ACCT 505 Week 2 Quiz - 1. (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs.

ACCT 505 Week 2 Quiz

 

1. (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: (Points : 5)

The same as the number of units put into production.

Less than the number of units put into production.

The same as the number of units completed.

Less than the number of units completed

Question 2  (TCO F) Process costing would be appropriate for each of the following except: (Points : 5)

custom furniture manufacturing.

oil refining.

grain milling.

newsprint production.

Question 3. (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: (Points : 5)

$0.86

$0.90

$1.10

$1.18

 

Question 4  (TCO F) Which of the following accounts is debited when direct labor is recorded? (Points : 5)

Work in process

Salaries and wages expense

Salaries and wages payable

Manufacturing overhead

 

Question 5. (TCO F) Stickles Corporation incurred $79,000 of actual Manufacturing Overhead costs during August. During the same period, the Manufacturing Overhead applied to Work in Process was $75,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: (Points : 5)

debit to Manufacturing Overhead of $79,000.

credit to Manufacturing Overhead of $79,000.

credit to Work in Process of $75,000.

debit to Work in Process of $75,000.

 

Question 6  (TCO F) Wedd Corporation had $35,000 of raw materials on hand on May 1. During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total: (Points : 5)

$92,000. $0. 68,000. $87,000.

 

 

1. (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:
i. Custom boat builder

ii. Frozen cranberry juice processor

iii. Concrete block manufacturer

iv. Winery that produces a number of varietal wines

v. Aluminum refiner that makes aluminum ingots from bauxite ore For each company, indicate whether the company is most likely to use job-order costing or process costing. (Points : 15)

 

Question 2  (TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet:  

Direct materials	$61,050
Direct labor hours	1,332 labor hours
Direct labor wage rate	$14 per labor-hour
Machine Hours	1,480 machine hours
Number of units completed	3,700 units

 

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)

 

Direct materials                                                           $61,050

+ Direct labor ($14 x 1332)                                        $18,648

+Mfg. Overhead ($13 x 1480)                                    $19,240

Total cost                                                                      $98,938

Unit product cost

 $98,938 / 3700 units                                                   $26.74

 

Question 3. (TCO F) Auger Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning

    Units in process                                                                   700

    Percent complete with respect to materials                           80%

    Percent complete with respect to conversion                                   40%

Costs in the beginning inventory:

    Materials cost                                                                       $1,904

    Conversion cost                                                                   $8,624

Units started into production during the month                                    29,000

Units completed and transferred out                                        28,800

Costs added to production during the month:

    Materials cost                                                                       $104,044

    Conversion cost                                                                    $875,266

Work in process, ending:

    Units in process                                                                   900

    Percent complete with respect to materials                           70%

    Percent complete with respect to conversion                                   20%

 

Required:
i. Determine the equivalent units of production.

ii. Determine the costs per equivalent unit.

iii. Determine the cost of ending work in process inventory.

iv. Determine the cost of the units transferred to the next department (Points : 15)

 

Weighted-Average Method

 

Question 4 (TCO F) Hunsicker Corporation has provided the following data for the month of January:

Inventories                   Beginning        Ending

Raw materials              $30,000           $33,000

Work In process          $20,000           $18,000

Finished goods             $52,000           $60,000

 

Additional Information

Raw material purchases                                                                                               $63,000

Direct labor costs                                                                                             $92,000

Manufacturing overhead cost incurred                                                                        $75,000

Indirect materials included in manufacturing overhead costs incurred             $6,000

Manufacturing overhead cost applied to work in process                                            $69,000

 

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)

 

TUTORIAL PREVIEW

Quantity Schedule and Equivalent Units

	Quantity Schedule
Units to be accounted for:
Work in process, Beginning (materials 80% complete, conversion 40% complete)	700
Started into production	29,000
Total units accounted for	29,700

 

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