion was 50% complete on April 1,2013. During April, 14,000 units were
transferred in from Department A at a cost of P27,000; and a materials cost of
P3,500 and conversion costs of P3,000 were added in Department B. On April 30,
2011, Department B had 5,000 units were added in Department B. On April
30,2011 Department B had 5,000 units of WIP 60% complete as to conversion
costs. The costs attached to these 5,000 units were P 1 0,500 of costs transferred
in from Department A, P1,800 of material costs added in Department B and P800
of conversion costs added in Department B.
Using the weighted-average method, what are the unit costs?

  Transferred In Materials Conversion Cost

A P1.95 P.25 P.27

B P1.95 P.30 P.28

C P1.80 P.30 P.27

D P1.70 P.25 P.28

Group of answer choices

D
A
C
B

18. For the month just ended, the following data were generated by Mkulay
Corporation:

Physical Units:  

   Work-in-process, beginning inventory …………………. 4,000 gallons

   Direct materials, chemicals (? complete)  

   Direct materials, cans (0 complete)  

   Direct labor (25% complete)  

   Overhead (25% complete)  

Started during the month …………………………………… 21,000 gallons

Transferred to Shipping Department during the month 20,000 gallons

Work-in-process, ending inventory:  

    Direct materials, chemicals (100% complete)  

    Direct materials, cans (? complete)  

   Direct labor (80% complete)  

   Overhead (80% complete)  

Costs for the month:  

Work-in-process, beginning inventory:  

     Direct materials, chemicals ……………………………… P456,000

     Direct labor (P100 per hour) ……………………………. 62,500

     Overhead …………………………………………………. 18,750

This month’s costs added:  

     Direct materials, chemicals ……………………………… P2,284,000

     Direct materials, cans …………………………………… 70,000

     Direct labor (P100 per hour) …………………………… 350,000

     Overhead ………………………………………………… 105,000

 
The company manufacture high quality paints. Production begins with the blending of
various chemicals, which are added at the beginning of the process and ends with
canning of the paint. Canning occurs when the mixtures reaches the 90% stage of
completion. The gallon cans are then transferred to the Shipping Department for crating
and shipment. Direct labor and overhead are added continuously throughout the
process. Overhead is allocated on the basis of direct labor hours at the rate of P30 per
hour.
Using the weighted-average method, the cost per equivalent unit for:
 Direct Direct    
 
MaterialsChemicals MaterialsCans Labor Overhead

a. P109.60 P3.50 P17.1875 P5.15625

b. 91.36 3.50 14.5833 4.3750

c. 137.00 3.50 20.6250 6.1875

d. 114.20 2.80 17.5000 5.2500

Group of answer choices

C
B
A
D

19. Department I of Charity Manufacturing Company presents the following

production data for the month of May 2011:

Opening inventory, 3/8 completed…. 4,000 units

Started in process……… 13,000 units

Transferred……………... 9,000 units

Closing inventory, ½ completed……... 4,000 units

                              ¾ completed……... 4,000 units

 
What are the equivalent units of production for the month of May, 2011?

  FIFO Method Average Method   FIFO Method Average Method

a. 12,500 units 13,000 units c. 12,500 units 14,000 units

b. 17,000 units 12,500 units d. 15,000 units 14,000 units

Group of answer choices

D
C
B
A

20. When should process costing techniques be used in assigning costs to products?
 
Group of answer choices
When production is only partially completed during the accounting period.
If the product is manufactured on the basis of each order received.
Whenever standard costing techniques should not be used.
If the product is composed of mass-produced homogenous units.

21. Manuel Company uses process cost system with average costing to account for
the production of its only product The product is manufactured in two
departments. Units are started in Assembling Department, and then transferred to
the Finishing Department, where they are completed. Units are inspected at the
end of the production process in the Assembling Department, and the cost of
abnormal lost is charged to Factory Overhead Control account.
Data related to June operations in the Assembling Department are:
Quantity:
Units in beginning inventory (60% materials, 5% labor, and 25% overhead) 1,000
Units started in process this period 59,000
Units transferred to the Finishing Department this period 8,000
Units in ending inventory (100% materials, 75% labor, And 50% overhead) 1,500
Cost data:

  Beginning Inventory Added This Period

Costs charged to the Department:    

Materials P 1 ,260 P36,240

Direct labor 770 10,780

Factory overhead 1,400 21,725

 
What is the total cost transferred to the Finishing Department?
 
Group of answer choices
P58,000 or less
P59,452
P56, 752
P59,600

22. The Ilang-llang Corporation, engaged in a manufacturing business and using process
costing, gave the following production data for three different situations. Stages of
completion of the inventories apply to all cost elements.
(1) Started in process, 6,500 units; transferred, 5,500 units; in process, 400 units 50%
completed and 600 units 25% completed.
(2) Beginning inventory, 6,250 units 40% completed; started in process, 25,000 units;
transferred, 26,250 units; in process at the end, 3,000 units 50% completed and 2,000
units 25% completed.
(3) Beginning inventory, 6,000 units 30% completed; started in process. I3,000 units; lost
in processing, 500 units from production started this period (loss was normal and
occurred throughout the production process); transferred, 14,000 units; in process at the
end, 3,000 units 50% completed and 1,500 units 75% completed.
What are the equivalent production of the three different situations under FIFO and
average
costing?

  FIFO     Average    

  1 2 3 1 2 3

A 5,850 25,750 14,825 5,850 28,250 16,625

B 5,850 27,550 18,425 5,850 22,850 15,662

C 8,550 20,575 15,428 5,508 28,025 12,625

D 5,058 20,775 12,524 5,850 28,250 16,625

Group of answer choices

B
A
C
D

22. On September 30, work-in-process totaled 9,000 units 60% complete (based on
conversion costs added uniformly throughout the department and material added
at the start of the process). A total of 100,000 units were transferred to the next
department during October. On October 31, a total of 8,000 units 40% complete
(based on conversion costs) were still in process in Department A.
Using the weighted-average cost flow method, which of the following equivalent units
should be used in the calculation of costs for October?

Equivalent Units

  Transfer Costs Materials Conversion

a. 108,000 100,000 103,200

b. 108,000 100,000 100,000

c. 108,000 108,000 103,200

d. 109,000 101,000 104,200

Group of answer choices

B
A
D
C
 23. Roy Company manufactures Product X in a two-stage production cycle in
Departments A and B. Materials are added at the beginning of the process in
Department B. Conversion costs for Department B were 50% complete as to the
6,000 units in BWIP and 75% complete as to the 8,000 units in EWIP, 12,000
units were completed and transferred out of Department B during February. An
analysis of the costs relating to WIP and production activity in Department B for
February follows:

Transferred i Material Cost
  Conversion Costs
n Costs s

WIP, February 1:      

         Costs attached P12,000 P2,500 P1,000

Feb. activity:      

         Costs added …. P29,000 P5,000 P5,000

 
The total cost per unit transferred-out for February of Product X, rounded to the nearest
peso:

  FIFO  Average    FIFO  Average 

a. P2.77 P2.77 c. P2.77 P2.78

b. 2.78 2.77 d. 2.78 2.78

Group of answer choices

B
D
A
C

24. Samahan, Inc. manufactures a highly sensitive smoke alarm and uses the first-in,
first-out method for process costing and finished goods costing. In costing
finished goods, the unit cost for units completed from the work in process at the
beginning of the period is kept separate from the unit cost of those started and
 completed during the period. The total manufacturing costs for the month of June
is P264,000 and 2,750 units are completed during the month.
The inventories at the beginning of

June area    

Smoke alarms in process (8O% complete) 1,250 units P128,000

Smoke alarms on hand (complete) 600 units 76,800

The inventories at the end of June are:

   
 

Smoke alarms in process (50% complete) 500 units  

Smoke alms on hand (complete) 700 units  

 
How would the total costs accounted for be distributed?

  Work-in Process Finished Goods

A P33,000 P92,000

B P33,000 P79,000

C P32,000 P92,000

D P66,000 P52,000

Group of answer choices

D
B
C
A

25. A company employs a process costing system for its two-department

manufacturing operation using the first-in, first-out (FIFO) inventory method.
 When units are completed in Department 1, they are transferred to Department 2
for completion. Inspection takes place in Department 2 immediately before the
direct materials are added, when the process is 70% complete with respect to
conversion. The specific identification method is used to account for lost units.
The number of defective units (that is, those failing inspection) is usually below the
normal tolerance limit of 4% of units inspected. Defective units have minimal value, and
the company sells them without any further processing for whatever it can. Generally,
the amount collected equals, or slightly exceeds, the transportation cost. A summary of
the manufacturing activity for Department 2, in units for the current month, is presented
below:

  Physical Flow(output units)

Beginning inventory (60% complete with respect to

20,000
conversion)

Units transferred from Department 1 1 180,000

Total units to account for 200,000

Units completed in Department 2 during the month 170,000

Units found to be defective at inspection 5,000

Ending inventory (80% complete with respect to

25,000
conversion)

Total units accounted for 200,000

1. The equivalent units for direct materials for the current month would be: 
A. 175,000 units
B. 181,500 units
C. 193,000 units
D. P200,000 units
2. The units that failed inspection during the current month would be classified as: 
A. abnormal spoilage
B. normal scrap
C. normal rework units
D. normal waste

26. Materials are added at the start of the process in Cedar Company's blending
department, the first stage of the production cycle. The following information is
available for July:

  Units

Work-in-process, July 1 (60% complete  

           as to conversion costs) …………………. 60,000

Started in July ..................................................... 150,000

Transferred to the next department.   ………….. 110,000

Lost in production ... 30,000

Work-in-process, July 31 (50% complete  

           as to conversion costs) …………………. 70,000

1. Under Cedar's cost accounting system, the costs incurred on the lost units are
absorbed by the remaining good units. What are the equivalent units for the materials
unit cost calculation? 

  FIFO  Average    FIFO  Average 

a. 180,000 120,000 c. 180,000 210,000

b. 120,000 180,000 d. 140,000 210,000

 
2. what are the equivalent units for the conversion cost unit calculation? 
  FIFO  Average    FIFO  Average 

a. 145,000 109,000 c. 139,000 175,000

b. 109,000 145,000 d. 109,000 175,000

27. The Wiring Department is the second stage of Flem Company's production cycle.
On May 1, the BWIP contained 25,000 units which were 60% complete as to
conversion costs. During May, 100,000 units, were transferred-in from the first
stage of Flem's production cycle. On May 31, EWIP contained 20,000 units which
were 80% complete as to conversion costs. Materials added at the end of the
process. Using the weighted average method,
1. the EUP on May 31 were: 

  Transferred-in Costs Materials Conversion Costs

a. 100,000 125,000 100,000

b. 125,000 105,000 105,000

c. 125,000 105,000 121,000

d. 125,000 125,000 121,000

 
2. If 100 units are 70% complete, 30 units 60% complete, 200 units 40% complete, and
60 units 5% complete, how many EUP have been produced? 
A. 70 
B. 171
C. 175
D. 390
28. Collins Company, which, on April 1, had 6,000 units of WIP in Department B, the
second and last stage of its production cycle. The costs attached to these 6,000
units were P12,000 of costs transferred in from Department A, P2,500 of material
costs added in Department B, and P2,000 of conversion costs added in
 Department B. Materials are added at the beginning of the process in Department
B. Conversion was 50% complete on April 1. During April, 14,000 units were
transferred in from Department A at a cost of P27,000, and material costs of
P3,500 and conversion costs of P3,000 were added in Department B. On April 30,
Department B had 5,000 units of WIP, 60% complete as to conversion costs. The
costs attached to these 5,000 units were P10,500 of costs transferred in from
Department A, P1,800 of material costs added in Department B, and P800 of
conversion costs added in Department B.
1. Using the weighted average method, what were the equivalent units for the month of
April? 

  Transferred-in Costs Materials Conversion Costs

a. 15,000 15,000 15,000

b. 19,000 19,000 20,000

c. 20,000 20,000 18,000

d. 25,000 25,000 20,000

 
2. Using the same information in No. 1, and using the weighted average method, what
was the cost per equivalent unit for conversion costs? 
A. P4,200 / 15,000 
B. P5,800 / 18,000
C. P5,800 / 20,000
D. P5,000 / 18,000
29. Leomord Custom Carpentry manufactures chairs in its Processing Department.
Direct materials are included at the inception of the production cycle and must be
bundled in single kits for each unit. Conversion costs are incurred evenly
throughout the production cycle. Inspection takes place before the units are
transferred to the next production department. After inspection, some units are
spoiled due to non-detectible material defects. Spoiled units generally constitute
3% of the good units. Data provided for March 2019 are as follows:

WIP, beginning inventory 3/1/2019 30,000 units

     Direct materials (100% complete)  

     Conversion costs (89.5% complete)  

Started during March 80,000 units

Completed and transferred out 86,000 units

   

WIP, ending inventory 3/31/2019 20,000 units

     Direct materials (100% complete)    

     Conversion costs (75% complete)  

Costs:  

WIP, beginning inventory: 70,000

     Direct materials P70,000

     Conversion costs 40,000

     Direct materials added 160,000

     Conversion costs added 120,000

1. What are the normal and abnormal spoilage units, respectively, for March when using
FIFO? 
A. 2,580 units; 1,420 units
B. 1,950 units; 1,390 units
C. 1,690 units; 1,050 units
D. 1,420 units; 2,000 units
 
2. What costs would be associated with normal and abnormal spoilage, respectively,
using the FIFO method of process costing? 
A. P 5,890.64; P 9,133.20
B. P 5,890.64; P 5,826.00
C. P 6,469.64; P 7,690.36
D. P 9,133.20; P 5,026.80
3. What costs are allocated to the ending work-in-process inventory for direct materials,
and conversion costs, respectively, using the FIFO method of process costing? 
A. P 38,250; P 24,850 
B. P 40,000; P 23,100
C. P 40,000; P 21,590
D. P 49,500; P 13,600

30. Basic Chemical Industries, Inc. produces a product through a continuous process
in different departments. Each department has an independent cost accountant
who is tasked with cumulating costs and the preparation of reports for the
department assigned to him. You have been assigned as cost accountant for
Department A.
Production data of Department A for the month of September, 2011 were as follows:

Work in process, September 1 ………………. 14,000 kg.

Percentage of completion …………………… 70%

Started in process ....  …………………………. 70,000 kg.

Work in process, September 30 ……………. 12,000 kg.

Percentage of completion ……………………. 60%

Lost units (normal) at end of process ………. 2,000 kg

 
In this department. costs are applied as follows:
Materials - added at start.
Labor and overhead - evenly distributed.
Department costs incurred in September were:

Materials ……………………………………... P56,000

Labor ………………………………………… 17,350

Overhead ……………………………………. 13,880

Work in process cost, September 1 ………. 8,0000

 
1. Compute the current total unit for materials, labor, and overhead. 
A. P1.23 
B. 1.04
C. P1.17
D. 1.25
2. compute the adjustment for normal lost per unit. 
A. P.0368 
B. .0360
C. P.0298
D. .0357
3. what is the cost of the: 

    Work-in-process
 Units transferred September 30

a. P82,390 P9,600

b. 81,890 9,600

c. 72,000 12,840

d. 82,390 12,840