Chapter 6—Process Costing a.

b.
units completed by a production department in the period.
number of units worked on during the period by a production
department.
MULTIPLE CHOICE c. number of whole units that could have been completed if all
work of the period had been used to produce whole units.
1. Which cost accumulation procedure is most applicable in continuous mass- d. identifiable units existing at the end of the period in a
production manufacturing environments? production department.
a. standard
b. Actual ANS: C DIF: Moderate OBJ: 6-2
c. Process
d. job order 7. In a process costing system using the weighted average method, cost per
equivalent unit for a given cost component is found by dividing which of the
ANS: C DIF: Easy OBJ: 6-1 following by EUP?
a. only current period cost
2. Process costing is used in companies that b. current period cost plus the cost of beginning inventory
a. engage in road and bridge construction. c. current period cost less the cost of beginning inventory
b. produce sailboats made to customer specifications. d. current period cost plus the cost of ending inventory
c. produce bricks for sale to the public.
d. construct houses according to customer plans.
ANS: B DIF: Easy OBJ: 6-2
ANS: C DIF: Easy OBJ: 6-1
8. The weighted average method is thought by some accountants to be
3. A producer of ________ would not use a process costing system. inferior to the FIFO method because it
a. Gasoline a. is more difficult to apply.
b. potato chips b. only considers the last units worked on.
c. blank videotapes c. ignores work performed in subsequent periods.
d. stained glass windows d. commingles costs of two periods.

ANS: D DIF: Easy OBJ: 6-1

ANS: D DIF: Moderate OBJ: 6-3
4. A process costing system is used by a company that
a. produces heterogeneous products. 9. The first step in determining the cost per EUP per cost component under
b. produces items by special request of customers. the weighted average method is to
c. produces homogeneous products. a. add the beginning Work in Process Inventory cost to the current period's
d. accumulates costs by job. production cost.
b. divide the current period's production cost by the equivalent units.
ANS: C DIF: Easy OBJ: 6-1 c. subtract the beginning Work in Process Inventory cost from the current
period's production cost.
5. Which is the best cost accumulation procedure to use for continuous mass d. divide the current period's production cost into the EUP.
production of like units?
a. Actual
b. standard ANS: A DIF: Moderate OBJ: 6-3
c. job order
d. Process
10. The difference between EUP calculated using FIFO and EUP calculated using
ANS: D DIF: Easy OBJ: 6-1 weighted average is the equivalent units
a. started and completed during the period.
6. Equivalent units of production are equal to the b. residing in beginning Work in Process Inventory.

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 c. residing in ending Work in Process Inventory. a. in the treatment of beginning Work in Process Inventory.
d. uncompleted in Work in Process Inventory. b. in the treatment of current period production costs.
c. in the treatment of spoiled units.
d. none of the above.
ANS: B DIF: Moderate OBJ: 6-3,6-4

11. EUP calculations for standard process costing are the same as ANS: A DIF: Easy OBJ: 6-3,6-4
a. the EUP calculations for weighted average process costing.
b. the EUP calculations for FIFO process costing. 16. Material is added at the beginning of a process in a process costing system.
c. LIFO inventory costing for merchandise. The beginning Work in Process Inventory for the process was 30 percent
d. the EUP calculations for LIFO process costing. complete as to conversion costs. Using the FIFO method of costing, the
number of equivalent units of material for the process during this period is
equal to the
ANS: B DIF: Moderate OBJ: 6-5 a. beginning inventory this period for the process.
b. units started this period in the process.
12. In a FIFO process costing system, which of the following are assumed to be c. units started this period in the process plus the beginning Work in Process Inventory.
completed first in the current period? d. units started and completed this period plus the units in ending Work in Process Invento
a. units started this period
b. units started last period
c. units transferred out ANS: D DIF: Moderate OBJ: 6-3,6-4
d. units still in process
17. In a cost of production report using process costing, transferred-in costs are
similar to the
ANS: B DIF: Easy OBJ: 6-4 a. cost of material added at the beginning of production.
b. conversion cost added during the period.
13. To compute equivalent units of production using the FIFO method of c. cost transferred out to the next department.
process costing, work for the current period must be stated in units d. cost included in beginning inventory.
a. completed during the period and units in ending inventory.
b. completed from beginning inventory, units started and completed during
the period, and units partially completed in ending inventory. ANS: A DIF: Easy OBJ: 6-3
c. started during the period and units transferred out during the period.
d. processed during the period and units completed during the period. 18. In a process costing system, the journal entry to record the transfer of
goods from Department #2 to Finished Goods Inventory is a
a. debit Work in Process Inventory #2, credit Finished Goods Inventory.
ANS: B DIF: Moderate OBJ: 6-4 b. debit Finished Goods Inventory, credit Work in Process Inventory #1.
c. debit Finished Goods Inventory, credit Work in Process Inventory #2.
14. The FIFO method of process costing will produce the same cost of goods d. debit Cost of Goods Sold, credit Work in Process Inventory #2.
transferred out amount as the weighted average method when
a. the goods produced are homogeneous.
b. there is no beginning Work in Process Inventory. ANS: C DIF: Easy OBJ: 6-3
c. there is no ending Work in Process Inventory.
d. beginning and ending Work in Process Inventories are each 50 percent complete.
19. Transferred-in cost represents the cost from
a. the last department only.
b. the last production cycle.
ANS: B DIF: Easy OBJ: 6-4 c. all prior departments.
d. the current period only.
15. The primary difference between the FIFO and weighted average methods of
process costing is

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 ANS: C DIF: Easy OBJ: 6-3
a. no no
20. Which of the following is(are) the same between the weighted average and
b. no yes
FIFO methods of calculating EUPs?
c. yes yes
d. yes no
Units to EUP Total cost to
account for calculations account for
ANS: C DIF: Easy OBJ: 6-3
a. no yes no
b. yes yes yes 25. A process costing system
c. yes no no
d. yes no yes Calculates average cost Determines total units to
per whole unit account for

ANS: D DIF: Easy OBJ: 6-3,6-4

a. yes yes
b. no no
21. Process costing techniques should be used in assigning costs to products
c. yes no
a. if a product is manufactured on the basis of each order received.
d. no yes
b. when production is only partially completed during the accounting period.
c. if a product is composed of mass-produced homogeneous units.
d. whenever standard-costing techniques should not be used.
ANS: D DIF: Easy OBJ: 6-2

26. A hybrid costing system combines characteristics of

ANS: C DIF: Easy OBJ: 6-1
a. job order and standard costing systems.
b. job order and process costing systems.
22. Averaging the total cost of completed beginning inventory and units started
c. process and standard costing systems.
and completed over all units transferred out is known as
d. job order and normal costing systems.
a. strict FIFO.
b. modified FIFO.
c. weighted average costing.
ANS: B DIF: Easy OBJ: 6-6
d. normal costing.
27. When standard costs are used in process costing,
a. variances can be measured during the production period.
ANS: B DIF: Moderate OBJ: 6-3
b. total costs rather than current production and current costs are
used.
23. A process costing system
c. process costing calculations are made simpler.
a. cannot use standard costs.
d. the weighted average method of calculating EUPs makes computing
b. restates Work in Process Inventory in terms of completed units.
transferred-out costs easier.
c. accumulates costs by job rather than by department.
d. assigns direct labor and manufacturing overhead costs separately to units of production.
ANS: D DIF: Moderate OBJ: 6-5
ANS: B DIF: Easy OBJ: 6-2
28. Which of the following is subtracted from weighted average EUP to derive
FIFO EUP?
24. A process costing system does which of the following?
a. beginning WIP EUP completed in current period
b. beginning WIP EUP produced in prior period
Calculates EUPs Assigns costs to inventories
c. ending WIP EUP not completed

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 d. ending WIP EUP completed b. putting the appropriate components together for a stereo
c. adding the wrong components when assembling a stereo
d. putting the appropriate pieces for a bike in the box
ANS: B DIF: Easy OBJ: 6-2,6-4

29. Thecost of abnormal continuous losses is ANS: C DIF: Easy OBJ: 6-8
a. considered a product cost.
b. absorbed by all units in ending inventory and transferred out on an equivalent34.
unit The
basis.
method of neglect handles spoilage that is
c. written off as a loss on an equivalent unit basis. a. discrete and abnormal.
d. absorbed by all units past the inspection point. b. discrete and normal.
c. continuous and abnormal.
d. continuous and normal.
ANS: C DIF: Easy OBJ: 6-8

30. Abnormal spoilage can be ANS: D DIF: Moderate OBJ: 6-8

continuous discrete 35. The cost of normal discrete losses is

a. absorbed by all units past the inspection point on an equivalent unit basis.
b. absorbed by all units in ending inventory.
a. yes no
c. considered a period cost.
b. no no
d. written off as a loss on an equivalent unit basis.
c. yes yes
d. no yes
ANS: A DIF: Easy OBJ: 6-8
ANS: C DIF: Easy OBJ: 6-8
36. The cost of abnormal continuous losses is
a. considered a product cost.
31. When the cost of lost units must be assigned, and those same units must
b. absorbed by all units in ending inventory and transferred out on an equivalent unit basi
be included in an equivalent unit schedule, these units are considered
c. written off as a loss on an equivalent unit basis.
a. normal and discrete.
d. absorbed by all units past the inspection point.
b. normal and continuous.
c. abnormal and discrete.
d. abnormal and continuous.
ANS: C DIF: Easy OBJ: 6-8

37. Normal spoilage units resulting from a continuous process

ANS: D DIF: Moderate OBJ: 6-8
a. are extended to the EUP schedule.
b. result in a higher unit cost for the good units produced.
32. A continuous loss
c. result in a loss being incurred.
a. occurs unevenly throughout a process.
d. cause estimated overhead to increase.
b. never occurs during the production process.
c. always occurs at the same place in a production process.
d. occurs evenly throughout the production process.
ANS: B DIF: Easy OBJ: 6-8

38. When the cost of lost units must be assigned, and those same units must
ANS: D DIF: Easy OBJ: 6-8
be included in an equivalent unit schedule, these units are considered
a. normal and discrete.
33. Which of the following would be considered a discrete loss in a production
b. normal and continuous.
process?
c. abnormal and discrete.
a. adding the correct ingredients to make a bottle of ketchup

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 d. abnormal and continuous.
43. Taylor Co. has a production process in which the inspection point is at 65
percent of conversion. The beginning inventory for July was 35 percent
ANS: D DIF: Moderate OBJ: 6-8 complete and ending inventory was 80 percent complete. Normal spoilage
costs would be assigned to which of the following groups of units, using
39. Which of the following accounts is credited when abnormal spoilage is FIFO costing?
written off in an actual cost system?
a. Miscellaneous Revenue Beginning Ending Units Started
b. Loss from Spoilage Inventory Inventory & Completed
c. Finished Goods
d. Work in Process
a. no yes yes
b. yes yes yes
c. no no yes
ANS: D DIF: Easy OBJ: 6-8
d. yes no no
40. The cost of abnormal discrete units must be assigned to
good units lost units
ANS: B DIF: Moderate OBJ: 6-8

a. yes yes 44. Which of the following is not a question that needs to be answered with
b. no no regard to quality control?
c. yes no a. What happens to the spoiled units?
d. no yes b. What is the actual cost of spoilage?
c. How can spoilage be controlled?
d. Why does spoilage happen?
ANS: D DIF: Easy OBJ: 6-8

41. Which of the following statements is false? The cost of rework on defective ANS: A DIF: Moderate OBJ: 6-8
units, if
a. abnormal, should be assigned to a loss account. 45. Normal spoilage units resulting from a continuous process
b. normal and if actual costs are used, should be assigned to material, a. are extended to the EUP schedule.
labor and overhead costs of the good production. b. result in a higher unit cost for the good units produced.
c. normal and if standard costs are used, should be considered when c. result in a loss being incurred.
developing the overhead application rate. d. cause estimated overhead to increase.
d. abnormal, should be prorated among Work In Process, Finished
Goods, and Cost of Goods Sold.
ANS: B DIF: Easy OBJ: 6-8

ANS: D DIF: Moderate OBJ: 6-8 46. The addition of material in a successor department that causes an increase
in volume is called
42. If normal spoilage is detected at an inspection point within the process a. accretion.
(rather than at the end), the cost of that spoilage should be b. reworked units.
a. included with the cost of the units sold during the period. c. complex procedure.
b. included with the cost of the units completed in that department during the period.d. undetected spoilage.
c. allocated to ending work in process units and units transferred out based on their relative values.
d. allocated to the good units that have passed the inspection point.
ANS: A DIF: Easy OBJ: 6-8

ANS: D DIF: Moderate OBJ: 6-8

184
47. Long Company transferred 5,500 units to Finished Goods Inventory during 49. Bush Company had beginning Work in Process Inventory of 5,000 units that
September. On September 1, the company had 300 units on hand (40 were 40 percent complete as to conversion costs. X started and completed
percent complete as to both material and conversion costs). On June 30, 42,000 units this period and had ending Work in Process Inventory of
the company had 800 units (10 percent complete as to material and 20 12,000 units. How many units were started this period?
percent complete as to conversion costs). The number of units started and a. 42,000
completed during September was: b. 47,000
a. 5,200. c. 54,000
b. 5,380. d. 59,000
c. 5,500.
d. 6,300.
ANS: C

ANS: A Beginning Work in Process 5,000

Units Transferred Out 5,
Add: Units Started 54,000
500
Less: Units in Beginning Inventory ( Deduct: Units Transferred Out 47,000
300)
Units Started and Completed 5, Ending Work in Process 12,000
200

DIF: Moderate OBJ: 6-2

DIF: Easy OBJ: 6-2
50. Dixie Company uses a weighted average process costing system. Material
48. Green Company started 9,000 units in February. The company transferred is added at the start of production. Dixie Company started 13,000 units into
out 7,000 finished units and ended the period with 3,500 units that were 40 production and had 4,500 units in process at the start of the period that
percent complete as to both material and conversion costs. Beginning Work were 60 percent complete as to conversion costs. If Dixie transferred out
in Process Inventory units were 11,750 units, how many units were in ending Work in Process Inventory?
a. 500. a. 1,250
b. 600. b. 3,000
c. 1,500. c. 3,500
d. 2,000. d. 5,750

ANS: C ANS: D
Beginning Work in Process 1,50
0 Beginning Work in Process 4,500
Add: Units Started 9,00
0 Add: Units Started 13,000
Deduct: Units Transferred Out 7,00 Deduct: Units Transferred Out 11,750
0
Ending Work in Process 3,50 Ending Work in Process 5,750
0

DIF: Easy OBJ: 6-2

DIF: Easy OBJ: 6-2

185
51. Taylor Company uses a weighted average process costing system and + Ending Work in Process 80% 1,360
started 30,000 units this month. Taylor had 12,000 units that were 20 1,700
percent complete as to conversion costs in beginning Work in Process Equivalent Units of Production 4,910
Inventory and 3,000 units that were 40 percent complete as to conversion
costs in ending Work in Process Inventory. What are equivalent units for
conversion costs? DIF: Moderate OBJ: 6-2,6-3
a. 37,800
b. 40,200 53. Mehta Company Co. uses a FIFO process costing system. The company had
c. 40,800 5,000 units that were 60 percent complete as to conversion costs at the
d. 42,000 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
ANS: B material is added at the beginning of the process?
Beginning Work in Process 20% 2,400 a. 18,000
12,000 b. 22,000
+ Completion of Units in Process 80% 9,600 c. 25,000
12,000 d. 27,000
+ Units Started and Completed 100% 27,000
27,000
+ Ending Work in Process 40% 1,200 ANS: B
3,000 The material is added at the beginning of the process;
Equivalent Units of Production 40,200 therefore there are 22,000 equivalent units of material.

DIF: Easy OBJ: 6-2,6-4

DIF: Easy OBJ: 6-2,6-3
54. Julia Company makes fabric-covered hatboxes. The company began
52. Kerry Company makes small metal containers. The company began September with 500 boxes in process that were 100 percent complete as to
December with 250 containers in process that were 30 percent complete as cardboard, 80 percent complete as to cloth, and 60 percent complete as to
to material and 40 percent complete as to conversion costs. During the conversion costs. During the month, 3,300 boxes were started. On
month, 5,000 containers were started. At month end, 1,700 containers September 30, 350 boxes were in process (100 percent complete as to
were still in process (45 percent complete as to material and 80 percent cardboard, 70 percent complete as to cloth, and 55 percent complete as to
complete as to conversion costs). Using the weighted average method, conversion costs). Using the FIFO method, what are equivalent units for
what are the equivalent units for conversion costs? cloth?
a. 3,450 a. 3,295
b. 4,560 b. 3,395
c. 4,610 c. 3,450
d. 4,910 d. 3,595

ANS: D ANS: A

Beginning Work in Process 40% 100 Beginning Work in Process 0% -

250 (Ignored for FIFO) 500
+ Completion of Units in Process 60% 150 + Completion of Units in Process 20% 100
250 500
+ Units Started and Completed 100% 3,300 + Units Started and Completed 100% 2,950
3,300 2,950

186
 + Ending Work in Process 70% 245 DIF: Easy OBJ: 6-2
350
Equivalent Units of Production 3,295 56. Refer to Reed Company. Assume that weighted average process costing is
used. What is the cost per equivalent unit for material?
a. $0.55
b. $1.05
DIF: Moderate OBJ: 6-2,6-4 c. $1.31
d. $1.83
Reed Company

Reed Company. has the following information for November: ANS: D

Beginning Work in Process Inventory Material Costs:

(70% complete as to conversion) 6,000 units
Started 24,000 units Beginning $
Ending Work in Process Inventory 23,400
(10% complete as to conversion) 8,500 units Current 31,
Period 500
Beginning WIP Inventory 54, ÷ 30,000 = $ 1.83
Costs: 900
Material $23,400 units
Conversion 50,607

Current Period Costs: DIF: Moderate OBJ: 6-3

Material $31,500
Conversion 76,956 57. Refer to Reed Company. Assume that FIFO process costing is used. What is
the cost per equivalent unit for conversion?
All material is added at the start of the process and all finished products are a. $3.44
transferred out. b. $4.24
c. $5.71
55. Refer to Reed Company. How many units were transferred out in d. $7.03
November?
a. 15,500
b. 18,000 ANS: B
c. 21,500
d. 24,000 Conversion Costs:
Beginning (Ignored for FIFO) $ -
ANS: C Current Period 76,956

Beginning Work in Process 6,000 $ 76,956

Add: Units Started 24,000 Equivalent Units
Deduct: Units Transferred 21,500 Beginning Inventory (6,000 * 1,800
Out 30%)
Ending Work in Process 8,500 Started and Completed 15,500
(15,500)

187
 Ending Inventory (8,500 * 850 a. 600
10%) b. 4,900
18,150 equivalent units c. 5,950
d. 7,000

Cost per equivalent unit $

4.24 ANS: B

Wreaths completed from BWIP 500

DIF: Moderate OBJ: 6-4 Wreaths started and completed 4400
Holiday Company 4900

The Holiday Company makes wreaths in two departments: Forming and

Decorating. Forming began the month with 500 wreaths in process that DIF: Easy OBJ: 6-2
were 100 percent complete as to material and 40 percent complete as to
conversion. During the month, 6,500 wreaths were started. At month end, 59. Refer to Holiday Company. What was the cost transferred out of Forming
Forming had 2,100 wreaths that were still in process that were 100 percent during the month?
complete as to material and 50 percent complete as to conversion. Assume a. $5,341
Forming uses the weighted average method of process costing. Costs in the b. $6,419
Forming Department are as follows: c. $8,245
d. $8,330
Beginning Work in Process Costs:
Material $1,000
Conversion 1,500 ANS: D
Current Costs: Units
Material $3,200 Transferred Cost per
Conversion 5,045 Out Eq. Unit Total
4,900 1.70 $8,330
The Decorating Department had 600 wreaths in process at the beginning of
the month that were 80 percent complete as to material and 90 percent
complete as to conversion. The department had 300 units in ending Work in
Process that were 50 percent complete as to material and 75 percent DIF: Moderate OBJ: 6-3
complete as to conversion. Decorating uses the FIFO method of process
costing, and costs associated with Decorating are: 60. Refer to Holiday Company. Assume 8,000 units were transferred to
Decorating. Compute the number of equivalent units as to costs in
Beginning WIP Inventory: Decorating for the transferred-in cost component.
Transferred In $1,170 a. 7,400
Material 4,320 b. 7,700
Conversion 6,210 c. 8,000
Current Period: d. 8,600
Transferred In ?
Material $67,745
Conversion 95,820 ANS: C
The transferred-in cost component is the 8,000 units that were transferred in.

58. Refer to Holiday Company. How many units were transferred to Decorating
during the month? DIF: Moderate OBJ: 6-4

188
61. Refer to Holiday Company. Assume 8,000 units were transferred to
Decorating. Compute the number of equivalent units in Decorating for DIF: Moderate OBJ: 6-4
material.
a. 7,970 63. Refer to Holiday Company. Assume that 8,000 units were transferred to
b. 8,000 Decorating at a total cost of $16,000. What is the material cost per
c. 8,330 equivalent unit in Decorating?
d. 8,450 a. $8.50
b. $8.65
c. $8.80
ANS: A d. $9.04

Materials: Decorating: FIFO Units % Eqiv.

Complete Units ANS: A
12
Beginning Work in Process 600 20% 0 When FIFO is used, consider only current costs.

+ Units Started and Completed 7,700 100% 7,700 Current Equiv Cost/
Costs Units Equiv
+ Ending Work in Process 300 50% 150 Unit
$67,745 7,970 $8.50
Equivalent Units of Production 7,970

DIF: Moderate OBJ: 6-4

DIF: Moderate OBJ: 6-4
64. Refer to Holiday Company. Assume that 8,000 units were transferred to
62. Refer to Holiday Company. Assume 8,000 units were transferred to Decorating at a total cost of $16,000. What is the conversion cost per
Decorating. Compute the number of equivalent units in Decorating for equivalent unit in Decorating?
conversion. a. $11.32
a. 7,925 b. $11.46
b. 7,985 c. $12.00
c. 8,360 d. $12.78
d. 8,465
ANS: C
ANS: B
When FIFO is used, consider only current costs.
Conversion: Decorating: Units % Equiv.
FIFO Complete Units Current Equiv Cost/
Costs Units Equiv
Unit
Beginning Work in Process 600 10% 60
$95,820 7,985 $12.00
+ Units Started and Completed 7,700 100% 7,700
DIF: Moderate OBJ: 6-4
+ Ending Work in Process 300 75% 225
Equivalent Units of
Production 7,985

189
65. Refer to Holiday Company. Assume the material cost per EUP is $8.00 and Less: Ending Work in Process 2,500
the conversion cost per EUP is $15 in Decorating. What is the cost of
completing the units in beginning inventory? Units started and completed this period 29,500
a. $ 960
b. $ 1,380
c. $ 1,860 DIF: Moderate OBJ: 6-2
d. $11,940
67. Refer to Ryan Company. Calculate equivalent units of production for
material using FIFO.
ANS: C a. 32,000
b. 36,800
c. 37,125
Costs to Complete Percent to Cost per d. 39,000
Beg Inv Units Complete Unit Total
Materials 600 20% $8 $960
Conversion 600 10% $15 $900 ANS: A
Total Costs to $1,860 Materials are added at the beginning of the process.
Complete 32,000 units were started in the current period; therefore
there are 32,000 equivalent units for materials.

DIF: Moderate OBJ: 6-4

DIF: Easy OBJ: 6-2,6-4
Ryan Company
68. Refer to Ryan Company. Calculate equivalent units of production for
conversion using FIFO.
Ryan Company adds material at the start to its production process and has
a. 30,125
the following information available for March:
b. 34,325
c. 37,125
Beginning Work in Process Inventory
d. 39,000
(40% complete as to conversion) 7,000 units
Started this period 32,000 units
Ending Work in Process Inventory
ANS: B
(25% complete as to conversion) 2,500 units
Transferred out ?
Equivalent Units
Beginning Inventory (7,000 4,20
66. Refer to Ryan Company. Compute the number of units started and * 60%) 0
completed in March. Started and Completed 29,50
a. 29,500 (29,500) 0
b. 34,500 Ending Inventory (2,500 * 62
c. 36,500 25%) 5
d. 39,000 34,32 equivalent
5 units

ANS: A
DIF: Moderate OBJ: 6-2,6-4
Units started this period 32,000

190
69. Refer to Ryan Company. Calculate equivalent units of production for
material using weighted average. Beginning Work in Process Inventory
a. 32,000 (45% complete as to conversion) 10,000 units
b. 34,325 Started this period 120,000 units
c. 37,125 Ending Work in Process Inventory
d. 39,000 (80% complete as to conversion) 8,200 units

Beginning Work in Process Inventory Costs:

ANS: D Material $24,500
Conversion 68,905
Equivalent Units
Beginning Inventory (7,000 units) Current Period Costs:
7,000 Material $ 75,600
Started this Period (32,000) Conversion 130,053
32,000
equivalent units
39,000 71. Refer to Maxwell Company. How many units must be accounted for?
a. 118,200
b. 128,200
c. 130,000
DIF: Easy OBJ: 6-2,6-3 d. 138,200
70. Refer to Ryan Company. Calculate equivalent units of production for
conversion using weighted average. ANS: C
a. 34,325
Beginning Work in Process 10,000
b. 37,125
c. 38,375 Units Started 120,000
d. 39,925 Total Units 130,000

ANS: B DIF: Easy OBJ: 6-2

Equivalent Units
Beginning Inventory (7,000 * 72. Refer to Maxwell Company. What is the total cost to account for?
100%) 7,000 a. $ 93,405
Started and Completed b. $205,653
(29,500) 29,500 c. $274,558
Ending Inventory (2,500 * d. $299,058
25%) 625
equivalent units
37,125 ANS: D

BWIP: Materials $ 24,500

DIF: Moderate OBJ: 6-2,6-3 BWIP: Conversion 68,905
Current Period: Materials 75,600
Maxwell Company Current Period: Conversion 130,053
Total Costs $299,058
Maxwell Company adds material at the start of production. The following
production information is available for June:

191
 DIF: Easy OBJ: 6-2 b. 120,000
c. 125,500
73. Refer to Maxwell Company. How many units were started and completed in d. 130,000
the period?
a. 111,800
b. 120,000 ANS: B
c. 121,800
d. 130,000 Equivalent Units
Beginning Inventory 0
(Ignored for FIFO)
ANS: A Started and Completed 111,800
(111,800)
Units started this period 120,000 Ending Inventory 8,200
Less: Ending Work in Process 8,200 (8,200 * 25%)
120,000 equivalent units
Units started and completed this 111,800
period

DIF: Easy OBJ: 6-4

DIF: Easy OBJ: 6-2
76. Refer to Maxwell Company. What are the equivalent units for conversion
74. Refer to Maxwell Company. What are the equivalent units for material using using the weighted average method?
the weighted average method? a. 120,000
a. 120,000 b. 123,440
b. 123,860 c. 128,360
c. 128,360 d. 130,000
d. 130,000
ANS: C
ANS: D
Beginning Work in Process 10,000 45% 4,500
Equivalent Units + Completion of Units in Process 10,000 55% 5,500
Beginning Inventory (10,000 * 100%) 1 + Units Started and Completed 111,800 100% 111,800
0,000 + Ending Work in Process 8,200 80% 6,560
Started and Completed (111,800) 11
1,800 Equivalent Units of Production 128,360
Ending Inventory (8,200 * 25%)
8,200
13 equivalent DIF: Moderate OBJ: 6-2,6-3
0,000 units
77. Refer to Maxwell Company. What are the equivalent units for conversion
using the FIFO method?
DIF: Easy OBJ: 6-3 a. 118,360
b. 122,860
75. Refer to Maxwell Company. What are the equivalent units for material using c. 123,860
the FIFO method? d. 128,360
a. 111,800

192
 Beginning $ 68,905
ANS: C
Current Period 130,053
Beginning Work in Process (ignored) 10,000 0% - 198,958 ÷ 128,360 = $ 1.55
+ Completion of Units in Process 10,000 55% 5,500
units per unit
+ Units Started and Completed 111,800 100% 111,800
+ Ending Work in Process 8,200 80% 6,560
Equivalent Units of Production 123,860 DIF: Moderate OBJ: 6-3

80. Refer to Maxwell Company. What is the cost of units completed using the
weighted average?
DIF: Moderate OBJ: 6-2,6-4 a. $237,510
b. $266,742
78. Refer to Maxwell Company. What is the material cost per equivalent unit c. $278,400
using the weighted average method? d. $282,576
a. $.58
b. $.62
c. $.77 ANS: D
d. $.82
Units Completed Costs per Equivalent Unit Total
121,800 (1.55 + .77) = $2.32 $282,576
ANS: C

Material Costs:
DIF: Difficult OBJ: 6-3
Beginning $ 24,500
81. Refer to Maxwell Company. What is the conversion cost per equivalent unit
Current Period 75,600
using the FIFO method?
100,100 ÷ 130,000 = $ 0.77 a. $1.05
b. $.95
units per unit c. $1.61
d. $1.55

DIF: Moderate OBJ: 6-3

ANS: A
79. Refer to Maxwell Company. What is the conversion cost per equivalent unit
using the weighted average method? Conversion Costs:
a. $1.01 Beginning (Ignored)
b. $1.05
c. $1.55 Current Period 130,053
d. $1.61
130,053 ÷ 123,860 = $ 1.05
units per unit
ANS: B

Conversion Costs:
DIF: Moderate OBJ: 6-4

193
82. Refer to Maxwell Company. What is the cost of all units transferred out Weighted Average Material A Material B
using the FIFO method? Beginning Work in Process 700 700
a. $204,624
b. $191,289 Units Started and Completed 1500 1500
c. $287,004 Ending Work in Process 500 250
d. $298,029 EUP Materials 2700 2450

ANS: C
DIF: Easy OBJ: 6-2,6-3
Units Completed Costs per Equivalent Unit Total
121,800 (1.05 + .63) = $1.68 $204,624 84. Refer to Cherub Company Assuming a FIFO method of process costing,
compute EUP units for Materials A and B.
a. 2,700 and 2,280, respectively
DIF: Difficult OBJ: 6-4 b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
Cherub Co. d. 2,450 and 2,880, respectively
Beginning inventory (30% 700 units
complete as to Material B and
60% complete for conversion) ANS: C
Started this cycle 2,000 units
Ending inventory (50% 500 units FIFO Material A Material B
complete as to Material B and Beginning Work in 0 490
80% complete for conversion) Process
Beginning inventory Units Started and 1500 1500
costs: Completed
Material A $14,270 Ending Work in Process 500 250
Material B 5,950 EUP Materials 2000 2240
Conversion 5,640

Current Period costs:

Material A $40,000 DIF: Moderate OBJ: 6-2,6-4
Material B 70,000
Conversion 98,100 85. Refer to Cherub Company Assuming a weighted average method of process
costing, compute EUP for conversion.
Material A is added at the start of production, while Material B is added a. 2,600
uniformly throughout the process. b. 2,180
c. 2,000
83. Refer to Cherub Company. Assuming a weighted average method of d. 2,700
process costing, compute EUP units for Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively ANS: A
c. 2,000 and 2,240, respectively
d. 2,240 and 2,700, respectively Weighted Average
Beginning Work in Process 700
ANS: B Units Started and Completed 1500
Ending Work in Process 400

194
 2600 DIF: Moderate OBJ: 6-2,6-3

88. Refer to Cherub Company Assuming a FIFO method of process costing,

compute the average cost per EUP for Material A.
DIF: Moderate OBJ: 6-2,6-3
a. $31.25
b. $20.10
86. Refer to Cherub Company Assuming a FIFO method of process costing,
c. $20.00
compute EUP for conversion.
d. $31.00
a. 2,240
b. 2,180
c. 2,280
ANS: C
d. 2,700
Material A Costs Equivalent Average Cost
ANS: B (Current Period) Units per EUP
$40,000 2,000 $20.00
FIFO
Beginning Work in Process (700 * 40%) 280 DIF: Moderate OBJ: 6-2,6-4
Units Started and Completed 1500
Ending Work in Process (500 * 80%) 400 89. Refer to Cherub Company Assuming a FIFO method of process costing,
compute the average cost per EUP for Material B.
2180 a. $20.10
b. $31.25
c. $20.00
DIF: Moderate OBJ: 6-2,6-4 d. $31.00

87. Refer to Cherub Company Assuming a weighted average method of process

costing, compute the average cost per unit for Material A. ANS: B
a. $20.10
b. $20.00 Material B Costs Equivalent Average Cost
c. $31.25 (Current Period) Units per EUP
d. $31.00 $70,000 2,240 $31.25

ANS: A DIF: Moderate OBJ: 6-2,6-4

Weighted Average: 90. Refer to Cherub Company Assuming a weighted average method of process
Material A costing, compute the average cost per EUP for Material B.
Beginning $ a. $20.00
14,270 b. $31.25
Current 40,00 c. $20.10
Period 0 d. $31.00
54,27 ÷ 2,700 = $ 20.10
0
units per unit ANS: D

Material B Costs Equivalent Average Cost

195
 (Beginning Units per EUP Beginning Work in Process Costs of Beginning Work in
Inventory and Process:
Current Period) (75% complete) 14,500 units Material $25,100
$75,950 2,450 $31.00 Started 75,000 units 50,000
Conversion
Ending Work in Process Current
DIF: Moderate OBJ: 6-2,6-3 Costs:
(60% complete) 16,000 units Material $120,000
91. Refer to Cherub Company Assuming a FIFO method of process costing, Abnormal spoilage 2,500 units 300,000
compute the average cost per EUP for conversion. Conversion
a. $45.50 Normal spoilage 5,000 units
b. $45.00 (continuous)
c. $43.03 Transferred out 66,000 units
d. $47.59
All materials are added at the start of production.

ANS: B 93. Refer to Talmidge Company. Using weighted average, what are equivalent
Conversion Costs Equivalent Average Cost units for material?
(Current Period) Units per EUP a. 82,000
$98,100 2,180 $45.00 b. 89,500
c. 84,500
d. 70,000
DIF: Moderate OBJ: 6-2,6-4
ANS: C
92. Refer to Cherub Company Assuming a weighted average method of process
costing, compute the average cost per EUP for conversion.
a. $39.90 Materials: Weighted Units % Complete Eq. Units
b. $45.00 Average
c. $43.03 Beginning Work in Process 14,50 100% 14,500
d. $47.59 0
+ Units Started and 51,50 100% 51,500
Completed 0
+ Ending Work in Process 16,00 100% 16,000
ANS: A
0
Conversion Costs Equivalent Average Cost
+ Abnormal Spoilage 2,50 100% 2,500
(Beginning WIP and Units per EUP
0
Current Period)
Equivalent Units of 84,500
$98,100 + $5,640 2,600 $39.90 Production

DIF: Easy OBJ: 6-2,6-3,6-8

DIF: Moderate OBJ: 6-2,6-3
94. Refer to Talmidge Company. Using weighted average, what are equivalent
Talmidge Company
units for conversion costs?
a. 80,600
The following information is available for Talmidge Company for the current
b. 78,100
year:
c. 83,100
d. 75,600

196
 c. $4.48
d. $4.34
ANS: B

Conversion: Weighted Units % Complete Eq Units ANS: C

Average
Beginning Work in Process 14,50 100% 14,500 Weighted Average:
0 Conversion
+ Units Started and 51,50 100% 51,500 Beginning $
Completed 0 50,000
+ Ending Work in Process 16,00 60% 9,600 Current Period 300,00
0 0
+ Abnormal Spoilage 2,50 100% 2,500 350,00 ÷ 78,100 = $
0 0 4.48
Equivalent Units of 78,100 units per unit
Production

DIF: Moderate OBJ: 6-2,6-3

DIF: Easy OBJ: 6-2,6-3,6-8
97. Refer to Talmidge Company. What is the cost assigned to normal spoilage
95. Refer to Talmidge Company. What is the cost per equivalent unit for using weighted average?
material using weighted average? a. $31,000
a. $1.72 b. $15,500
b. $1.62 c. $30,850
c. $1.77 d. None of the responses are correct
d. $2.07

ANS: D
ANS: A No costs are assigned to normal, continuous spoilage. Higher costs are
assigned to good units produced.
Weighted Average:
Materials
Beginning $ DIF: Easy OBJ: 6-8
25,100
Current Period 120,00 98. Refer to Talmidge Company. Assume that the cost per EUP for material and
0 conversion are $1.75 and $4.55, respectively. What is the cost assigned to
145,10 ÷ 84,500 = $ ending Work in Process?
0 1.72 a. $100,800
units per unit b. $87,430
c. $103,180
d. $71,680
DIF: Moderate OBJ: 6-2,6-3

96. Refer to Talmidge Company. What is the cost per equivalent unit for ANS: D
conversion costs using weighted average?
a. $4.62 Equivalent Cost per Total
b. $4.21 Units Equivalent Unit

197
 16,000 $1.75 $28,000 + Ending Work in 16,00 60% 9,600
9,600 $4.55 $43,680 Process 0
$71,680 + Abnormal Spoilage 2,50 100% 2,500
0
Equivalent Units of 67,225
DIF: Easy OBJ: 6-2,6-3 Production

99. Refer to Talmidge Company. Using FIFO, what are equivalent units for
material? DIF: Easy OBJ: 6-2,6-3,6-8
a. 75,000
b. 72,500 101. Refer to Talmidge Company. Using FIFO, what is the cost per equivalent unit
c. 84,500 for material?
d. 70,000 a. $1.42
b. $1.66
c. $1.71
d. $1.60
ANS: D

Materials: FIFO ANS: C

Beginning Work in Process - 0% -
+ Units Started and 51,50 100% 51,500 FIFO: Materials
Completed 0
+ Ending Work in Process 16,00 100% 16,000
Current $
0
Period 120,000
+ Abnormal Spoilage 2,50 100% 2,500
120,00 ÷ 70,000 = $
0
0 1.71
Equivalent Units of 70,000
units per unit
Production

DIF: Easy OBJ: 6-2,6-4,6-8 DIF: Easy OBJ: 6-2,6-4

100. Refer to Talmidge Company. Using FIFO, what are equivalent units for 102. Refer to Talmidge Company. Using FIFO, what is the cost per equivalent unit
conversion costs? for conversion costs?
a. 72,225 a. $4.46
b. 67,225 b. $4.15
c. 69,725 c. $4.30
d. 78,100 d. $3.84

ANS: B ANS: A

Conversion: FIFO FIFO: Conversion

Beginning Work in 14,50 25% 3,625
Process 0 Current $
+ Units Started and 51,50 100% 51,500 Period 300,000
Completed 0 300,00 ÷ 67,225 = $

198
 0 4.46 All materials are added at the start of the production process. Bowman
units per unit Company inspects goods at 75 percent completion as to conversion.

104. Refer to Bowman Company. What are equivalent units of production for
material, assuming FIFO?
DIF: Easy OBJ: 6-2,6-4 a. 100,000
b. 96,500
103. Refer to Talmidge Company. Assume that the FIFO EUP cost for material and c. 95,000
conversion are $1.50 and $4.75, respectively. Using FIFO what is the total d. 120,000
cost assigned to the units transferred out?
a. $414,194
b. $339,094 ANS: A
c. $445,444 Materials: FIFO
d. $396,975
Beginning Work in Process - 0% -
+ Units Started and 77,00 100% 77,000
ANS: A Completed 0
+ Normal Spoilage-- 3,50 100% 3,500
Transferred Out Units: Equiv Cost per Total Discrete 0
FIFO Units Equiv Unit + Abnormal Spoilage 5,00 100% 5,000
0
Beginning Work in Process 75,100 + Ending Work in Process 14,50 100% 14,500
+ Completion of Beginning (14,500 3,625 4.75 17,219 0
Inventory * 25%) Equivalent Units of 100,000
+Units Started and 51,500 6.25 321,875 Production
Completed
Equivalent Units of 414,194
Production DIF: Moderate OBJ: 6-2,6-4,6-8

105. Refer to Bowman Company. What are equivalent units of production for
DIF: Difficult OBJ: 6-2,6-4 conversion costs, assuming FIFO?
a. 108,900
Bowman Company b. 103,900
c. 108,650
Bowman Company has the following information for July: d. 106,525

Units started 100,000 units

Beginning Work in Process: (35% 20,000 units ANS: D
complete)
Normal spoilage (discrete) 3,500 units Conversion: FIFO
Abnormal spoilage 5,000 units Beginning Work in Process 20,00 65% 13,000
Ending Work in Process: (70% 14,500 units 0
complete) + Units Started and 77,00 100% 77,000
Transferred out 97,000 units Completed 0
Beginning Work in Process Costs: +Normal Spoilage-- 3,50 75% 2,625
Material $15,000 Discrete 0
Conversion 10,000 + Abnormal Spoilage 5,00 75% 3,750
0

199
 + Ending Work in Process 14,50 70% 10,150 +Normal Spoilage--Discrete- 3, 1.00 3,500
0 Materials 500
Equivalent Units of 106,525 +Normal Spoilage--Discrete- 2, 1.50 3,938
Production Conversion 625
Equivalent Units of Production 244,438

DIF: Moderate OBJ: 6-2,6-4,6-8 DIF: Difficult OBJ: 6-2,6-4,6-8

106. Refer to Bowman Company. Assume that the costs per EUP for material and 108. Refer to Bowman Company. What are equivalent units of production for
conversion are $1.00 and $1.50, respectively. What is the amount of the material assuming weighted average is used?
period cost for July using FIFO? a. 107,000
a. $0 b. 116,500
b. $9,375 c. 120,000
c. $10,625 d. 115,000
d. $12,500

ANS: C
ANS: C
Materials: Weighted
Average
Abnormal spoilage is a Beginning Work in Process 20, 100% 20,000
period cost. 000
+ Units Started and 77, 100% 77,000
Completed 000
Materials 5,000 * $1.00/unit $5,000 + Normal Spoilage--Discrete 3, 100% 3,500
Conversion Costs 3,750 * $1.50/unit 5,625 500
Total Abnormal Spoilage $10,625 + Abnormal Spoilage 5, 100% 5,000
000
+ Ending Work in Process 14, 100% 14,500
DIF: Moderate OBJ: 6-2,6-8 500
Equivalent Units of 120,000
107. Refer to Bowman Company. Assume that the costs per EUP for material and Production
conversion are $1.00 and $1.50, respectively. Using FIFO, what is the total
cost assigned to the transferred-out units (rounded to the nearest dollar)?
a. $245,750 DIF: Easy OBJ: 6-2,6-3,6-8
b. $244,438
c. $237,000 109. Refer to Bowman Company. What are equivalent units of production for
d. $224,938 conversion costs assuming weighted average is used?
a. 113,525
b. 114,400
ANS: B c. 114,775
Transferred Out Units: FIFO d. 115,650
Beginning Work in Process 25,000
+ Completion of Beginning (20,000 13, 1.50 19,500
Inventory * 65%) 000 ANS: A
+ Units Started and Completed 77, 2.50 192,500
000 Conversion: Weighted
Average

200
 Beginning Work in Process 20, 100% 20,000
000 Ending Inventory: Weighted
+ Units Started and 77, 100% 77,000 Average
Completed 000 Materials 14,500 $1.00 $ 14,500.00
+Normal Spoilage-- 3, 75% 2,625 Conversion (14,500 * 70%) 10,150 1.50 15,225.00
Discrete 500
+ Abnormal Spoilage 5, 75% 3,750 Total $ 29,725.00
000
+ Ending Work in Process 14, 70% 10,150
500
Equivalent Units of 113,525 DIF: Easy OBJ: 6-2,6-3
Production
Jones Company
DIF: Easy OBJ: 6-2,6-3,6-8 The following information is available for Jones Company for April:
110. Refer to Bowman Company. Assume that the costs per EUP for material and Started this month 80,000 units
conversion are $1.00 and $1.50, respectively. What is the cost assigned to Beginning WIP
normal spoilage, using weighted average, and where is it assigned? (40% complete) 7,500 units
Normal spoilage (discrete) 1,100 units
Value Assigned To Abnormal spoilage 900 units
Ending WIP
a. $7,437.50 Units transferred out and Ending Inventory (70% complete) 13,000 units
b. $7,437.50 Units transferred out Transferred out 72,500 units
c. $8,750.00 Units transferred out and Ending Inventory
d. $8,750.00 Units transferred out Beginning Work in Process Costs:
Material $10,400
Conversion 13,800
ANS: B Current Costs:
Equivalent Cost per Total Material $120,000
Units Equivalent Unit Conversion 350,000
3,500 $1.00 $3,500.00
2,625 $1.50 3,937.50 All materials are added at the start of production and the inspection point is
at the end of the process.
$7,437.50
This amount is transferred out.
112. Refer to Jones Company. What are equivalent units of production for
material using FIFO?
DIF: Easy OBJ: 6-2,6-3,6-8
a. 80,000
b. 79,100
111. Refer to Bowman Company. Assume that the costs per EUP for material and
c. 78,900
conversion are $1.00 and $1.50, respectively. Assuming that weighted
d. 87,500
average is used, what is the cost assigned to ending inventory?
a. $29,725.00
b. $37,162.50
ANS: A
c. $38,475.00
d. $36,250.00
Materials: FIFO

ANS: A Beginning Work in Process - 0% -

201
 65, d. 85,500
+ Units Started and Completed 000 100% 65,000
13,
+ Ending Work in Process 000 100% 13,000 ANS: B
1,
+ Normal Spoilage (discrete) 100 100% 1,100 Materials: Weighted Average Units % EUP
Complet
+ Abnormal Spoilage 900 100% 900 e
Equivalent Units of Production 80,000 7
Beginning Work in Process 7,500 100% ,500
65,
+ Units Started and Completed 000 100% 65,000
DIF: Moderate OBJ: 6-2,6-4,6-8 13,
+ Ending Work in Process 000 100% 13,000
113. Refer to Jones Company. What are equivalent units of production for
1,
conversion costs using FIFO? + Normal Spoilage (discrete) 100 100% 1,100
a. 79,700
b. 79,500
+ Abnormal Spoilage 900 100% 900
c. 81,100
d. 80,600 Equivalent Units of Production 87,500

ANS: D DIF: Easy OBJ: 6-2,6-3,6-8

115. Refer to Jones Company. What are equivalent units of
Conversion: FIFO % production for conversion costs using weighted average?
Units Complet EUP a. 83,600
e b. 82,700
7, c. 82,500
Beginning Work in Process 500 60% 4,500 d. 81,600
65,
+ Units Started and Completed 000 100% 65,000 ANS: A
13,
+ Ending Work in Process 000 70% 9,100 Conversion: FIFO %
1, Units Complet EUP
+ Normal Spoilage (discrete) 100 100% 1,100 e
7,
+ Abnormal Spoilage 900 100% 900 Beginning Work in Process 500 100% 7,500
Equivalent Units of Production 80,600 65,
+ Units Started and Completed 000 100% 65,000
13,
DIF: Moderate OBJ: 6-2,6-4,6-8 + Ending Work in Process 000 70% 9,100
1,
114. Refer to Jones Company. What are equivalent units of production for + Normal Spoilage (discrete) 100 100% 1,100
material using weighted average?
a. 86,600 + Abnormal Spoilage 900 100% 900
b. 87,500 Equivalent Units of Production 83,600
c. 86,400

202
 DIF: Easy OBJ: 6-2,6-3,6-8 c. $1.56
d. $1.44
116. Refer to Jones Company. What is cost per equivalent unit for material using
FIFO?
a. $1.63 ANS: A
b. $1.37
c. $1.50 Weighted Average:
d. $1.56 Materials
Beginning $ 10,400
Current Period 120,000
ANS: C
130,400 ÷ 87,500 = $ 1.49
FIFO: Materials units per unit

Current Period $ 120,000

DIF: Easy OBJ: 6-2,6-3
120,000 ÷ 80,000 = $ 1.50
units per unit 119. Refer to Jones Company. What is cost per equivalent unit for conversion
costs using weighted average?
DIF: Easy OBJ: 6-2,6-4 a. $4.19
b. $4.41
117. Refer to Jones Company. What is cost per equivalent unit for conversion c. $4.55
costs using FIFO? d. $4.35
a. $4.00
b. $4.19
c. $4.34 ANS: D
d. $4.38
Weighted
Average:
ANS: C Conversion
Beginning $ 13,800
FIFO: Conversion Current Period 350,000
363,800 ÷ 83,600 = $
Current Period $ 350,000 4.35
350,000 ÷ 80,600 = $ units per unit
4.34
units per unit
DIF: Easy OBJ: 6-2,6-3

120. Refer to Jones Company. What is the cost assigned to ending inventory
DIF: Easy OBJ: 6-2,6-4
using FIFO?
a. $75,920
118. Refer to Jones Company. What is cost per equivalent unit for material using
b. $58,994
weighted average?
c. $56,420
a. $1.49
d. $53,144
b. $1.63

203
 1,100 $5.84 $6,424
ANS: B Transferred
Out
Ending Inventory: FIFO

Materials 13,000 $ 1.50 $ 19,500.00 DIF: Moderate OBJ: 6-2,6-4,6-8

9,1
Conversion (13,000 * 70%) 00 4.34 39,494.00 123. Refer to Jones Company. What is the total cost assigned to goods
Total $ 58,994.00 transferred out using weighted average?
a. $435,080
b. $429,824
c. $428,656
DIF: Moderate OBJ: 6-2,6-4 d. $423,400

121. Refer to Jones Company. What is the cost assigned to abnormal spoilage
using FIFO? ANS: B
a. $1,350
b. $3,906 Price per
c. $5,256 Equivalent
Goods
d. $6,424 Unit Total
Transferred Out
73,600 $5.84 $429,824
ANS: C
DIF: Difficult OBJ: 6-2,6-3
Price per
Abnormal SHORT ANSWER
Equivalent
Spoiled Units
Unit Total
1. Discuss how spoilage is treated in EUP computations.
900 $5.84 $5,256
ANS:
If spoilage is normal and continuous, the calculations for EUP do not include
DIF: Moderate OBJ: 6-2,6-4,6-8 this spoilage (method of neglect), and the good units simply absorb the
cost of such spoilage. If spoilage is normal and discrete, the equivalent
122. Refer to Jones Company. What is the cost assigned to normal spoilage and units are used in the EUP calculations, and the spoilage cost is assigned to
how is it classified using weighted average? all units that passed through the inspection point during the current period.
a. $6,193 allocated between WIP and Transferred Out If the spoilage is abnormal and either discrete or continuous, the equivalent
b. $6,424 allocated between WIP and Transferred Out units are used in EUP calculations and costed at the cost per EUP; the total
c. $6,193 assigned to loss account cost is then assigned to a loss account.
d. $6,424 assigned to units Transferred Out
DIF: Moderate OBJ: 6-8

ANS: D 2. Discuss the assignment of costs to transferred-out inventories in both

process costing methods.
Price per
Normal ANS:
Equivalent
Spoiled
Unit Total
Units

204
 The assignment of costs in a process costing system first involves One alternative method of calculating equivalent units for weighted
determining total production costs. These costs are then assigned to units average is to determine units transferred out and add to that the equivalent
completed and transferred out during the period and to the units in Work in units of ending work in process. Another alternative method of calculating
Process Inventory at the end of the period. To assign costs, the cost per equivalent units for FIFO is to determine equivalent units of production
equivalent unit must be established using either the FIFO or weighted under weighted average and subtract the beginning work in process
average method. The cost per EUP is then multiplied by the number of equivalent units that were completed in the last period. Both of these
equivalent units in the component being costed. Transferred-out costs using methods may be used to "check" original answers.
the weighted average method are computed as the number of units
transferred times the total price per equivalent unit. When using FIFO, DIF: Moderate OBJ: 6-7
transferred-out units are computed as follows: the costs in beginning WIP
are added to the current period costs to complete the units which sums to 6. Discuss how spoilage is treated in EUP computations.
the total cost of beginning WIP; the units started and completed are priced
at current period costs; the total of the costs of beginning inventory and ANS:
units started and completed are then transferred out. If spoilage is normal and continuous, the calculations for EUP do not include
this spoilage (method of neglect), and the good units simply absorb the
DIF: Moderate OBJ: 6-3,6-4 cost of such spoilage. If spoilage is normal and discrete, the equivalent
units are used in the EUP calculations, and the spoilage cost is assigned to
3. Discuss process costing in a multi-department atmosphere. all units that passed through the inspection point during the current period.
If the spoilage is abnormal and either discrete or continuous, the equivalent
ANS: units are used in EUP calculations and costed at the cost per EUP; the total
When a business has more than one department in its production process, cost is then assigned to a loss account.
products are transferred from Department A to Department B and so on. As
the products are transferred from department to department so, too, must DIF: Moderate OBJ: 6-8
the costs be transferred. When products are transferred, the units and
costs are treated as input material in the next department. The 7. Discuss why units are lost during production.
new department may add additional material or may simply add conversion
costs and finish the products. The total cost of the products is a cumulative ANS:
total from all departments within the process. In most production processes, losses are anticipated to a certain degree.
Losses may be classified as normal and abnormal depending on
DIF: Moderate OBJ: 6-3 management's expectations. A normal loss is one that is expected, while an
abnormal loss is one that exceeds the normal loss. The losses may result in
4. Discuss standard costing as used in conjunction with process costing. spoiled or defective units. Spoiled units cannot be economically reworked;
defective units can be. Losses can occur on a continuous or a discrete
ANS: basis. Quality control points are established at the end of and/or within the
When standard costing is used in conjunction with process costing, the process to inspect goods and remove from further processing those units
costing procedure is simplified. Standard costing eliminates the calculation that are either spoiled or defective.
in each new period of a new production cost because the standards are
established as on going norms for (at least) a one-year period of time. DIF: Moderate OBJ: 6-8
Standard costing in a process costing system is essentially a FIFO system
that permits variances to be recognized during the period. PROBLEM

DIF: Moderate OBJ: 6-5 Landers Company

5. What are two alternative calculations that can be used to either check an Landers Company has the following information available for May:
equivalent units answer or to obtain the answer initially?
Beginning Work in Process Inventory
ANS: (25% complete as to conversion) 10,000 units
Started 120,000 units

205
 Ending Work in Process Inventory S&C 90,000 90,000 TO 100,000 100,000
(30% complete as to conversion) 30,000 units EWIP 30,000 9,000 EI 30,000 9,000
EUP 120,000 106,500 EUP 130,000 109,000
Beginning Work in Process Inventory
Costs:
Material $ 2,100 DIF: Moderate OBJ: 6-3,6-4
Conversion 2,030
2. Refer to Landers Company. Prepare a schedule showing the computation for
Current Period Costs: cost per equivalent unit assuming the (a) FIFO and (b) weighted average
Material $ 33,000 method.
Conversion 109,695
ANS:
All material is added at the start of production and all products completed
are transferred out. Landers Company
Schedule of Average Cost Per Unit
1. Refer to Landers Company. Prepare an equivalent units schedule using the FIFO and Weighted Average
(a) FIFO and (b) weighted average method. May 31, 20X5

ANS: (a) FIFO (b) Weighted Average

Mat. CC Mat. CC
Landers Company Costs $33,000 $109,695 $ 35,100 $111,725
Schedule of Equivalent Units for Eq Units 120,000 106,500 130,000 109,000
Fifo and Weighted Average $.275/eq unit $ 1.03/eq $ .27/eq $ 1.025/eq
May 31, 20X5 unit unit unit
Total cost/eq. $ 1.305/e $ 1.295/eq
FIFO Weighted unit q unit unit
Average
Beginning 10,000 Beginning 10,000 DIF: Moderate OBJ: 6-3,6-4
Work In Work In
Process Process 3. Refer to Landers Company. Prepare a schedule showing the assignment of
Units Started 120,000 Units Started 120,000 costs assuming the (a) FIFO and (b) weighted average method.
Units to Acct. 130,000 Units to Acct. 130,000
For For ANS:
Beginning 10,000 Transferred 100,000 Landers Company
Work In Out Schedule of Assigned Costs
Process FIFO and Weighted Average
Started & 90,000 Ending Work 30,000 May 31, 20X5
Completed in Process
Ending Work 30,000 Units 130,000 (a) FIFO
in Process Accounted Beginning Work in Process $ 4,130
For To complete (7,500 x $1.03) = 7,725
Units 130,000 $ 11,855
Accounted For
Started and Completed
90,000 x $1.305 = 117,450
(a) FIFO (b) Weighted Average Total costs transferred out $129,305
Mat. CC Mat. CC
BWIP 0 7,500

206
 Ending Work in Process a. Cooking
30,000 x $ .275 = $ 8,250 Department
9,000 x $1.03 = 9,270 Materials Conversion
$ 17,520 Costs
Transferred Out 17,100 17,100
Total costs accounted for $146,825 Ending Work in 2,400 1,440
(b) Weighted Average Process
Completed TOTAL EUP 19,500 18,540
100,000 x $1.295 = $129,500
Ending Work in Process Packaging
30,000 x $ .27 = $ 8,100 Department
9,000 x $1.025 = 9,225 Transferred In Materials. Conversion
$ 17,325 Costs
Total costs accounted for $146,825 Transferred Out 17,600 17,600 17,600
Ending Work in 500 400 400
Process
DIF: Difficult OBJ: 6-3,6-4 TOTAL EUP 18,100 18,000 18,000

4. The Sweet Temptations Company has two processing departments, Cooking b. Cooking
and Packaging. Ingredients are placed into production at the beginning of Department
the process in Cooking, where they are formed into various shapes. When Materials ConversionC
finished, they are transferred into Packaging, where the candy is placed osts
into heart and tuxedo boxes and covered with foil. All material added in Beginning Work in 0 3,150
Packaging is considered as one material for convenience. Since the boxes Process
contain a variety of candies, they are considered partially complete until Transferred from 12,600 12,600
filled with the appropriate assortment. The following information relates to Cooking
the two departments for February 20X7: Ending Work in 2,400 1,440
Cooking Department: Process
Beginning WIP (30% complete as to 4,500 units TOTAL EUP 15,000 17,190
conversion)
Units started this period 15,000 units Packaging
Ending WIP (60% complete as to 2,400 units Department
conversion) Transferred In Materials Conversion
Packaging Department: Costs
Beginning WIP (90% complete as to 1,000 units Beginning Work in 0 100 200
material, 80% complete as to Process
conversion) Transferred from 16,600 16,600 16,600
Units started during period ? Cooking
Ending WIP (80% complete as to 500 units Ending Work in 500 400 400
material and 80% complete as to Process
conversion) TOTAL EUP 17,100 17,100 17,200

a. Determine equivalent units of production for both departments using the

weighted average method. DIF: Difficult OBJ: 6-3,6-4
b. Determine equivalent units of production for both departments using the
FIFO method. 5. The following costs were accumulated by Department 2 of Hughes
Company during April:
ANS:

207
 Cost b. FIFO inventory assumption
Transferred Material Conversio Total
from Dept. 1 n
Costs Dept 1 MAT CC
Beginning $ 17,050 $ 5,450 $ 22,500
Complete 20,000 20,000 20,000
Inventory
Eq-End WIP 5,000 0 2,000
Current Period 184,000 $ 34,000 104,000 322,000
- Eq-Begin (2,000) 0 (1,200)
Cost
EP-WA 23,000 20,000 20,800
$ 201,050 $ 34,000 $ 109,450 $344,500

Production for April in Department 2 (in units):

Unit $184,000 = $34,000 = $104,000 = = $14.70
$8.00 $1.70 $5.00
WIP-April 1 2,000 60% complete
Cost 23,000 20,000 20,800
Complete period transferred 20,000
WIP-April 30 5,000 40% complete
End WIP Dept 1 = 5,000 units x $8.00 = $40,000
Materials are not added in Department 2 until the very end of processing
CC = 2,000 units x $5.00 = 10,000
Department 2.
$50,000
Required: Compute the cost of units completed and the value of ending
COGM = $344,500 - $50,000 = $294,500
WIP for:
DIF: Moderate OBJ: 6-3,6-4
a. Weighted average inventory assumption
6. The formula for a chemical compound requires one pound of Chemical X
b. FIFO inventory assumption
and one pound of Chemical Y. In the simplest sense, one pound of Chemical
X is processed in Department A and transferred to Department B for further
processing where one pound of Chemical Y is added when the process is 50
ANS:
percent complete. When the processing is complete in Department B, the
finished compound is transferred to finished goods. The process is
a. Weighted average inventory
continuous, operating 24 hours a day.
assumption
Dept 1 MAT CC
Normal spoilage occurs in Department A. Five percent of material is lost in
Complete 20,000 20,000 20,000
the first few seconds of processing. No spoilage occurs in Department B.
Eq-End WIP 5,000 0 2,000
EP-WA 25,000 20,000 22,000
The following data are available for the month of August 20X6:

Dept. A Dept. B
Unit $201,050 = $34,000 = $109,450 = = $14.717
$8.042 $1.70 $4.975 Units in process, August 1 8,000 10,000
Cost 25,000 20,000 22,000 Stage of completion of beginning 3/4 3/10
inventory
Units started or transferred in 50,000 ?
End WIP Dept 1 = 5,000 x $8.042 = $40,210 Units transferred out 46,500 ?
CC = 2,000 units x $4.975 = 9,950 Units in process, August 31 ? ?
$50,160 Stage of completion of ending 1/3 1/5
inventory
COGM = $344,500 - $50,160 = $294,340 Units of Chemical Y added in 44,500
Department B

208
 Required: Cost Record:
a. Prepare a schedule showing finished equivalents for Work in process inventory,
Chemical X and for conversion cost for Department A September 1:
using the FIFO method. Preceding department cost $ 620
b. Determine for Department B the number of units of Processing cost 2,000 $2,620
good product completed during August and the number Cost from preceding department in 1,800
of units in process on August 31. September
c. Prepare a schedule for Department B showing finished Material cost for September 4,800
equivalents for preceding department cost, cost of Processing cost for September 10,200
Chemical Y, and conversion cost using the FIFO method.
Required: Determine the following for Department 2 under (a) weighted
average the method of costing and (b) the FIFO method of costing: (1) unit
ANS: costs for each cost component, (2) cost of production transferred to
finished goods, (3) cost of work in process inventory of September 30.
a. c.
Materials ConversionC PD Mat CC ANS:
osts
46,500 46,500 44,500 44,500 44,500 Equivalent TI Material Conv. cost
9,000 3,000 12,000 0 2,400 production
(8,000) (6,000) (10,000) 0 (3,000) Units complete 16,000 16,000 16,000
47,500 43,500 46,500 44,500 43,900 + Equiv. ending 6,000 0 4,000
WIP
b. Since the material in the second department goes in at the = Equiv. prod. 22,000 16,000 20,000
50 percent point and the ending WIP inventory is only at the average
20 percent point, units complete is the same as the - Equiv. begin. WIP (4,000) 0 (3,000)
equivalents of material 44,500, given that units started plus = Equiv. prod. FIFO 18,000 16,000 17,000
units in beginning WIP are equal to units complete plus
ending WIP 10,000 + 46,500 - 44,500 = 12,000 units in
ending WIP. Unit Cost Average Unit Cost FIFO
TI = $620 + 1,800 TI = $1,800
22,000 = $0.11 18,000 = $0.10
DIF: Moderate OBJ: 6-3,6-4

7. Quigley Company manufactures a specialized product. Department 2 adds Mat = $4,800 Mat = $4,800
new material to the units received from Department 1 at the end of 16,000 = $0.30 16,000 = $0.30
process. A normal loss occurs early in processing. Production and cost data
for Department 2 for the month of September are as follows:
CC = $2,000 + 10,200 CC = $10,200
Production record (in units): 20,000 = $0.61 17,000 = $0.60
In process, September 1-75% complete for 4,000
processing cost
Received from Department 1 20,000 End. WIP-WA End. WIP-FIFO
Completed and transferred to finished goods 16,000 PD 6,000 x $0.11 $ 660.00 6,000 x $0.10 $ 600.00
Lost in processing (normal) 2,000 = =
In process, September 30-2/3 complete for 6,000 CC 4,000 x $0.61 2,440.00 4,000 x $0.60 2,400.0
process cost = = 0
$3,100.0 $3,000.0

209
 0 0 Complete 33,600 33,600 33,600
+ Equiv WIP 10,500 10,500 4,200
Cost of Goods Complete + Normal Sp 1,680 1,680 1,680
+ Abnor Sp 420 420 420
WA FIFO 46,200 46,200 39,900
$19,420 - 3,100 = $16,320.00 $19,420 - 3,000 = $16,420.00

b. 33,600 x $9 $302,400 TC = 46,200 x $231,000

DIF: Moderate OBJ: 6-3,6-4 MSC: 15-20 min $5
1,680 x $9 15,120 46,200 x $1 46,200
8. Copperfield Manufacturing employs a weighted average process costing $317,520 39,900 x $3 119,700
system for its products. One product passes through three departments $396,900
(Molding, Assembly, and Finishing) during production. The following activity
took place in the Finishing Department during April 20x6.
c. 10,500 x $5 $52,500
Units in beginning inventory 4,200 10,500 x $1 10,500
Units transferred in from 42,000 4,200 x $3 12,600
Assembly $75,600
Units spoiled 2,100
Good units transferred out 33,600 COGM = $396,900 - 75,600 - 3,780 = $317,520
d. $5 = $18,900 + X
The costs per equivalent unit of production for each cost failure area as 46,200
follows:
X = $231,000 - 18,900 = $212,100
Cost of prior departments $5.00
Raw material 1.00 e. ABN = 420 x $9 = $3,780
Conversion 3.00 420 x $9 = $3,780
Total cost per EUP $9.00
DIF: Moderate OBJ: 6-3,6-8
Raw material is added at the beginning of the Finishing process without
changing the number of units being processed. Work in process inventory
was 40 percent complete as to conversion on April 30. All spoilage was
discovered at final inspection. Of the total units spoiled, 1,680 were within
normal limits.

Required:
a. Calculate the equivalent units of production
b. Determine the cost of units transferred out of Finishing
c. Determine the cost of ending Work in Process Inventory
d. The portion of the total transferred in cost associated with beginning
Work in Process Inventory amounted to $18,900. What is the current period
cost that was transferred in from Assembly to Finishing?
e. Determine the cost associated with abnormal spoilage for the month.

ANS:
a.

TI Mat CC

210
 + abnormal 200 0 60 30
9. Ashcroft Industries manufactures wood furniture. In the Lamination 8,450 6,750 7,410 7,080
Department, varnish is added when the goods are 60 percent complete as Unit
to overhead. The units that are spoiled during processing are found upon Cost
inspection at the end of production. Spoilage is considered discrete.
End WIP
Production Data for May 20X8
Beginning inventory (80% 1,000 units DL 600 x $3.40 = $ 2,040
complete as to labor, 70% MOH 300 x $8.80 = 2,640
complete as to overhead) TI 1,500 x $9.00 = 13,500
Transferred in during month 7,450 units $18,180
Ending inventory (40% complete 1,500 units
as to labor, 20% complete as to
overhead) Abnormal Loss 60 x $3.40 = $ 204
Normal spoilage (found during 100 units DL 30 x $8.80 = 264
final quality inspection) MOH 200 x $9.00 = 1,800
Abnormal spoilage-found at 30% 200 units TI $ 2,268
completion of direct labor and
15% of conversion; the sanding COGM = $171,513 - 18,180 - 2,268 = $151,065
machine was misaligned and
scarred the chairs DIF: Moderate OBJ: 6-3,6-8

All other units were transferred to finished goods 10. Consider the following data for a cooking department for the month of
January:
Cost Data for May 20X8
Beginning work in process Physical
inventory: Units
Prior department costs $7,510 Work in process, beginning inventory* 11,000
Varnish 950 Started during current period 74,000
Direct labor 2,194 To account for 85,000
Overhead 5,522 $ 16,176 Good units completed and transferred out during
Current period costs: current period:
Prior department costs $68,540 From beginning work in process 11,000
Varnish 7,015 Started and completed 50,000
Direct labor 23,000 Good units completed 61,000
Overhead 56,782 155,337 Spoiled units 8,000
Work in process, ending inventory~ 16,000
Total costs to account for $171,513 Accounted for 85,000

Required: Determine the proper disposition of the May 20X8 costs for the *Direct material, 100% complete; conversion costs, 25% complete
Laminating Department using the weighted average method. ~Direct material, 100% complete; conversion costs, 75% complete
Inspection occurs when production is 100 percent completed. Normal
ANS: spoilage is 11 percent of good units completed and transferred out during
the current period.
TI MAT DL MOH
The following cost data are available:
Complete 6,650 6,650 6,650 6,650
Work in process, beginning
+ end 1,500 0 600 300
inventory:
+ normal 100 100 100 100

211
 Direct material $220,000
Conversion costs 30,000 $ 250,000 The following production cost data are applicable for operations for August
Costs added during current period: 20X7:
Direct material 1,480,000
Conversion costs 942,000 Department 1 Production Data
Costs to account for $2,672,000 Beginning inventory (65% complete) 1,000
Units started 25,000
Required: Prepare a detailed cost of production report. Use the FIFO Units completed 22,000
method. Distinguish between normal and abnormal spoilage. Units in ending inventory (40% 2,800
complete)
ANS: Department 1 Cost Data
Normal Sp = 11% x 61,000 = 6,710 units FIFO Beginning inventory:
Abnormal Sp = 8,000 - 6,710 = 1,290 units Material $ 1,550
Conversion 2,300 $ 3,850
Mat CC Mat = $1,480,000 = $22.00
Current period:
67,290 Material $38,080
Complete 61,000 61,000 Conversion 78,645 116,725
+ End 16,000 12,000 Total costs to account for $120,575
+ Ab Sp 1,290 1,290 CC = $942,000 = 13.17
- Ave 78,290 74,290 71,540 $35.17 Department 2 Production Data
- Beg (11,000) (2,750) Beginning inventory (90% complete) 8,000
FIFO 67,290 71,540 Units transferred in 22,000
WIP Units completed 24,000
Materi 16,000 x $352,000 Units in ending inventory (20% 4,500
al $22.00 complete)
CC 12,000 x 158,040 Department 2 Cost Data
$13.17 Beginning inventory:
$510,040 Transferred in $40,800
Loss = 1,290 x $35.17 45,369 Material 24,000
Conversion 4,320 $ 69,120*
COGM = $2,672,000 - 510,040 - 45,369 = Current period:
$2,116,591 Transferred in $113,700
Material` 53,775
DIF: Moderate OBJ: 6-3,6-8 Conversion 11,079 178,554
Total costs to account for $247,674
11. Lumberton Industries has two departments. Department 1 uses FIFO
costing and Department 2 uses weighted average. *This may not be the same amount determined for Department 1; ignore
any difference and use this figure.
Units are introduced into the process in Department 1 (this is the only
material added in Department 1). Spoilage occurs continuously through the Required:
department and normal spoilage should not exceed 10 percent of the units a. Compute the equivalent units of production in each department.
started. b. Determine the cost per equivalent unit in each department and
compute the cost transferred out, the cost in ending inventory,
Department 2 adds material (packaging) at the 75 percent completion and the cost of spoilage (if necessary).
point; this material does not cause an increase in the number of units being
processed. A quality control inspection takes place when the goods are 80
percent complete. Spoilage should not exceed 5 percent of the units ANS:
transferred in from Department 1.

212
a. 6 $5.15
1 $3,469

Mat CC Mat = $38,08 = $ 1.60 COGM = $247,674 - 23,706 - 3,469 = $220,499

0
23,80 DIF: Moderate OBJ: 6-3, 6-8
0
Complete 22,000 22,00 12. Orange Company manufactures a single product. All material is added at
0 the beginning of the process.
+ End 2,800 1,12 (2,800 CC = $78,64 = $ 3.50
WIP 0 x 4) 5 Costs Material Conversion Total
24,800 23,12 22,47 Beginning inventory $ 30,000 $ 3,600 $ 33,600
0 0 Current period 885,120 335,088 1,220,208
Total costs $915,120 $338,688 $1,253,808
- Beg WIP (1,000) (650) (1,000 End 2,800 = $ 4,480
x .65) WIP = x
$1.60 UNITS
23,800 22,47 1,120 3.920 Beginning inventory (30% complete- 6,000 units
0 x conversion)
$3.50 Started 180,000 units
$ 8,400 Completed 152,000 units
COGM = $120,575 - $112,17 Ending inventory (70% complete- 20,000 units
8,400 5 conversion)
Normal spoilage 4,800 units
b.
2
Required: Find ending WIP inventory, abnormal loss, and COGM. Assume
that, for conversion costs, abnormal shrinkage is 60 percent.
TI Mat CC Mat $ 77,775 = $ $3.
= 05
ANS:
25,500
Complete 24,000 24,000 24,00
Mat CC
0
+ End WIP 4,500 0 900 CC = $ 15,399 = $ $0. Units Complete 152,000 152,000
59 + Equivalents Ending WIP 20,000 14,000
+ Normal 1,100 1,120 880 26,100 + Abnormal Loss 9,200 5,520 (9,200 x .
6)
+ Abnormal 400 400 320 = Equivalent Production- 181,200 171,520
30,000 25,500 26,10 TI = $154,500 = $ 5.1 WA
0 5 = Equivalent Begin WIP (6,000) (1,800)
30,000 = Equivalent Production- 175,200 169,720
FIFO
Unit Costs:
End WIP Abn Loss WA FIFO
4,500 x $5.15 $23,17 400 x $1,220 Mat $915,120 = Mat $885,120 = $5.05
5 $3.05 $5.05
900 x $0.59 531 320 x 189 181,200 175,200
$0.59
$23,70 400 x 2,060 CC $338,688 = CC $335,088 = $1.97

213
 $1.97 Transferred In 12,400
171,520 169,720 Fruit 54,000
Containers 11,000
Ending WIP CC 98,000
Material 20,000 x $101,000 Total Costs $ 210,600
$5.05
CC 14,000 x 27,580 Prepare a cost of production report for October 20X5. The company uses
$1.97 weighted average.
$128,580
ANS:
Abnormal Spoilage
Material 9,200 $ 46,460 Delightful Yogurt Company
x Cost Report
$5.05 October 31, 20X5
CC 5,520 10,874 BWIP 5,000
x Trans. In 5,500
$1.97 Fruit 1,200
$ 57,334 Acctble. For 11,700
TI Fruit Container CC
Cost of Good Transferred Transferred Out 9,000 9,000 9,000 9,000
1,253,808 - 128,580 - 57,334 = $1,067,894 EWIP 1,700 1,700 0 1,020
Abnormal Spoilage 1,000 1,000 0 980
DIF: Moderate OBJ: 6-3,6-8 11,700 11,700 9,000 11,000

13. Delightful Yogurt Company produces yogurt in two departments-Mixing and Costs:
Finishing. In Mixing, all ingredients except fruit are added at the start of
production. In Finishing, fruit is added and then the mixture is placed into TI Fruit Container CC
containers. Adding the fruit to the basic yogurt mixture increases the
BWIP $ 9,700 $10,500 $0 $ 15,000
volume transferred in by the number of gallons of fruit added. Any spoilage
Current 12,400 54,000 11,000 98,000
that occurs is in the Finishing Department. Spoilage is detected just before
$22,100 $64,500 $11,000 $113,000
the yogurt is placed into containers or at the 98 percent completion point.
EUP 11,700 11,700 9,000 11,000
All spoilage is abnormal.
Per unit $1.89 $5.51 $1.22 $10.27
Finishing Department
Cost Assignment:
BWIP (100% fruit, 0% container, 30% CC) 5,000 gallons
EWIP
Gallons transferred in 5,500
1,700 x $1.89 = $ 3,213
Gallons of fruit added 1,200
1,700 x $5.51 = 9,367
EWIP (100% fruit, 0% container, 60% CC) 1,700 gallons
1,020 x $10.27 = 10,475 $ 23,055
Gallons transferred out 9,000
Spoilage
Abnormal spoilage 1,000
1,000 x $1.89 = $ 1,890
1,000 x $5.51 = 5,510
BWIP Costs: 980 x $10.27 = 10,065 17,465
Transferred In $ 9,700 Transferred Out
Fruit 10,500 $210,600 - 23,055 - 170,080
CC 15,000 17,465 =
Total accounted for $210,600
Current Costs:

214
 Ending Work in Process
DIF: Moderate OBJ: 6-3,6-8 15,000 x $1.72 = $ 25,800
8,250 x $7.34 = 60,555 $ 86,355
Hocking Company Abnormal Spoilage
2,500 x $9.06 = 22,650
The following information is available for Hocking Company for March 20X8. Cost Transferred Out
All materials are added at the start of production. $284,000 - 86,355 - 174,995
22,650 =
Beginning Work in Process: (80% complete) 8,000 units Total costs accounted for $ 284,000
Started 35,000 units
Normal spoilage (continuous) 6,000 units
Abnormal spoilage 2,500 units DIF: Moderate OBJ: 6-4,6-8
Ending Work in Process: (55% complete) 15,000 units
Transferred out 19,500 units 15. Refer to Hocking Company. Prepare the cost of production report assuming
the weighted average method.
Beginning Work in Process Costs:
Material $ 14,000 ANS:
Conversion 45,000 BI 8,000 + Started 35,000 = Accountable for 43,000
Current Costs:
Material 50,000 Hocking Company
Conversion 175,000 Cost Report
Total Costs $ 284,000 March 31, 20X8
Material CC
Transferred Out 19,500 19,500 19,500
14. Refer to Hocking Company. Prepare a cost of production report for March Ending Work In 15,000 15,000 8,250
using FIFO. Process
Normal Spoilage 6,000 0 0
ANS: Abnormal Spoilage 2,500 2,500
BI 8,000 + Started 35,000 = Accountable for 43,000 2,500
Accounted For 43,000 37,000 30,250
Hocking Company
Cost Report Material: $64,000/37,000 = $1.73
March 31, 20X8 Conversion Costs: $220,000/30,250 = $ 7.27

Material CC Cost Assignment:

BWIP 8,000 0 1,600
S&C 11,500 11,500 11,500 Ending Work in Process
EWIP 15,000 15,000 8,250 15,000 x $1.73 = $25,950
Norm 6,000 0 0 8,250 x $7.27 = 59,978 $ 85,928
Abnorm. 2,500 2,500 Abnormal Spoilage
Acctd. 43,000 29,000 23,850 2,500 x $9.00 = 22,500
For Transferred Out
$284,000 - 85,928 - 22,500 175,572
Material: $50,000/29,000 = $1.72 =
Conversion Costs: $175,000/23,850 = $7.34 Total costs accounted for $ 284,000

Cost Assignment:
DIF: Moderate OBJ: 6-3,6-8

215