Week 2: Job Order and Process Costing Systems - Quiz

Topics: Inventory, Supply chain management terms, Manufacturing Pages: 7 (1691 words) Published: September 25, 2014
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Question 1.
Question :
(TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?

 
Student Answer:

A steel factory that processes iron ore into steel bars
 

A factory that processes sugar and other ingredients into black licorice  

A costume maker that makes specialty costumes for figure skaters  

All of these
 
Instructor Explanation:
Chapter 3

 
Points Received:
5 of 5
 
Comments:

Question 2.
Question :
(TCO F) Luft Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:  
 
 
Units
Percent Complete with respect to Conversion
Beginning work in process inventory
11,000
90%
Started in production during June
58,000
 
Ending work in process inventory
17,000
10%

 
 
According to the company's records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred in the department during the month.  

What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

 
Student Answer:

$8.070
 

$7.891
 

$5.928
 

$4.584
 
Instructor Explanation:
To solve for units transferred:
 
+ Work in progress, beginning
11,000
+ Units started into production during the month
58,000
- Work in process, ending
17,000
= Units completed and transferred out during the month
$52,000

 
Equivalent Units of Production
 
 
Conversion
Transferred to next department
52,000
Ending work in process
 
     (conversion: 17,000 units x 10% complete
1,700
Equivalent units of production
53,700

 
Cost per Equivalent Unit
 
 
Conversion
Cost of beginning work in process
$79,893
Cost added during the period
343,830
Total cost (a)
423,723
 
 
Equivalent units of production (b)
53,700
Cost per equivalent unit (a) / (b)
$7.891

 
Points Received:
5 of 5
 
Comments:

Question 3.
Question :
(TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company's processing departments for a recent month:  
 
 
Units
Material Cost
Beginning work in process
30,000
$22,000
Started during the month
80,000
$72,000
Units completed
85,000
 
Ending work in process
25,000
 

 
 
All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:

 
Student Answer:

$0.86
 

$0.90
 

$1.10
 

$1.18
 
Instructor Explanation:

 
To solve for ending work in process:
 
+ Work in process, beginning
30,000
+ Units started into production during the month
80,000
- Units completed and transferred out during the month
85,000
= Work in process, ending
25,000

 
Equivalent Units of Production
 
 
Materials
Transferred to next department
85,000
Ending work in process
 
     (conversion: 25,000 units x 10% complete)
25,000
Equivalent units of production
110,000

 
Cost per Equivalent Unit
 
 
Conversion
Cost of beginning work in process
$22,000
Cost added during the period
72,000
Total cost (a)
$94,000
 
 
Equivalent units of production (b)
110,000
Cost per equivalent unit (a) / (b)
$0.85

 
Points Received:
5 of 5
 
Comments:

Question 4.
Question :
(TCO F) Which of the following accounts is debited when direct labor is recorded?

 
Student Answer:

Work in process
 

Salaries and wages expense
 

Salaries and wages payable
 

Manufacturing overhead
 
Instructor Explanation:
Chapter 3

 
Points Received:
0 of 5
 
Comments:...
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