Multiple Choice Answers

1. A process costing system would be best suited for production of a large quantity of a homogeneous product.
A) True
B) False
2. The weighted-average method of process costing can only be used if materials are added at the beginning of the production process.
A) True
B) False
3. The information below was obtained from the records of the first processing department of Moore Company for the month of May. The company uses the weighted-average method in its process costing system.

All materials are added at the beginning of the process.

The equivalent units for materials for the month of May were:
A) 60,000 units
B) 74,000 units
C) 64,000 units
D) 69,800 units
4.Nguyen 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) 53,700
B) 52,280
C) 54,080
D) 50,100
5. The cost of beginning inventory under the weighted-average method is:
A) added in with current period costs in determining costs per equivalent unit for a given period.
B) ignored in determining the costs per equivalent unit for a given period.
C) considered separately from costs incurred during the current period.
D) subtracted from current period costs in determining costs per equivalent unit for a given period.
6. In a process costing system, manufacturing overhead applied is usually recorded as a debit to:
A) Finished goods.
B) Work in process.
C) Manufacturing overhead.
D) Cost of goods sold.
7. In August, one of the processing departments at Knepp Corporation had beginning work in process inventory of $17,000 and ending work in process inventory of $13,000. During the month, $178,000 of costs were added to production.

In the department’s cost reconciliation report for August, the total cost to be accounted for would be:
A) $30,000
B) $390,000
C) $195,000
D) $373,000
8. The information below was obtained from the records of the first processing department of Moore Company for the month of May. The company uses the weighted-average method in its process costing system.

All materials are added at the beginning of the process.

The equivalent units for labor and overhead for the month of May were:
A) 60,000 units
B) 69,800 units
C) 65,800 units
D) 73,800 units
9. A company should use process costing, rather than job order costing, if:
A) production is only partially completed during the accounting period.
B) the product is manufactured in batches only as orders are received.
C) the product is composed of mass-produced homogeneous units.
D) the product goes through several steps of production.
10. Duhamel Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were:

A total of 7,800 units were started and 7,000 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 55% complete with respect to materials and 50% complete with respect to conversion costs.
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.

How many units are in ending work in process inventory in the first processing department at the end of the month?
A) 1,400
B) 7,200
C) 900
D) 800