Question 1

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the cost per equivalent unit for materials used during July was
A) $9.90
B) $9.80
C) $11.11
D) $10.00

Accepted Answer

The answer of Hendrix Ltd employs a process costing system....

Question 2

On 1^st September, Kelita Ltd had 20,000 units in process, which were 30% completed. Materials are added at the beginning of the process. During the month 160,000 units were started and 170,000 completed. Ending work in process was 50% complete. By what amount would the equivalent units of materials differ if weighted average were used instead of FIFO? A) 20,000 more B) -0- C) 6,000 more D) 14,000 less

Accepted Answer

The answer of On 1^st September, Kelita Ltd had 20,000...

Question 3

Salmon Manufacturing Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs. Using weighted average process costing, the equivalent units for conversion costs for the month were
A) 14,100
B) 14,000
C) 16,000
D) 15,600

Accepted Answer

To determine the equivalent units for conversion costs using weighted average process costing, we need to calculate the equivalent units for the units started and the units in ending inventory.

Equivalent units for units started = Units started x % complete 
Equivalent units for units started = 14,000 x 100% 
Equivalent units for units started = 14,000

Equivalent units for ending inventory = Units in ending inventory x % complete 
Equivalent units for ending inventory = 1,000 x 60% 
Equivalent units for ending inventory = 600

Total equivalent units = Equivalent units for units started + Equivalent units for ending inventory 
Total equivalent units = 14,000 + 600 
Total equivalent units = 15,600

Therefore, the equivalent units for conversion costs for the month were 15,600. The best choice is D.

Question 4

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the number of equivalent units of conversion costs was
A) 14,400
B) 14,550
C) 14,850
D) 14,700

Accepted Answer

The number of equivalent units of conversion costs using the FIFO method is 14,400. This is calculated by multiplying the number of units in beginning work in process (0) by the percentage of completion for conversion costs (0%), adding the number of units started during the period (14,400) by the percentage of completion for conversion costs (100%), and adding the number of units in ending work in process (0) by the percentage of completion for conversion costs (0%).

Question 5

Salmon Manufacturing Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs. Using weighted average process costing, the equivalent units for direct material for the month were
A) 13,600
B) 14,000
C) 16,000
D) 15,600

Accepted Answer

Under the weighted average method, equivalent units for direct materials are calculated by adding the units completed and transferred out to the equivalent units in ending inventory. Since direct materials are added at the beginning, all units (beginning inventory, started, and ending inventory) are considered 100% complete for direct materials. Therefore, the equivalent units for direct materials are 15,000 (completed and transferred out) + 1,000 (ending inventory) = 16,000.

Question 6

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities:  Using the FIFO method, the number of units started and completed in July was
A) 14,250
B) 15,000
C) 13,500
D) 15,750

Accepted Answer

The answer of Hendrix Ltd employs a process costing system....

Question 7

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the cost of goods completed and transferred out during July was
A) $225,150
B) $225,060
C) $213,300
D) $213,000

Accepted Answer

To calculate the cost of goods completed and transferred out, we need to use the FIFO method. As direct materials are added at the beginning of the process, we can calculate the total cost of goods started in July by adding the direct materials cost and the conversion costs (direct labor and overhead cost).

Total cost of goods started = Direct materials cost + Conversion costs
= $100,000 + $170,700
= $270,700

Next, we need to subtract the cost of goods in ending work in process inventory from the total cost of goods started to get the cost of goods completed and transferred out.

Cost of goods completed and transferred out = Total cost of goods started - Cost of goods in ending work in process inventory
= $270,700 - ($17,640 + $28,000)
= $225,060

Therefore, the best choice is B, with a cost of goods completed and transferred out of $225,060.

Question 8

Gholson Ltd employs a process costing system in which direct materials are added at the beginning of the process. Direct material costs from the prior period for beginning work in process are $1,250. The current period's direct material costs total $31,500. The company began the period with 500 units, 70% complete, started 10,500 units, and finished the period with 1,000 units, 40% complete. Using the weighted average method, the direct material cost per equivalent unit for the period is
A) $3.00
B) $2.98
C) $3.20
D) $2.55

Accepted Answer

First, we need to calculate equivalent units of production for direct material costs:

Beginning work in process: 500 units x 70% complete = 350 units
Current period: 10,500 units x 100% complete = 10,500 units
Ending work in process: 1,000 units x 40% complete = 400 units

Total equivalent units of production = 350 + 10,500 + 400 = 11,250 units

Next, we need to calculate the total direct material costs:

Beginning work in process: $1,250
Current period: $31,500

Total direct material costs = $1,250 + $31,500 = $32,750

Finally, we can calculate the direct material cost per equivalent unit:

Direct material cost per equivalent unit = $32,750 ÷ 11,250 units = $2.98

Therefore, the best choice is B, $2.98.

Question 9

Assume there were 6,000 units in beginning work in process, 60% complete. 20,000 units were completed during the month. Ending work in process is 40% complete, which is equivalent to 3,200 units for conversion costs. Materials are added at the beginning of the process. The FIFO method is used. The number of equivalent units of conversion costs is
A) 23,200
B) 17,680
C) 19,600
D) 21,280

Accepted Answer

The answer of Assume there were 6,000 units in beginning...

Question 10

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost of the ending work in process inventory for July was
A) $18,480
B) $18,540
C) $18,330
D) $18,390

Accepted Answer

The answer of Hendrix Ltd employs a process costing system....

Question 11

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost of the goods completed and transferred out was
A) $225,150
B) $225,060
C) $213,300
D) $213,000

Accepted Answer

The weighted average method combines costs from the current and previous periods to calculate the cost per equivalent unit. The cost of goods completed and transferred out is calculated by multiplying the equivalent units completed by the cost per equivalent unit.

Question 12

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the number of equivalent units of material was
A) 15,750
B) 14,250
C) 15,000
D) 13,500

Accepted Answer

In the weighted average method, equivalent units are calculated by adding units completed and transferred out to the equivalent units in ending work in process. Since direct materials are added at the beginning, all units in process are considered 100% complete for materials. Therefore, the equivalent units of material would be the sum of units completed and transferred out and the units in ending inventory.

Question 13

Salmon Manufacturing Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs. Using FIFO process costing, the equivalent units for direct materials for the month were
A) 13,600
B) 14,000
C) 16,000
D) 15,600

Accepted Answer

The answer of Salmon Manufacturing Ltd uses a process costing...

Question 14

Assume there were 6,000 units in beginning work in process, 60% complete. 20,000 units were completed during the month. Ending work in process is 40% complete, which is equivalent to 3,200 units for conversion costs. Materials are added at the beginning of the process. The FIFO method is used. The number of units started this month is
A) 20,000 units
B) 22,000 units
C) 28,000 units
D) 15,280 units

Accepted Answer

To determine the number of units started during the month:

Units to account for = Beginning WIP units + Units started during the month

Units to account for = (6,000 * 60%) + Units started
Units to account for = 3,600 + Units started

Units accounted for = Units completed + Ending WIP units
Units accounted for = 20,000 + (3,200 * 40%)

Units accounted for = 20,000 + 1,280
Units accounted for = 21,280

To find the units started, we can rearrange the equation:

Units started = Units to account for - Units accounted for
Units started = (3,600 + Units started) - 21,280
Units started = Units started - 17,680

Bringing Units started to one side, we get:

Units started = 17,680

Therefore, the number of units started this month is 17,680 or 22,000 (including the beginning WIP units). But since we are given only the options and the closest answer is (B) 22,000 units, that is the best choice.

Question 15

Standard cost equivalent units are calculated the same way as FIFO equivalent units.

Accepted Answer

Standard cost equivalent units and FIFO equivalent units are both calculated based on the number of units completed during a period, plus the equivalent units of partially completed units. Therefore, the calculation method is the same for both.

Question 16

When standard costs are used as benchmarks, they are compared to actual costs using either weighted average or FIFO costs.

Accepted Answer

When comparing standard costs to actual costs, companies can use either weighted average or FIFO to determine the actual costs.

Question 17

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost per equivalent unit for conversion costs was
A) $5.80
B) $5.90
C) $6.00
D) $6.10

Accepted Answer

The answer of Hendrix Ltd employs a process costing system....

Question 18

Perry Ltd started 6,000 units during the month of March. 600 units were in the beginning work in process inventory and 400 units in the ending work in process inventory. Units completed and transferred out during March will be
A) 6,000
B) 6,400
C) 6,200
D) 5,400

Accepted Answer

Units started = 6,000
Units in beginning WIP inventory = -600
Units in ending WIP inventory = +400
Total units completed and transferred out = (6,000 - 600 + 400) = 6,200

Question 19

Assume that ending work in process is 8,000 units, 20% complete, and that 20,000 units were started during the month. The beginning work in process was 75% complete. Materials are added at the beginning of the process, and the cost of materials are added during the month was $61,500. Using the weighted average method, materials are allocated at $4.00 per equivalent unit. The cost of material included in the beginning work in process from last month was
A) $18,500
B) $20,000
C) $34,500
D) None of the above

Accepted Answer

The cost of materials included in the beginning work in process from last month is $18,500. This is calculated as follows:Beginning work in process units = 7,000 unitsBeginning work in process % complete = 75%Equivalent units of beginning work in process = 7,000 units x 75% = 5,250 unitsCost of materials per equivalent unit = $4.00Cost of materials included in beginning work in process = 5,250 units x $4.00 = $18,500

Question 20

Gholson Ltd employs a process costing system in which direct materials are added at the beginning of the process. Direct material costs from the prior period for beginning work in process are $1,250. The current period's direct material costs total $31,500. The company began the period with 500 units, 70% complete, started 10,500 units, and finished the period with 1,000 units, 40% complete. Using a FIFO system, the direct material cost per equivalent unit is
A) $3.00
B) $2.98
C) $3.20
D) $2.55

Accepted Answer

Under FIFO, only the current period's costs are considered. The equivalent units for direct materials are 10,500 (since materials are added at the start). The cost per equivalent unit is $31,500 / 10,500 = $3.00.

Quiz 6: Process Costing Systems

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the cost per equivalent unit for materials used during July was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the number of equivalent units of conversion costs was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the number of units started and completed in July was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the cost of goods completed and transferred out during July was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost of the ending work in process inventory for July was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost of the goods completed and transferred out was

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the number of equivalent units of material was

Standard cost equivalent units are calculated the same way as FIFO equivalent units.

When standard costs are used as benchmarks, they are compared to actual costs using either weighted average or FIFO costs.

Hendrix Ltd employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the weighted average method, the cost per equivalent unit for conversion costs was

Perry Ltd started 6,000 units during the month of March. 600 units were in the beginning work in process inventory and 400 units in the ending work in process inventory. Units completed and transferred out during March will be