Week 2: Job Order and Process Costing Systems - Quiz

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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