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
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.)
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:
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
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:
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
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.