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In a process costing system, the journal entry used to record the transfer of units
2 CORRECT from Department A, a processing department, to Department B, the next processing
department includes a debit to:
A)Work in Process - Department A and a credit to Work in Process
- Department B.
Work in ProcessB)
- Department B and a credit to Work in Process - Department A.
C)Work in Process - Department B and a credit to Materials.
D)Finished Goods and a credit to Work in Process - Department B.
The Renaissance Company uses the weighted-average method in its process costing
system. The May 1 work in process inventory in a particular department consisted
of 16,000 units, which were 50% complete with respect to conversion costs. The
company recorded 59,000 equivalent units of production for conversion costs for
3 CORRECT May in that department. There were 12,000 units in that department's ending work
in process inventory on May 31, which were 75% complete with respect to
conversion costs. A total of 50,000 units were completed and transferred out of the
department during the month. The number of units started during May in the
department was:
A)42,000 units.
B)46,000 units.
C)29,000 units.
D)54,000 units.
Feedback:
To determine the units started during May, account for all units in the
processing department:
Completed
Beginning inventory 16,000 (given) 50,000 (given)
(transferred out)
Started (transferred in) 46,000 (C) Ending inventory 12,000 (given)
Total units to be Total units
62,000 (B) 62,000 (A)
accounted for accounted for
Calculations:
(A) Units completed + Units in ending inventory = Total units accounted for
50,000 + 12,000 = 62,000
(B) Total units to be accounted for = Total units accounted for
62,000 = 62,000 (fromA)
(C) Units in beginning inventory + Units started = Total units to be accounted
for
16,000 + Units started = 62,000
Units started = 46,000
Paist Company uses the weighted-average method in its process costing system. The
following data were taken from the company's accounting records:
Beginning work in process inventory
(100% complete as to materials;
70% complete as to conversion) 60,000 units
4 CORRECT
Started in process during the period 180,000 units
Ending work in process inventory
(100% complete as to materials;
60% complete as to conversion) 40,000 units
The equivalent units of production for conversion costs was:
A)200,000 units.
B)204,000 units.
C)222,000 units.
D)224,000 units.
Feedback:
First, account for all units in the processing department in order to determine
the units in ending inventory (which is required in order to compute the
equivalent units).
Beginning inventory 60,000 (given) Completed (transferred out) 200,000 (C)
Started (transferred in) 180,000 (given) Ending inventory 40,000 (given)
Total units to be Total units
240,000 (A) 240,000 (B)
accounted for accounted for
Calculations:
(A) Units in beginning inventory + Units started = Total units accounted to be
for
60,000 + 180,000 = 240,000
(B) Total units to be accounted for = Total units accounted for
240,000 (fromA) = 240,000
(C) Units completed + Units in ending inventory = Total units accounted for
Units completed + 40,000 = 240,000
Units completed = 200,000
Then, compute the equivalent units.
Units completed and transferred out 200,000
Units in ending inventory (40,000 x .6) 24,000
Equivalent units 224,000
The Vincennes Company uses the weighted-average method in its process costing
system. For a particular department, the company had 108,000 equivalent units of
production with respect to conversion costs in March. There were 15,000 units in
6 CORRECT the department's beginning work in process inventory, two thirds complete with
respect to conversion costs. During March, 105,000 units were started and 100,000
were completed and transferred out of the department. The ending work in process
inventory in the department:
A)consisted of 5,000 units.
B)consisted of 10,000 units.
C)was 40% complete with respect to conversion costs.
D)was 65% complete with respect to conversion costs.
Feedback:
First, account for all units in the processing department in order to determine
the units in the ending inventory.
Beginning inventory 15,000 (given) Completed (transferred out) 100,000 (given)
Started (transferred in) 105,000 (given) Ending inventory 20,000 (C)
Total units to be Total units
120,000 (A) 120,000 (B)
accounted for accounted for
Calculations:
(A) Units in beginning inventory + Units started = Total units to be accounted
for
15,000 + 105,000 = 120,000
(B) Total units to be accounted for = Total units accounted for
120,000 (fromA) = 120,000
(C) Units completed + Units in ending inventory = Total units accounted for
100,000 + Units in ending inventory = 120,000
Units in ending inventory = 20,000
Since the units in the ending inventory does not match answers a or b, the
equivalent units in the ending inventory must be computed to decide between
answers c or d.
Equivalent units in ending inventory + Units completed = Equivalent units
Equivalent units in ending inventory + 100,000 (given) = 108,000 (given)
Equivalent units in ending inventory = 8,000
Finally, use the formula to calculate the number of equivalent units in ending
inventory in order to determine the percent complete:
Units in ending inventory x percent complete = Equivalent units in ending
inventory
20,000 (from above) x percent complete = 8,000 (given)
Percent complete = .4 or 40%
The Batavia Company uses the weighted-average method in its process costing
system. The company has only a single processing department. The company's
ending work in process inventory on April 30 consisted of 36,000 units. The units in
9 CORRECT the ending work in process inventory were 100% complete with respect to materials
and 60% complete with respect to labor and overhead. If the cost per equivalent unit
for April was $5.50 for materials and $8.50 for labor and overhead, the total cost
assigned to the ending work in process inventory was:
A)$302,400.
B)$320,400.
C)$504,000.
D)$381,600.
Feedback: Work in Process, April 30:
Materials (36,000 units x 100% x $5.50 per unit) $198,000
Labor and overhead (36,000 units x 60% x $8.50 per unit) 183,600
Total cost of work in process, April 30 $381,600