ACT120: COST ACCOUNTING AND CONTROL
PROCESS COSTING PRACTICE QUESTIONS
MAY 2, 2024
1. An equivalent unit of material or conversion cost is equal to:
A. the prime cost
B. the amount of material or conversion cost necessary to complete one unit of production
C. a unit of work in process inventory
D. the amount of material or conversion cost necessary to start a unit of production into work in process
E. 50% of the material or conversion cost of a unit of finished goods inventory, assuming a linear
production pattern
2. An item that does not appear on a cost of production report is:
A. work in process—beginning inventory
B. cumulative costs through the end of departmental production
C. finished goods—ending inventory
D. materials used in the department
E. unit costs added by the department
3. Goode Manufacturing has three producing departments in its factory. The ending inventory in the
Milling Department consisted of 3,000 units. These units were 60% complete with respect to labor and
factory overhead. Materials are applied at the end of the milling process. Unit costs for the complete
process in the Milling Department are: materials, $1; labor, $2; and factory overhead, $3. The
appropriate unit cost for each unit in the ending inventory is:
A. $2 D. $3
B. $4 E. $6
C. $5
4. Gyro Products transferred 10,000 units to one department. An additional 3,000 units of materials were
added in the department. At the end of the month, 7,000 units were transferred to the next department.
There was no beginning inventory. The costs for units transferred in would be effectively allocated over:
A. 17,000 units C. 10,000 units E. 13,000 units
B. 3,000 units D. 7,000 units
5. A characteristic of a process costing system is that:
A. costs are accumulated by order
B. it is used by a company manufacturing custom machinery
C. standard costs are not applicable
D. it requires a lot more detailed accounting than does a job order system
E. work in process inventory is restated in terms of completed units
6. Transferred-in costs as used in a process cost accounting system are:
A. supervisory salaries that are transferred from an overhead cost center to a production cost center
B. ending work in process inventory of a previous process that will be used in a succeeding process
C. labor that is transferred from another department within the same plant instead of hiring temporary
workers from the outside
D. costs of the product of a previous internal process that is subsequently used in a succeeding internal
process
E. none of the above
7. Assuming that there was no beginning work in process inventory and the ending work in process
inventory is 50% complete as to conversion costs, the number of equivalent units as to conversion costs
would be:
A. less than the units completed
B. more than the units completed
C. the same as the units placed in process
D. the same as the units completed
E. less than the units placed in process
8. Read, Inc. instituted a new process in October. During October, 10,000 units were started in
Department A. Of the units started, 7,000 were transferred to Department B, and 3,000 remained in work
in process at October 31. The work in process at October 31 was 100% complete as to material costs and
50% complete as to conversion costs. Materials costs of $27,000 and conversion costs of $39,950 were
charged to Department A in October. What were the total costs transferred to Department B?
A. $46,900 C. $51,800 E. none of the above
B. $53,600 D. $57,120
9. In accounting for beginning inventory costs, the method that allows the addition of beginning inventory
costs with costs incurred during the period is referred to as:
A. first-in, first-out C. last-in, first-out E. first-in, last-out
B. addition D. average
10. Chicago Processing Co. uses the average costing method and reported a beginning inventory of 5,000
units that were 20% complete with respect to materials in one department. During the month, 11,000 units
were started; 8,000 units were finished; ending inventory amounted to 8,000 units that were 60%
complete with respect to materials. Total materials cost during the period for work in process should be
spread over:
A. 7,200 units C. 11,200 units E. 12,800 units
B. 16,000 units D. 13,200 units
SUPPORTING CALCULATION: 8,000 + .60(8,000) = 12,800 units
11. Dover Corporation's production cycle starts in the Mixing Department. The following information is
available for April:
Units
Work in process, April 1 (50% complete) 40,000
Started in April 240,000
Work in process, April 30 (60% complete) 25,000
Materials are added at the beginning of the process in the Mixing Department. Using the average cost
method, what are the equivalent units of production for the month of April?
12. Information concerning Department A of Neeley Company for June is as follows:
Materials
Units Costs
Beginning work in process 17,000 $12,800
Started in June 82,000 69,700
Units completed 85,000
Ending work in process 14,000
All materials are added at the beginning of the process. Using the average cost method, the cost per
equivalent unit for materials is:
13. Kennedy Company adds materials in the beginning of the process in the Forming Department, which
is the first of two stages of its production cycle. Information concerning the materials used in the Forming
Department in October is as follows:
Materials
Units Costs
Work in process, October 1 6,000 $ 3,000
Units started 50,000 25,560
Units completed and transferred out 44,000
Using the average cost method, what was the materials cost of work in process at October 31?
14. Mehta Company Co. 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?
15. Julia Company makes fabric-covered hatboxes. The company began September 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 September 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?
Reed Company. has the following information for November:
Beginning Work in Process Inventory
(70% complete as to conversion) 6,000 units
Started 24,000 units
Ending Work in Process Inventory
(10% complete as to conversion) 8,500 units
Beginning WIP Inventory Costs:
Material $23,400
Conversion 50,607
Current Period Costs:
Material $31,500
Conversion 76,956
All material is added at the start of the process and all finished products are transferred out.
16. Refer to Reed Company. How many units were transferred out in November?
17. Refer to Reed Company. Assume that weighted average process costing is used. What is the cost per
equivalent unit for material
18. Refer to Reed Company. Assume that FIFO process costing is used. What is the cost per equivalent unit
for conversion?
Ryan Company adds material at the start to its production process and has the following information available
for March:
Beginning Work in Process Inventory
(40% complete as to conversion) 7,000 units
Started this period 32,000 units
Ending Work in Process Inventory
(25% complete as to conversion) 2,500 units
Transferred out ?
19. Compute the number of units started and completed in March.
20. Refer to Ryan Company. Calculate equivalent units of production for material using FIFO.
21. Calculate equivalent units of production for conversion using FIFO.
22. Calculate equivalent units of production for material using weighted average.
23. Refer to Ryan Company. Calculate equivalent units of production for conversion using weighted average.