Chapter 4 PDF

Chapter 04 Process Costing Answer Key
True / False Questions
1. When materials are purchased in a process costing system, a materials account is debited
with the cost of the materials.
TRUE
AACSB: Reflective Thinking

AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-01 Record the flow of materials; labor; and overhead through a process costing system.
2. Costs are accumulated by department in a process costing system.
TRUE

Blooms: Remember
Difficulty: 1 Easy
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3. The following journal entry would be made in a processing costing system when units that
have been completed with respect to the work done in Processing Department Z are
transferred from Processing Department Z to Processing Department Y:
FALSE

Blooms: Remember
Difficulty: 2 Medium
4. The units in beginning work in process inventory plus the units in ending work in process
inventory must equal the units transferred out of the department plus the units started into
production.
FALSE

Blooms: Remember
5. In order to equitably allocate costs in a process costing system, dissimilar products are
restated in terms of equivalent units by weighting the number of units produced by their market
values.
FALSE
4-75
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-02 Compute the equivalent units of production using the weighted-average method.
6. Under the weighted-average method, the equivalent units used to compute the unit costs of
ending inventories relate only to work done during the current period.
FALSE

Blooms: Understand
Difficulty: 3 Hard
7. In calculating cost per equivalent unit under the weighted-average method, prior period costs
are not combined with current period costs.
FALSE

Blooms: Remember
Learning Objective: 04-03 Compute the cost per equivalent unit using the weighted-average method.
8. Under the weighted-average method of process costing, costs from the prior period are
averaged with those of the current period in computing unit costs.
TRUE
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Blooms: Understand
9. Using process costing, it is necessary to consider the stage of completion of the units when
assigning conversion cost to partially completed units in the ending work in process inventory.
TRUE

Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-04 Assign costs to units using the weighted-average method.
10. The "costs accounted for" portion of the cost reconciliation report includes the cost of
beginning work in process inventory and the cost of units transferred out.
FALSE

Blooms: Understand
Learning Objective: 04-05 Prepare a cost reconciliation report.
11. The "costs to be accounted for" portion of the cost reconciliation report includes the cost of
ending work in process inventory and the costs added during the period.
FALSE
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Blooms: Understand
12. The "costs accounted for" portion of the cost reconciliation report includes the cost of
beginning work in process inventory and the costs added to production during the period.
FALSE

Blooms: Understand
13. The "costs to be accounted for" portion of the cost reconciliation report includes the cost of
beginning work in process inventory and the costs added during the period.
TRUE

Blooms: Understand
14. Process costing is used in those situations where many different products or services are
produced each period to customer specifications.
FALSE
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AICPA BB: Industry
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: Other topics
15. A job-order cost system would be used to account for the cost of building an oil tanker.
TRUE

AICPA BB: Industry
Blooms: Remember
Difficulty: 1 Easy
16. Operation costing is a hybrid system that employs certain aspects of both job-order and
process costing.
TRUE

AICPA BB: Industry
Blooms: Remember
Difficulty: 1 Easy
17. Both job-order and process costing systems use averaging to compute unit product costs.
TRUE

Blooms: Remember
4-79
Difficulty: 1 Easy
Multiple Choice Questions
18. Pulo Corporation uses a weighted-average process costing system. The company has two
processing departments. Production starts in the Assembly Department and is completed in
the Finishing Department. The units completed and transferred out of the Assembly
department during April will become the:
A. units in April's ending work in process in Finishing.
B. units in May's beginning work in process in Finishing.
C. units started in production in Finishing for April.
D. units started in production in Finishing for May.

Blooms: Understand
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19. Which of the following journal entries would be used to record application of manufacturing
overhead to work in process in a process costing system with two processing departments,
department A and department B?
A. Option A
B. Option B
C. Option C
D. Option D

Blooms: Remember
Difficulty: 1 Easy
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20. Which of the following statements about a process costing system is incorrect?
A. In a process costing system, each processing department has a work in process account.
B. In a process costing system, equivalent units are separately computed for materials and for
conversion costs.
C. In a process costing system, overhead can be underapplied or overapplied just as in job-
order costing.
D. In a process costing system, materials costs are traced to units of products.

Blooms: Understand
Difficulty: 3 Hard
21. Barraza Corporation uses a weighted-average process costing system. Barraza has two direct
materials. One of these materials is added at the beginning of the production process. The
other material is added when processing is 50% complete. When will the equivalent units of
production for these two materials be equal?
A. when processing on beginning work in process is less than 50% complete at the start of
the period.
B. when processing on beginning work in process is more than 50% complete at the start of
the period.
C. when processing on ending work in process is over 50% complete.
D. when processing on ending work in process is less than 50% complete.

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Blooms: Understand
Difficulty: 3 Hard
22. When the weighted-average method of process costing is used, a department's equivalent
units are computed by:
A. subtracting the equivalent units in beginning inventory from the equivalent units in ending
inventory.
B. subtracting the equivalent units in beginning inventory from the equivalent units for work
performed during the period.
C. adding the units transferred out to the equivalent units in ending inventory.
D. subtracting the equivalent units in beginning inventory from the sum of the units transferred
out and the equivalent units in ending inventory.

Blooms: Understand
4-83
23. Which of the following are needed to compute the cost per equivalent unit for materials under
the weighted-average method of process costing?
A. Option A
B. Option B
C. Option C
D. Option D

Blooms: Understand
24. For which situation(s) below would an organization be more likely to use a process costing
system of rather than a job-order costing system?
A. a paper mill that processes wood pulp into large rolls of paper
B. a shop that restores old cars to "showroom" quality
C. a framing shop that builds picture frames to order for individual customers
D. a masonry company that builds brick walls, bulkheads, and walkways designed by
architects

AICPA BB: Industry
4-84
Blooms: Remember
Difficulty: 1 Easy
25. Costs in an operation costing system are accumulated by:
A. department.
B. by individual job.
C. by both job and departments.
D. by neither job nor department.

Blooms: Remember
Difficulty: 1 Easy
26. Which of the following companies would be most likely to use a process costing system?
A. a shipbuilder
B. a furniture manufacturer
C. a law firm
D. a utility producing natural gas

AICPA BB: Industry
Blooms: Remember
Difficulty: 1 Easy
4-85
27. Which of the following companies would be most likely to use a process costing system?
A. Ship builder.
B. Movie studio.
C. Oil refinery.
D. Hospital.

AICPA BB: Industry
Blooms: Remember
Difficulty: 1 Easy
28. The Assembly Department started the month with 35,000 units in its beginning work in
process inventory. An additional 472,000 units were transferred in from the prior department
during the month to begin processing in the Assembly Department. There were 34,000 units in
the ending work in process inventory of the Assembly Department. How many units were
transferred to the next processing department during the month?
A. 507,000
B. 473,000
C. 471,000
D. 541,000
Units completed and transferred out = Units in beginning work in process inventory + Units
started into production or transferred in - Units in ending work in process inventory
Units completed and transferred out = 35,000 + 472,000 - 34,000 = 473,000
AACSB: Analytic
4-86
Blooms: Apply
Difficulty: 1 Easy
29. Health Beverage Corporation uses a process costing system to collect costs related to the
production of its celery flavored cola. The cola is first processed in a Mixing Department at
Health and is then transferred out and finished up in the Bottling Department. The finished
cases of cola are then transferred to Finished Goods Inventory. The following information
relates to Health's two departments for the month of January:
How many cases of cola were completed and transferred to Finished Goods Inventory during
January?
A. 66,000
B. 71,000
C. 72,000
D. 74,000
AACSB: Analytic
Blooms: Apply
4-87
30. Fabian Corporation uses the weighted-average method in its process costing system. The
Assembly Department started the month with 9,000 units in its beginning work in process
inventory that were 70% complete with respect to conversion costs. An additional 90,000 units
were transferred in from the prior department during the month to begin processing in the
Assembly Department. During the month 87,000 units were completed in the Assembly
Department and transferred to the next processing department. There were 12,000 units in the
ending work in process inventory of the Assembly Department that were 20% complete with
respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the
month?
A. 93,000
B. 83,100
C. 87,000
D. 89,400
Weighted-average method
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-88
31. Jawson Corporation uses the weighted-average method in its process costing system.
Operating data for the Painting Department for the month of April appear below:
What were the equivalent units for conversion costs in the Painting Department for April?
A. 67,300
B. 68,820
C. 70,520
D. 63,900
Units transferred to the next department = Units in beginning work in process + Units started
into production - Units in ending work in process = 6,300 + 65,600 - 4,600 = 67,300
AACSB: Analytic
Blooms: Apply
4-89
32. Narver Corporation uses the weighted-average method in its process costing system.
Operating data for the Lubricating Department for the month of October appear below:
What were the equivalent units for conversion costs in the Lubricating Department for
October?
A. 43,100
B. 37,100
C. 44,780
D. 47,780
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-90
33. Baker Corporation uses the weighted-average method in its process costing system. The
Assembly Department started the month with 8,000 units in its beginning work in process
inventory that were 90% complete with respect to conversion costs. An additional 95,000 units
were transferred in from the prior department during the month to begin processing in the
Assembly Department. There were 11,000 units in the ending work in process inventory of the
Assembly Department that were 90% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the
month?
A. 94,700
B. 101,900
C. 98,000
D. 92,000
AACSB: Analytic
Blooms: Apply
4-91
34. Larner Corporation uses the weighted-average method in its process costing system.
Operating data for the first processing department for the month of June appear below:
According to the company's records, the conversion cost in beginning work in process
inventory was $68,064 at the beginning of June. Additional conversion costs of $585,324 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.)
A. $6.892
B. $6.806
C. $5.575
D. $7.090
AACSB: Analytic
4-92
Blooms: Apply
4-93
35. Harker Corporation uses the weighted-average method in its process costing system. The first
processing department, the Welding Department, started the month with 16,000 units in its
beginning work in process inventory that were 40% complete with respect to conversion costs.
The conversion cost in this beginning work in process inventory was $29,440. An additional
59,000 units were started into production during the month and 61,000 units were completed
in the Welding Department and transferred to the next processing department. There were
14,000 units in the ending work in process inventory of the Welding Department that were
10% complete with respect to conversion costs. A total of $246,400 in conversion costs were
incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to
three decimal places.)
A. $4.176
B. $4.600
C. $3.375
D. $4.421
AACSB: Analytic
Blooms: Apply
4-94
4-95
36. Paxton Corporation uses the weighted-average method in its process costing system. The
Molding Department is the second department in its production process. The data below
summarize the department's operations in January.
The accounting records indicate that the conversion cost that had been assigned to beginning
work in process inventory was $10,973 and a total of $268,107 in conversion costs were
incurred in the department during January.
What was the cost per equivalent unit for conversion costs for January in the Molding
Department? (Round off to three decimal places.)
A. $5.348
B. $4.038
C. $5.080
D. $4.704
AACSB: Analytic
4-96
Blooms: Apply
4-97
37. Barnett Corporation uses the weighted-average method in its process costing system. The
company adds materials at the beginning of the process in Department M. Conversion costs
were 75% complete with respect to the 4,000 units in work in process at May 1 and 50%
complete with respect to the 6,000 units in work in process at May 31. During May, 12,000
units were completed and transferred to the next department. An analysis of the costs relating
to work in process at May 1 and to production activity for May follows:
The total cost per equivalent unit for May was:
A. $5.02
B. $5.10
C. $5.12
D. $5.25
Weighted-average method equivalent units of production
Weighted-average method cost per equivalent unit
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Total cost per equivalent unit = $3.10 + $2.00 = $5.10
AACSB: Analytic
Blooms: Apply
4-99
38. David Corporation uses the weighted-average method in its process costing system. The first
processing department, the Welding Department, started the month with 20,000 units in its
beginning work in process inventory that were 80% complete with respect to conversion costs.
The conversion cost in this beginning work in process inventory was $123,200. An additional
65,000 units were started into production during the month. There were 19,000 units in the
ending work in process inventory of the Welding Department that were 10% complete with
respect to conversion costs. A total of $389,250 in conversion costs were incurred in the
department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to
three decimal places.)
A. $7.547
B. $7.700
C. $4.634
D. $5.988
Units transferred to the next department = Units transferred to the next department = Units in
beginning work in process + Units started into production - Units in ending work in process
Units transferred to the next department = 20,000 + 65,000 - 19,000 = 66,000
AACSB: Analytic
4-100
Blooms: Apply
39. Jimmy Corporation uses the weighted-average method in its process costing system. The
ending work in process inventory consists of 9,000 units. The ending work in process
inventory is 100% complete with respect to materials and 70% complete with respect to labor
and overhead. If the cost per equivalent unit for the period is $3.75 for material and $1.25 for
labor and overhead, what is the balance of the ending work in process inventory account?
A. $41,625
B. $33,750
C. $45,000
D. $31,500
AACSB: Analytic
Blooms: Apply
4-101
4-102
40. Stay Corporation uses the weighted-average method in its process costing system. The
company's ending work in process inventory consists of 8,000 units, 60% complete with
respect to materials and 80% complete with respect to conversion costs. If the total cost in this
inventory is $200,000 and if the cost for materials is $16 per equivalent unit for the period, the
conversion cost per equivalent unit of the production for the period must be:
A. $19.25
B. $16.00
C. $25.67
D. $31.25
Materials: Cost of ending work in process inventory = 4,800 × $16.00 = $76,800
Conversion: Cost of ending work in process inventory = $200,000 - $76,800 = $123,200
Conversion: Cost per equivalent unit = $128,000 ÷ 6,400 = $19.25
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AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard
41. Walborn Corporation uses the weighted-average method in its process costing system. The
beginning work in process inventory in a particular department consisted of 11,000 units,
100% complete with respect to materials cost and 30% complete with respect to conversion
costs. The total cost in the beginning work in process inventory was $22,400. A total of 45,000
units were transferred out of the department during the month. The costs per equivalent unit
were computed to be $1.20 for materials and $3.40 for conversion costs. The total cost of the
units completed and transferred out of the department was:
A. $207,000
B. $184,600
C. $204,980
D. $182,580
AACSB: Analytic
4-104
Blooms: Apply
42. Trapp Corporation uses the weighted-average method in its process costing system. The
beginning work in process inventory in its Painting Department consisted of 3,000 units that
were 70% complete with respect to materials and 60% complete with respect to conversion
costs. The cost of the beginning work in process inventory in the department was recorded as
$10,000. During the period, 9,000 units were completed and transferred on to the next
department. The costs per equivalent unit for the period were $2.00 for material and $3.00 for
conversion costs. The cost of units transferred out during the month was:
A. $39,600
B. $45,000
C. $45,400
D. $35,400
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-105
43. Valley Manufacturing Corporation's beginning work in process inventory consisted of 10,000
units, 100% complete with respect to materials cost and 40% complete with respect to
conversion costs. The total cost in the beginning inventory was $30,000. During the month,
50,000 units were transferred out. The equivalent unit cost was computed to be $2.00 for
materials and $3.70 for conversion costs under the weighted-average method. Given this
information, the total cost of the units completed and transferred out was:
A. $255,000
B. $270,000
C. $240,000
D. $285,000
AACSB: Analytic
Blooms: Apply
4-106
44. Sarver Corporation uses the weighted-average method in its process costing system. The
Fitting Department is the second department in its production process. The data below
summarize the department's operations in March.
The Fitting Department's cost per equivalent unit for conversion cost for March was $8.24.
How much conversion cost was assigned to the units transferred out of the Fitting Department
during March?
A. $482,287.20
B. $502,640.00
C. $523,240.00
D. $561,144.00
AACSB: Analytic
Blooms: Apply
4-107
45. Rariton Corporation uses the weighted-average method in its process costing system. The
Molding Department is the second department in its production process. The data below
summarize the department's operations in January.
The Molding Department's cost per equivalent unit for conversion cost for January was $5.37.
How much conversion cost was assigned to the ending work in process inventory in the
Molding Department for January?
A. $4,081.20
B. $10,203.00
C. $10,310.40
D. $6,121.80
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
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46. In May, one of the processing departments at Stitzel Corporation had beginning work in
process inventory of $16,000 and ending work in process inventory of $27,000. During the
month, the cost of units transferred out from the department was $160,000. In the
department's cost reconciliation report for May, the total cost to be accounted for under the
weighted-average method would be:
A. $358,000
B. $43,000
C. $374,000
D. $187,000
AACSB: Analytic
Blooms: Apply
4-109
47. In February, one of the processing departments at Manger Corporation had beginning work in
month, $290,000 of costs were added to production and the cost of units transferred out from
the department was $281,000. In the department's cost reconciliation report for February, the
total cost to be accounted for under the weighted-average method would be:
A. $59,000
B. $605,000
C. $630,000
D. $315,000
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-110
Arizaga Corporation manufactures canoes in two departments, Fabrication and Waterproofing.
In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum
frame. The canoes are then transferred to the Waterproofing department to be coated with
sealant. Arizaga uses a weighted-average process cost system to collect costs in both
departments.
All materials in the Fabrication Department are added at the beginning of the production
process. On July 1, the Fabrication Department had 320 canoes in process that were 20%
complete with respect to conversion cost. On July 31, Fabrication had 540 canoes in process
that were 30% complete with respect to conversion cost. During July, the Fabrication
Department completed 6,700 canoes and transferred them to the Waterproofing Department.
48. What are the Fabrication Department's equivalent units related to materials for July?
A. 6,160
B. 6,380
C. 6,920
D. 7,240
Equivalent units of production = Units transferred to the next department or to finished goods +
Equivalent units in ending work in process inventory = 6,700 + 1.00 × 540 = 7,240
AACSB: Analytic
Blooms: Apply
4-111
49. What are the Fabrication Department's equivalent units related to conversion costs for July?
A. 6,542
B. 6,798
C. 6,862
D. 7,078
Equivalent units of production = Units transferred to the next department or to finished goods +
Equivalent units in ending work in process inventory = 6,700 + 0.30 × 540 = 6,862
AACSB: Analytic
Blooms: Apply
4-112
50. What journal entry should Arizaga make to record the completion of the production process by
the Waterproofing Department?
A. Option A
B. Option B
C. Option C
D. Option D
AACSB: Analytic
Blooms: Apply
The following information relates to the Blending Department of Kedakai Products Corporation
for the month of May. Kedakai uses a weighted-average process costing system.
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51. What are the Blending Department's equivalent units related to materials for May?
A. 260,000
B. 277,000
C. 290,000
D. 307,000
AACSB: Analytic
Blooms: Apply
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52. What are the Blending Department's equivalent units related to conversion costs for May?
A. 266,400
B. 290,400
C. 293,400
D. 303,600
AACSB: Analytic
Blooms: Apply
4-115
Jublot Corporation uses the weighted-average method in its process costing system. Data
concerning the first processing department for the most recent month are listed below:
Note: Your answers may differ from those offered below due to rounding error. In all cases,
select the answer that is the closest to the answer you computed. To reduce rounding error,
carry out all computations to at least three decimal places.
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53. The cost per equivalent unit for materials for the month in the first processing department is
closest to:
A. $16.31
B. $17.89
C. $14.48
D. $15.88
AACSB: Analytic
Blooms: Apply
4-117
54. The cost per equivalent unit for conversion costs for the first department for the month is
closest to:
A. $21.76
B. $19.45
C. $23.22
D. $24.38
AACSB: Analytic
Blooms: Apply
4-118
Dodd Corporation uses the weighted-average method in its process costing system. This
month, the beginning inventory in the first processing department consisted of 400 units. The
costs and percentage completion of these units in beginning inventory were:
A total of 5,400 units were started and 4,700 units were transferred to the second processing
department during the month. The following costs were incurred in the first processing
department during the month:
The ending inventory was 85% complete with respect to materials and 30% complete with
55. How many units are in ending work in process inventory in the first processing department at
the end of the month?
A. 700
B. 5,000
C. 900
D. 1,100
Units in ending work in process = Units in beginning work in process + Units started into
production - Units transferred to the next department = 400 + 5,400 - 4,700 = 1,100
AACSB: Analytic
4-119
Blooms: Apply
Difficulty: 1 Easy
56. What are the equivalent units for conversion costs for the month in the first processing
department?
A. 5,800
B. 5,030
C. 4,700
D. 330
AACSB: Analytic
Blooms: Apply
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closest to:
A. $21.37
B. $19.47
C. $20.04
D. $20.76
AACSB: Analytic
Blooms: Apply
4-121
Ibarra Corporation uses the weighted-average method in its process costing system. Data
department?
A. 7,070
B. 6,800
C. 8,600
D. 270
AACSB: Analytic
4-122
Blooms: Apply
closest to:
A. $11.76
B. $13.20
C. $12.65
D. $12.27
AACSB: Analytic
Blooms: Apply
4-123
Evans Corporation uses the weighted-average method in its process costing system. This
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department?
A. 9,000
B. 7,020
C. 6,800
D. 220
Units in ending work in process inventory = 900 + 8,100 - 6,800 = 2,200
AACSB: Analytic
Blooms: Apply
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closest to:
A. $10.09
B. $11.18
C. $9.85
D. $8.89
AACSB: Analytic
Blooms: Apply
4-126
62. The total cost transferred from the first processing department to the next processing
department during the month is closest to:
A. $342,904
B. $453,843
C. $366,300
D. $327,400
AACSB: Analytic
Blooms: Apply
4-127
Acklac Corporation uses the weighted-average method in its process costing system. This
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department?
A. 8,300
B. 240
C. 9,900
D. 8,540
Units in beginning work in process inventory + Units started into production or transferred in =
Units in ending work in process inventory + Units completed and transferred out
700 + 9,200 = Units in ending work in process inventory + 8,300
AACSB: Analytic
Blooms: Apply
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closest to:
A. $22.40
B. $20.28
C. $21.14
D. $21.49
AACSB: Analytic
Blooms: Apply
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closest to:
A. $26.64
B. $26.41
C. $27.97
D. $22.98
AACSB: Analytic
Blooms: Apply
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A. $485,486
B. $407,024
C. $426,300
D. $440,300
AACSB: Analytic
Blooms: Apply
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67. The cost of ending work in process inventory in the first processing department according to
the company's cost system is closest to:
A. $33,273
B. $11,769
C. $78,462
D. $58,847
AACSB: Analytic
Blooms: Apply
4-133
Lumb Corporation uses the weighted-average method in its process costing system. Data
68. What are the equivalent units for materials for the month in the first processing department?
A. 595
B. 7,995
C. 8,100
D. 7,400
AACSB: Analytic
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Blooms: Apply
closest to:
A. $35.88
B. $32.54
C. $34.17
D. $33.83
AACSB: Analytic
Blooms: Apply
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A. $32,892
B. $23,325
C. $17,413
D. $38,696
AACSB: Analytic
Blooms: Apply
4-136
Yoder Corporation uses the weighted-average method in its process costing system. The
following data pertain to operations in the first processing department for a recent month:
71. How many units were completed and transferred to the next department during the month?
A. 750,000 units
B. 790,000 units
C. 760,000 units
D. 740,000 units

AACSB: Analytic
Blooms: Apply
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72. What was the cost per equivalent unit for materials during the month?
A. $0.30
B. $0.25
C. $0.20
D. $0.15
AACSB: Analytic
Blooms: Apply
4-138
73. How much cost, in total, was assigned to the ending work in process inventory?
A. $2,600
B. $4,300
C. $15,000
D. $5,400
Weighted-average method:
AACSB: Analytic
Blooms: Apply
4-139
Guo Corporation uses the weighted-average method in its process costing system. This
A. 900
B. 1,100
C. 600
D. 9,200
AACSB: Analytic
4-140
Blooms: Apply
Difficulty: 1 Easy
A. 935
B. 9,100
C. 10,200
D. 10,035
AACSB: Analytic
Blooms: Apply
4-141
department?
A. 9,925
B. 10,200
C. 9,100
D. 825
AACSB: Analytic
Blooms: Apply
4-142
closest to:
A. $23.31
B. $23.70
C. $24.43
D. $24.03
AACSB: Analytic
Blooms: Apply
4-143
closest to:
A. $37.11
B. $38.14
C. $40.05
D. $37.92
AACSB: Analytic
Blooms: Apply
4-144
A. $623,600
B. $638,122
C. $614,200
D. $569,301
AACSB: Analytic
Blooms: Apply
4-145
A. $54,299
B. $51,613
C. $58,495
D. $68,817
AACSB: Analytic
Blooms: Apply
4-146
Kuzuck Corporation uses the weighted-average method in its process costing system. Data
4-147
A. $562,368
B. $543,200
C. $527,219
D. $536,200
AACSB: Analytic
Blooms: Apply
4-148
A. $28,118
B. $15,981
C. $35,148
D. $5,272
AACSB: Analytic
Blooms: Apply
4-149
Hache Corporation uses the weighted-average method in its process costing system. Data
A. 750
B. 5,900
C. 4,400
D. 5,150
AACSB: Analytic
4-150
Blooms: Apply
department?
A. 5,900
B. 4,400
C. 4,850
D. 450
AACSB: Analytic
Blooms: Apply
4-151
closest to:
A. $16.66
B. $15.31
C. $17.53
D. $19.09
AACSB: Analytic
Blooms: Apply
4-152
closest to:
A. $28.89
B. $22.61
C. $27.51
D. $25.90
AACSB: Analytic
Blooms: Apply
4-153
A. $231,700
B. $274,893
C. $205,007
D. $215,900
AACSB: Analytic
Blooms: Apply
4-154
A. $26,693
B. $69,888
C. $34,944
D. $20,966
AACSB: Analytic
Blooms: Apply
4-155
Carmon Corporation uses the weighted-average method in its process costing system. This
A. 900
B. 1,700
C. 1,000
D. 7,200
AACSB: Analytic
4-156
Blooms: Apply
Difficulty: 1 Easy
department?
A. 8,600
B. 7,495
C. 6,900
D. 595
AACSB: Analytic
Blooms: Apply
4-157
closest to:
A. $23.23
B. $19.94
C. $21.85
D. $21.20
AACSB: Analytic
Blooms: Apply
4-158
A. $334,200
B. $367,616
C. $294,947
D. $308,600
AACSB: Analytic
Blooms: Apply
4-159
Barker Corporation uses the weighted-average method in its process costing system. This
A. 8,800
B. 900
C. 400
D. 700
production - Units transferred to the next department = 300 + 9,100 - 8,700 = 700
AACSB: Analytic
4-160
Blooms: Apply
Difficulty: 1 Easy
department?
A. 140
B. 8,840
C. 8,700
D. 9,400
AACSB: Analytic
Blooms: Apply
4-161
closest to:
A. $26.35
B. $25.85
C. $26.65
D. $25.56
AACSB: Analytic
Blooms: Apply
4-162
closest to:
A. $26.31
B. $27.42
C. $29.38
D. $27.98
AACSB: Analytic
Blooms: Apply
4-163
A. $482,700
B. $513,466
C. $495,000
D. $475,229
AACSB: Analytic
Blooms: Apply
4-164
A. $32,501
B. $7,647
C. $38,237
D. $19,773
AACSB: Analytic
Blooms: Apply
4-165
Fulton Corporation uses the weighted-average method in its process costing system. This
4-166
A. $323,168
B. $388,528
C. $349,400
D. $364,800
AACSB: Analytic
Blooms: Apply
4-167
A. $39,216
B. $65,360
C. $45,752
D. $41,633
AACSB: Analytic
Blooms: Apply
4-168
The following information relates to the Assembly Department of Jataca Corporation for the
month of November. Jataca uses a weighted-average process costing system. All materials at
Jataca are added at the beginning of the production process.
On November 1, the work in process inventory account contained $6,400 of material cost and
$4,400 of conversion cost. Cost per equivalent unit for November was $1.50 for materials and
$2.80 for conversion costs.
101. What total amount of cost should be assigned to the units transferred out during November?
A. $1,337,300
B. $1,348,100
C. $1,369,500
D. $1,380,300
AACSB: Analytic
4-169
Blooms: Apply
102. What total amount of cost should be assigned to the units in work in process on November
30?
A. $17,800
B. $38,700
C. $40,200
D. $43,000
AACSB: Analytic
Blooms: Apply
4-170
In September, one of the processing departments at Wielgus Corporation had beginning work
in process inventory of $27,000 and ending work in process inventory of $10,000. During the
month, $296,000 of costs were added to production.
103. In the department's cost reconciliation report for September, the cost of units transferred out of
the department would be:
A. $313,000
B. $323,000
C. $303,000
D. $286,000
Beginning work in process inventory + Costs added during the month = Cost of units
transferred out + Ending work in process inventory
$27,000 + $296,000 = Cost of units transferred out + $10,000
Cost of units transferred out = $27,000 + $296,000 - $10,000 = $313,000
AACSB: Analytic
Blooms: Apply
4-171
104. In the department's cost reconciliation report for September, the total cost to be accounted for
would be:
A. $37,000
B. $323,000
C. $619,000
D. $646,000
Total cost to be accounted for = Beginning work in process inventory + Cost added to
production = $27,000 + $296,000 = $323,000
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
In December, one of the processing departments at Rumsey Corporation had ending work in
process inventory of $21,000. During the month, $110,000 of costs were added to production
and the cost of units transferred out from the department was $99,000.
4-172
105. In the department's cost reconciliation report for January, the cost of beginning work in
process inventory for the department would be:
A. $32,000
B. $78,000
C. $89,000
D. $10,000
Cost of beginning work in process inventory = Cost of ending work in process inventory + Cost
of units transferred out - Costs added to production = $21,000 + $99,000 - $110,000 =
$10,000
AACSB: Analytic
Blooms: Apply
4-173
106. In the department's cost reconciliation report for December, the total cost accounted for would
be:
A. $230,000
B. $120,000
C. $31,000
D. $240,000
Total cost accounted for = Cost of ending work in process inventory + Cost of units transferred
out
= $21,000 + $99,000 = $120,000
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
Essay Questions
4-174
107. Zhang Corporation uses process costing. A number of transactions that occurred in June are
listed below.
(1) Raw materials that cost $41,700 are withdrawn from the storeroom for use in the Mixing
Department. All of these raw materials are classified as direct materials.
(2) Direct labor costs of $47,700 are incurred, but not yet paid, in the Mixing Department.
(3) Manufacturing overhead of $56,900 is applied in the Mixing Department using the
department's predetermined overhead rate.
(4) Units with a carrying cost of $128,300 finish processing in the Mixing Department and are
transferred to the Drying Department for further processing.
(5) Units with a carrying cost of $133,800 finish processing in the Drying Department, the final
step in the production process, and are transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of $129,200 are sold.
Required:
Prepare journal entries for each of the transactions listed above.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-175
108. During February, the following transactions were recorded at Cuenca Corporation. The
company uses process costing.
(1) Raw materials that cost $38,300 are withdrawn from the storeroom for use in the Assembly
Department. All of these raw materials are classified as direct materials.
(2) Direct labor costs of $21,700 are incurred, but not yet paid, in the Assembly Department.
(3) Manufacturing overhead of $45,200 is applied in the Assembly Department using the
department's predetermined overhead rate.
(4) Units with a carrying cost of $86,500 finish processing in the Assembly Department and
are transferred to the Painting Department for further processing.
(5) Units with a carrying cost of $109,100 finish processing in the Painting Department, the
final step in the production process, and are transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of $106,100 are sold.
Required:
Prepare journal entries for each of the transactions listed above.
AACSB: Analytic
4-176
Blooms: Apply
Difficulty: 1 Easy
109. Lagana Corporation uses process costing. The following data pertain to its Assembly
Department for February.
Required:
Determine the equivalent units of production for the Assembly Department for February using
the weighted-average method.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-177
110. Carver 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.
Required:
Using the weighted-average method, determine the equivalent units of production for materials
and conversion costs.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-178
111. Jordon Corporation uses the weighted-average method in its process costing. The following
data pertain to its Materials Preparation Department for November.
Required:
Determine the equivalent units of production for the Materials Preparation Department for
November using the weighted-average method.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-179
112. Chargualaf Corporation uses the weighted-average method in its process costing. The
following data pertain to its Assembly Department for September.
Required:
Compute the equivalent units of production for both materials and conversion costs for the
Assembly Department for September using the weighted-average method.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-180
113. The following data have been provided by Allton Corporation, which uses the weighted-
average method in its process costing. The data are for the company's Shaping Department
for October.
Required:
Compute the equivalent units of production for both materials and conversion costs for the
Shaping Department for October using the weighted-average method.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-181
114. Barker 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.
Required:
Using the weighted-average method:
a. Determine the equivalent units of production for materials and conversion costs.
b. Determine the cost per equivalent unit for materials and conversion costs.
c. Determine the cost of units transferred out of the department during the month.
d. Determine the cost of ending work in process inventory in the department.
4-182
AACSB: Analytic
Blooms: Apply
4-183
115. Able 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.
Required:
a. Determine the equivalent units of production.
b. Determine the costs per equivalent unit.
c. Determine the cost of ending work in process inventory.
d. Determine the cost of the units transferred to the next department.
4-184
4-185
116. Kamp Company uses the weighted-average method in its process costing. Information about
units processed during a recent month in the Curing Department follow:
The beginning work in process inventory had $4,600 in conversion cost. During the month, the
Department incurred an additional $210,000 in conversion cost.
Required:
a. Determine the equivalent units of production for conversion for the month.
b. Determine the cost per equivalent unit of production for conversion for the month.
c. Determine the conversion cost assigned to the ending work in process inventory.
d. Determine the total conversion cost transferred out during the month.
a. Weighted-average method equivalent units of production
b. Weighted-average method cost per equivalent unit
c. Weighted-average method:
4-186
d. Weighted-average method:
AACSB: Analytic
Blooms: Apply
4-187
117. Gupta Inc. uses the weighted-average method in its process costing. The following data
concern the company's Mixing Department for the month of December.
Required:
Compute the cost per equivalent unit for materials and conversion for the Mixing Department
in December.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-188
118. Lafollette Inc. uses the weighted-average method in its process costing. The following data
concern the company's Assembly Department for the month of November.
Required:
Compute the costs per equivalent unit for the Assembly Department for November.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-189
119. Oleksy Corporation uses the weighted-average method in its process costing. The following
data concern the company's Assembly Department for the month of June.
During the month, 4,900 units were completed and transferred from the Assembly Department
to the next department.
Required:
Determine the cost of ending work in process inventory and the cost of units transferred out of
the department during June using the weighted-average method.
AACSB: Analytic
Blooms: Apply
4-190
120. Sydnor Inc. has provided the following data concerning the Assembly Department for the
month of April. The company uses the weighted-average method in its process costing.
During the month, 7,000 units were completed and transferred from the Assembly Department
to the next department.
Required:
Determine the cost of ending work in process inventory and the cost of units transferred out of
the department during April using the weighted-average method.
AACSB: Analytic
Blooms: Apply
4-191
121. In December, one of the processing departments at Weisz Corporation had beginning work in
month, the cost of units transferred out from the department was $244,000.
Required:
Construct a cost reconciliation report for the department for the month of December.
Cost of beginning work in process inventory + Costs added to production = Cost of ending
working in process inventory + Cost of units transferred out
$20,000 + Costs added to production = $14,000 + $244,000
Costs added to production = $14,000 + $244,000 - $20,000 = $238,000
AACSB: Analytic
Blooms: Apply
4-192
122. In September, one of the processing departments at Farquer Corporation had beginning work
in process inventory of $34,000. During the month, $342,000 of costs were added to
production and the cost of units transferred out from the department was $357,000.
Required:
Construct a cost reconciliation report for the department for the month of September.
Cost of beginning work in process inventory + Costs added to production = Cost of ending
working in process inventory + Cost of units transferred out
$34,000 + $342,000 = Cost of ending working in process inventory + $357,000
Cost of ending working in process inventory = $34,000 + $342,000 - $357,000
AACSB: Analytic
Blooms: Apply
4-193
123. In July, one of the processing departments at Gulbranson Corporation had beginning work in
month, $165,000 of costs were added to production and the cost of units transferred out from
the department was $161,000.
Required:
Construct a cost reconciliation report for the department for the month of July.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
4-194
124. A number of companies in different industries are listed below:
1. Synthetic rubber manufacturer
2. Contract printer that produces posters, books, and pamphlets to order
3. Dress manufacturer that makes clothing on contract for department stores
4. Aluminum refiner that makes aluminum ingots from bauxite ore
5. Asparagus cannery
6. Winery that produces a number of varietal wines
Required:
For each company, indicate whether the company is most likely to use job-order costing or
process costing.
1. Synthetic rubber manufacturer; Process Costing

2. Contract printer that produces posters, books, and pamphlets to order; Job-Order Costing
3. Dress manufacturer that makes clothing on contract for department stores; Job-Order
Costing
4. Aluminum refiner that makes aluminum ingots from bauxite ore; Process Costing
5. Asparagus cannery; Process Costing
6. Winery that produces a number of varietal wines; Job-Order Costing
AACSB: Analytic
AICPA BB: Industry
Blooms: Apply
Difficulty: 1 Easy
4-195
125. Whether a company uses process costing or job-order costing depends on its industry. A
number of companies in different industries are listed below:
2. Asparagus cannery
3. Brick manufacturer
4. Contract oil drilling company
5. Custom boat builder
6. Flour mill
Required:
process costing.
2. Asparagus cannery; Process Costing
3. Brick manufacturer; Process Costing
4. Contract oil drilling company; Job-Order Costing
5. Custom boat builder; Job-Order Costing
6. Flour mill; Process Costing
AACSB: Analytic
AICPA BB: Industry
Blooms: Apply
Difficulty: 1 Easy
4-196
126. 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:
2. Corn meal mill
3. Cattle feedlot that fattens cattle prior to slaughter
4. Shirt manufacturer that makes clothing on contract for department stores
5. Commercial photographer
Required:
process costing.
2. Corn meal mill; Process Costing
3. Cattle feedlot that fattens cattle prior to slaughter; Process Costing
4. Shirt manufacturer that makes clothing on contract for department stores; Job-Order
Costing
5. Commercial photographer; Job-Order Costing
AACSB: Analytic
AICPA BB: Industry
Blooms: Apply
Difficulty: 1 Easy
4-197

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Chapter 04 Process Costing Answer Key

True / False Questions

with the cost of the materials.

AACSB: Reflective Thinking

2. Costs are accumulated by department in a process costing system.

AACSB: Reflective Thinking

transferred from Processing Department Z to Processing Department Y:

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

are not combined with current period costs.

AACSB: Reflective Thinking

averaged with those of the current period in computing unit costs.

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

produced each period to customer specifications.

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

Multiple Choice Questions

processing departments. Production starts in the Assembly Department and is completed in

department during April will become the:

A. units in April's ending work in process in Finishing.

B. units in May's beginning work in process in Finishing.

C. units started in production in Finishing for April.

D. units started in production in Finishing for May.

AACSB: Reflective Thinking

department A and department B?

AACSB: Reflective Thinking

C. In a process costing system, overhead can be underapplied or overapplied just as in job-

D. In a process costing system, materials costs are traced to units of products.

AACSB: Reflective Thinking

production for these two materials be equal?

C. when processing on ending work in process is over 50% complete.

D. when processing on ending work in process is less than 50% complete.

AACSB: Reflective Thinking

units are computed by:

performed during the period.

out and the equivalent units in ending inventory.

AACSB: Reflective Thinking

the weighted-average method of process costing?

AACSB: Reflective Thinking

system of rather than a job-order costing system?

B. a shop that restores old cars to "showroom" quality

AACSB: Reflective Thinking

25. Costs in an operation costing system are accumulated by:

C. by both job and departments.

D. by neither job nor department.

AACSB: Reflective Thinking

D. a utility producing natural gas

AACSB: Reflective Thinking

AACSB: Reflective Thinking

transferred to the next processing department during the month?

Units completed and transferred out = 35,000 + 472,000 - 34,000 = 473,000

relates to Health's two departments for the month of January:

started into production or transferred in - Units in ending work in process inventory

Units completed and transferred out = 3,000 + 77,000 - 8,000 = 72,000