Cost Acctg Review

PROCESS COSTING- W.A. & FIFO

1. Chicago Processing Co. uses the average costing method and reported a beginning inventory of 5,000 units that were 20% complete with respect to materials in one department. During the month, 11,000 units were started; 8,000 units were finished; ending inventory amounted to 8,000 units that were 60% complete with respect to materials. Total materials cost during the period for work in process should be spread over:

A. 7,200 units

B. 16,000 units

C. 11,200 units

D. 13,200 units

E. 12,800 units

SUPPORTING CALCULATION: 8,000 + .60(8,000) = 12,800 units

2. Beginning work in process was 60% complete as to conversion costs, and ending work in process was 45% complete as to conversion costs. The dollar amount of the conversion cost included in ending work in process (using the average cost method) is determined by multiplying the average unit conversion costs by what percentage of the total units in ending work in process?

A. 60%

B. 55%

C. 45%

D. 52(%

E. 100%

Answer: C

3. Goode Manufacturing has three producing departments in its factory. The ending inventory in the Milling Department consisted of 3,000 units. These units were 60% complete with respect to labor and factory overhead. Materials are applied at the end of the milling process. Unit costs for the complete process in the Milling Department are: materials, P1; labor, P2; and factory overhead, P3. The appropriate unit cost for each unit in the ending inventory is:

A. P2

B. P5

C. P3

D. P6

E. P4

SUPPORTING CALCULATION: 60% (P2 + P3) = P3

4. Gyro Products transferred 10,000 units to one department. An additional 3,000 units of materials were added in the department. At the end of the month, 7,000 units were transferred to the next...