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1. (TCO F) Computing unit product costs involves averaging in:

Job-Order Costing            Process Costing

A             Yes         No

B             Yes         Yes

C             No          Yes

D            No          No

Choice A.

Choice B.

Choice C.

Choice D.

2. (TCO F) Luft Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

Units      Percent Complete with respect to Conversion

Beginning work in process inventory         11,000   90%

Started in production during June               58,000

Ending work in process inventory               17,000   10%

According to the company’s records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

$8.070

$7.891

$5.928

$4.584

3. (TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company’s processing departments for a recent month:

Units      Material Cost

Beginning work in process             30,000   $22,000

Started during the month              80,000   $72,000

Units completed               85,000

Ending work in process   25,000

All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:

$0.86

$0.90

$1.10

4. (TCO F) In a job-order costing system, the use of direct materials that have been previously purchased is recorded as a debit to:

Raw Materials Inventory.

Work in Process Inventory

Finished Goods Inventory

Manufacturing Overhead

5. (TCO F) Stickles Corporation incurred $79,000 of actual Manufacturing Overhead costs during August. During the same period, the Manufacturing Overhead applied to Work in Process was

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

debit to Manufacturing Overhead of $79,000.

credit to Manufacturing Overhead of $79,000.

credit to Work in Process of $75,000.

debit to Work in Process of $75,000.

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

$92,000.

$0.

$68,000.

$87,000.

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

i. Specialty coffee roaster (roasts small batches of specialty coffee beans)

ii. Custom aircraft builder

iii. Brick manufacturer

iv. Microbrewery that produces a number of different beers

v. Steel company making chain link fences from iron ore

For each company, indicate whether the company is most likely to use job-order costing or process costing.

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

Direct materials $61,050

Direct labor hours            1,332 labor hours

Direct labor wage rate    $14 per labor-hour

Machine Hours   1,480 machine hours

Number of units completed          3,700 units

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour.

Compute the unit product cost that would appear on the job cost sheet for this job.

9. (TCO F) Honeysuckle Corporation has provided the following data for the month of January:

Inventories                         Beginning            Ending

Raw materials    $40,000               $23,000

Work In process$9,000                  $13,000

Finished goods   $52,000               $45,000

Additional Information

Raw material purchases  $68,000

Direct labor costs             $90,000

Manufacturing overhead cost incurred     $44,000

Indirect materials included in manufacturing overhead costs incurred          $8,000

Manufacturing overhead cost applied to work in process  $39,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

10. (TCO F) Harmon Company uses the weighted-average method in its process costing system. The Curing Department of Harmon Company reported the following information for the month of November.

Units      Percentage complete with respect to conversion

Work in process, November 1      10,000   80%

Units started       28,000

Completed and transferred out    30,000

Work in process, November 30    8,000     30%

Costs for November        Materials             Conversion

Work in process, November 1      $34,500               $48,600

Added during the month $146,000             $194,400

All materials are added at the beginning of the process.

Required: Compute the following items using the weighted-average method:

i. The equivalent units of production for materials.

ii. The cost per equivalent unit for conversion.

iii. The total cost assigned to units transferred out of the Curing Department during November.

iv. The cost assigned to work in process inventory as of November 30.