Process Costing Systems & Equivalent Units

Chapter 4
Systems Design: Process Costing
True/False
1.
T
Easy
The following journal entry would be made in a processing costing

system when units that have been completed with respect to the work
done in Processing Department Z are transferred from Processing
Department Z to Processing Department Y:
Work in Process, Department Y ......... XXX
Work in Process, Department Z .....
2.
F
Easy
XXX
The following journal entry would be made in a processing costing

system when units that have been completed with respect to the work
done in the final processing department are transferred to the
finished goods warehouse:
Finished Goods ........................ XXX
Materials .........................
XXX
3.
T
Hard
Appendix) The "Quantity schedule" and the "Costs to be accounted for"

sections of the production report are the same for the weightedaverage method and the FIFO method of process costing.
4.
F
Easy
In process costing, the same equivalent units figure is used for both
materials and conversion costs.
5.
F
Hard
(Appendix) The cost per equivalent unit for conversion costs will
always be the same under both the FIFO and the weighted-average
methods if there is no ending work in process inventory.
6.
T
Medium
(Appendix) The cost per equivalent unit for conversion costs will
always be the same under both the FIFO and the weighted-average
methods if there is no beginning work in process inventory.
7.
F
Medium
When assigning costs to partially completed units in the ending work

in process inventory, it is not necessary to consider the percentage
completion of the units under the weighted-average method.
ManagerialAccounting,9/e
89
8.
T
Medium
When computing the cost per equivalent unit, it is not necessary to

consider the percentage completion of the units in beginning inventory
under the weighted-average method.
9.
T
Easy
(Appendix) Under the FIFO process costing method, the equivalent units
of production in the production report relate only to work done during
the current period.
10.
F
Medium
(Appendix) The cost per equivalent unit under the FIFO method of
process costing is equal to the cost of beginning work in process
inventory plus the costs added during the period, all divided by the
equivalent units of production for the period.
11.
F
Medium
The weighted-average method of process costing can only be used if

materials are added at the beginning of the production process.
12.
T
Medium
A manufacturer of blank CDs would ordinarily use process costing

rather than job-order costing.
13.
T
Easy
In order to use process costing, the output of a processing department

must be homogeneous.
14.
T
Easy
In process costing, costs are accumulated in processing departments,

rather than by job.
15.
F
Easy
If all units go through all processing departments then the processing

departments are arranged in a parallel, rather than sequential,
fashion.
Multiple Choice
16.
C
Hard
(Appendix) All of the following are correct in referring to a

production report except:
a. The quantity schedule deals with whole units.
b. The total "Costs to be accounted for" must equal the total
cost
of the units completed and transferred out plus the cost of the
ending work in process inventory.
c. The equivalent units in the ending work in process inventory
will
be different if the weighted-average method is used than it is if the
FIFO method is used.
d. The total of the "Units to be accounted for" will equal the
total of the "Units accounted for".
90
17.
D
Hard
CPA
adapted
Assuming that there was no beginning work in process inventory, and

the ending work in process inventory is 50% complete with respect to
conversion costs, the number of equivalent units of production with
respect to conversion costs under the weighted-average method would
be:
a. the same as the units completed.
b. the same as the units started during the period.
c. less than the units completed.
d. less than the units started during the period.
18.
B
Hard
(Appendix) All production costs have been steadily rising in the

Donner Company for several periods. The company maintains large work
in process inventories. Donner Company's cost per equivalent unit
computed using the FIFO method would be:
a. the same as that computed under the weighted-average method.
b. higher than that computed under the weighted-average method.
c. lower than that computed under the weighted-average method.
d. could be the lower than, the same as, or higher than that
computed under the weighted-average method.
19.
C
Medium
(Appendix) If a company uses two different unit cost figures to cost

transfers from one department to another under a process costing
system, then it is reasonable to assume that:
a. there was no beginning work in process inventory.
b. processing centers are arranged in a sequential pattern.
c. the FIFO cost method is being used.
d. the weighted-average cost method is being used.
20.
A
Easy
Process costing would be appropriate for each of the following except:

a. custom furniture.
b. oil refining.
c. grain milling.
d. newsprint production.
21.
B
Hard
An operation costing system is:

a. identical to a process costing system except that actual
manufacturing overhead costs are traced to units of product.
b. the same as a process costing system except that direct materials
costs are accounted for in the same way as in job
order costing.
c. the same as a job order system except that direct materials
costs are accounted for in the same way as in process
costing.
d. identical to a job order costing system except that actual
manufacturing overhead costs are traced to units of product.
91
22.
D
Medium
CMA
adapted
Lucas Company uses the weighted-average method in its process costing

system. The company adds materials at the beginning of the process in
the Forming Department, which is the first of two stages in its
production process. Information concerning operations in the Forming
Department in October follows:
Units
Work in process on October 1 ............ 6,000
Units started during October ............ 50,000
Units completed and transferred to
the next Department during October ... 44,000
Materials
Cost
P 3,000
P25,560
What was the materials cost of work in process at October 31?

a. P3,060
b. P5,520
c. P6,000
d. P6,120
23.
A
Medium
David Company uses the weighted-average method in its process costing

system. The first processing department, the Welding Department,
started the month with 20,000 units that were 80% complete with
respect to conversion costs. The conversion cost in this beginning
work in process inventory was P123,200. An additional 65,000 units
were started into production during the month. There were 19,000 units
in the ending work in process inventory of the Welding Department that
were 10% complete with respect to conversion costs. A total of
P389,250 in conversion costs were incurred in the department during
the month.
What would be the cost per equivalent unit for conversion costs for
the month? (Round off to three decimal places.)
a. P7.547
b. P7.700
c. P4.634
d. P5.988
92
24.
A
Medium
Larner 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:
Beginning work in process inventory ...

Started into production during June ...
Ending work in process inventory ......
Units
24,000
86,000
19,000
Percentage
complete
40%
20%
According to the company's records, the conversion cost in beginning

work in process inventory was P68,064 at the beginning of June.
Additional conversion costs of P585,324 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.)
a. P6.892
b. P6.806
c. P5.575
d. P7.090
25.
C
Hard
CPA
adapted
Glo Co., a manufacturer of combs, uses the weighted-average method in

its process costing system. The company sold 125,000 units during the
month of April. There is only one processing department. The following
additional information is provided:
Inventory at April 1:
Work in process ................
None
Finished goods ................. 37,500 units
Inventory at April 30:
Work in process (75% complete
as to conversion costs)....... 8,000 units
Finished goods ................. 30,000 units
What were the equivalent units of production for conversion costs for
April?
a. 126,500
b. 125,500
c. 123,500
d. 117,500
93
26.
D
Hard
The Morgan Company uses the weighted-average method in its process

costing system. For a particular department, the company had 54,000
equivalent units of production with respect to conversion costs in
March. There were 7,500 units in the department's beginning work in
process inventory, two thirds complete with respect to conversion
costs. During March, 52,500 units were started and 50,000 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 2,500 units.
c. was 65% complete with respect to conversion costs.
d. was 40% complete with respect to conversion costs.
27.
B
Medium
The following data were taken from the accounting records of the Hazel
Corporation which uses the weighted-average method in its process
costing system:
Beginning work in process inventory
(100% complete as to materials;
70% complete as to conversion) ............. 30,000 units
Started in process during the period .......... 90,000 units
Ending work in process inventory
(100% complete as to materials;
60% complete as to conversion) ............. 20,000 units
The equivalent units of production for conversion costs was:
a. 102,000 units.
b. 112,000 units.
c. 111,000 units.
d. 100,000 units.
28.
B
Medium
Baker Company uses the weighted-average method in its process costing

system. The Assembly Department started the month with 8,000 units in
its beginning work in process inventory that were 90% complete with
respect to conversion costs. An additional 95,000 units were
transferred in from the prior department during the month to begin
processing in the Assembly Department. There were 11,000 units in the
ending work in process inventory of the Assembly Department that were
90% complete with respect to conversion costs.
What were the equivalent units of production for conversion costs in
the Assembly Department for the month?
a. 94,700
b. 101,900
c. 98,000
d. 92,000
94
29.
C
Medium
Jawson Company uses the weighted-average method in its process costing

system. Operating data for the Painting Department for the month of
April appear below:

Transferred in from the prior
department during April ............
Units
6,300
65,600
4,600
Percentage
complete
10%
70%

the Painting Department for April?
a. 67,300
b. 68,820
c. 70,520
d. 63,900
30.
C
Medium
Sarver Company uses the weighted-average method in its process costing

system. The Fitting Department is the second department in its
production process. The data below summarize the department's
operations in March.

department during March ............
Units
7,100
61,000
4,600
Percentage
complete
70%
30%
The Fitting Department's production report indicates that the cost per
equivalent unit for conversion cost for March was P8.24.
How much conversion cost was assigned to the units transferred out
of the Fitting Department during March?
a. P482,287.20
b. P502,640.00
c. P523,240.00
d. P561,144.00
95
31.
B
Medium
The Nichols Company uses the weighted-average method in its process

costing system. The company recorded 29,500 equivalent units of
production for conversion costs for November in a particular
department. There were 6,000 units in the ending work in process
inventory on November 30, 75% complete with respect to conversion
costs. The November 1 work in process inventory consisted of 8,000
units, 50% complete with respect to conversion costs. A total of
25,000 units were completed and transferred out of the department
during the month. The number of units started during November in the
department was:
a. 24,500 units.
b. 23,000 units.
c. 27,000 units.
d. 21,000 units.
32.
B
Easy
The Assembly Department started the month with 35,000 units in its
beginning work in process inventory. An additional units 472,000 were
ending work in process inventory of the Assembly Department. How many
units were transferred to the next processing department during the
month?
a. 507,000
b. 473,000
c. 471,000
d. 541,000
33.
A
Medium
CPA
adapted
Huffer Company uses the weighted-average method in its process costing

system. The following information pertains to Processing Department D
for the month of May:
Beginning work in process ....

Started in May ...............
Units completed ..............
Ending work in process .......
Number
of units
30,000
80,000
85,000
25,000
Cost of
materials
P11,000
P36,000
All materials are added at the beginning of the process. The cost per
equivalent unit for materials is closest to:
a. P0.43.
b. P0.45.
c. P0.55.
d. P0.59.
96
34.
D
Medium
Harker Company uses the weighted-average method in its process costing

started the month with 16,000 units in its beginning work in process
inventory that were 40% complete with respect to conversion costs. The
conversion cost in this beginning work in process inventory was
P29,440. An additional 59,000 units were started into production
during the month and 61,000 units were completed in the Welding
Department and transferred to the next processing department. There
were 14,000 units in the ending work in process inventory of the
Welding Department that were 10% complete with respect to conversion
costs. A total of P246,400 in conversion costs were incurred in the
the month? (Round off to three decimal places.)
a. P4.176
b. P4.600
c. P3.375
d. P4.421
35.
A
Medium
Paxton Company uses the weighted-average method in its process costing

system. The Molding Department is the second department in its
operations in January.

department during January ..........
Completed and transferred to the next
Units
2,700
Percentage
complete
80%
57,000
50,300
9,400
20%
The accounting records indicate that the conversion cost that had been
assigned to beginning work in process inventory was P10,973 and a
total of P268,107 in conversion costs were incurred in the department
during January.
What was the cost per equivalent unit for conversion costs for
January in the Molding Department? (Round off to three decimal
places.)
a. P5.348
b. P4.038
c. P5.080
d. P4.704
97
36.
D
Easy
The Richmond 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 August 31 consisted
of 18,000 units. The units in 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
August was P2.75 for materials and P4.25 for labor and overhead, the
total cost assigned to the ending work in process inventory was:
a. P126,000.
b. P 75,600.
c. P 80,100.
d. P 95,400.
37.
D
Hard
CPA
adapted
(Appendix) On November 1, Yankee Company had 20,000 units of work in

process in Department No. 1 that were 100% complete with respect to
material costs and 20% complete with respect to conversion costs.
During November, 160,000 units were started in Department No. 1 and
170,000 units were completed and transferred to Department No. 2. The
work in process on November 30, was 100% complete with respect to
material costs and 40% complete with respect to conversion costs. By
what amount would the equivalent units of production for conversion
costs for the month of November differ if the FIFO method were used
instead of the weighted-average method?
a. 20,000 decrease.
b. 16,000 decrease.
c. 8,000 decrease.
d. 4,000 decrease.
38.
D
Easy
Fabian Company uses the weighted-average method in its process costing

processing in the Assembly Department. During the month 87,000 units
were completed in the Assembly Department and transferred to the next
processing department. There were 12,000 units in the ending work in
process inventory of the Assembly Department that were 20% complete
with respect to conversion costs.
a. 93,000
b. 83,100
c. 87,000
d. 89,400
98
39.
C
Easy
Narver Company uses the weighted-average method in its process costing

system. Operating data for the Lubricating Department for the month of
October appear below:

department during October ..........
department during October ..........
Units
6,600
Percentage
complete
60%
40,100
37,100
9,600
80%

the Lubricating Department for October?
a. 43,100
b. 37,100
c. 44,780
d. 47,780
40.
B
Hard
Black Company uses the weighted-average method in its process costing

system. The company's ending work in process inventory consists of
5,000 units, 80% complete with respect to materials and 50% complete
with respect to labor and overhead. If the total Peso value of the
inventory is P60,000 and the cost per equivalent unit for labor and
overhead is P8.00, the cost per equivalent unit for materials must be:
a. P5.00.
b. P10.00.
c. P8.00.
d. P4.00.
99
41.
B
Hard
Department 2 is the second of three sequential processes. All

materials are added at the beginning of processing in Department 2.
During October, Department 2 reported the following data:
Number of
Units
Units started .............
60,000
Completed and transferred
50,000
Work in process, October 1
26,000
Work in process, October 31
36,000
Costs for October: Transferred In
Work in process,
October 1 ......
P45,000
Added during
the month ......
P81,000
Conversion Costs
Percentage Completed
60%
20%
Materials
Conversion Costs
P 25,000
P 54,000
P115,000
P315,000
The company uses the weighted-average method in its process costing

system. The cost per equivalent unit on the production report for
conversion costs would have been to the nearest cent:
a. P5.51.
b. P6.45.
c. P6.30.
d. P7.38.
42.
B
Medium
Overland, Inc., uses the weighted-average method in its process

costing system. The companys work in process inventory on April 30
consists of 25,000 units. The units in the ending inventory are 100%
complete with respect to materials and 75% complete with respect to
conversion costs. If the cost per equivalent unit is P3.00 for
materials and P5.50 for conversion costs, the total cost in the April
30 work in process inventory is:
a. P212,500.
b. P178,125.
c. P159,375.
d. P109,375.
100
43.
D
Medium
Valley Manufacturing Companys beginning work in process inventory

consisted of 10,000 units, 100% complete with respect to materials
cost and 40% complete with respect to conversion costs. The total cost
in the beginning inventory was P30,000. During the month, 50,000 units
were transferred out. The equivalent unit cost was computed to be
P2.00 for materials and P3.70 for conversion costs under the weightedaverage method. Given this information, the total cost of the units
completed and transferred out was:
a. P255,000.
b. P270,000.
c. P240,000.
d. P285,000.
44.
A
Medium
CPA
adapted
Ogden Company uses the weighted-average method in its process costing

system. Information for the month of January concerning Department A,
the first stage of the companys production process, follows:
Materials
Conversion Cost
Work in process, beginning ...... P 8,000
P 6,000
Current added during January .... P40,000
P32,000
Equivalent units of production .. 100,000
95,000
Cost per equivalent unit ........ P 0.48
P 0.40
Units completed and transferred
to the next department ........
90,000 units
Work in process, ending .........
10,000 units
Materials are added at the beginning of the process. The ending work
in process is 50% complete with respect to conversion costs. What cost
would be recorded for the ending work in process inventory?
a.
b.
c.
d.
45.
B
Easy
P6,800
P8,800
P3,400
P4,400
Trapp Company uses the weighted-average method in its process costing

system. The beginning work in process inventory in its Painting
Department consisted of 3,000 units that were 70% complete with
respect to materials and 60% complete with respect to conversion
costs. The cost of the beginning work in process inventory in the
department was recorded as P10,000. During the period, 9,000 units
were completed and transferred on to the next department. The costs
per equivalent unit for the period were P2.00 for material and P3.00
for conversion costs. The cost of units transferred out during the
month was:
a. P39,600.
b. P45,000.
c. P45,400.
d. P35,400.
101
46.
B
Hard
Strap Company uses the weighted-average method in its process costing

system. The company has only one processing department. The ending
work in process inventory consists of 10,000 units, 60% complete with
respect to materials. The total Peso value of this inventory is
P38,000. The costs per equivalent unit are P5.00 for materials and
P4.00 for conversion costs for the period. With respect to conversion
costs, the ending work in process inventory is:
a. 10% complete.
b. 20% complete.
c. 38% complete.
d. 30% complete.
47.
A
Easy
Rariton Company uses the weighted-average method in its process

costing system. The Molding Department is the second department in its
operations in January.

Units
4,800
Percentage
complete
60%
78,000
80,900
1,900
40%
The Molding Department's production report indicates that the cost per
equivalent unit for conversion cost for January was P5.37.
How much conversion cost was assigned to the ending work in process
inventory in the Molding Department for January?
a. P4,081.20
b. P10,203.00
c. P10,310.40
d. P6,121.80
48.
D
Medium
(Appendix) Ebis Company uses the FIFO method in its process costing
P12,610. An additional 89,000 units were started into production
during the month. There were 22,000 units in the ending work in
process inventory of the Welding Department that were 30% complete
with respect to conversion costs. A total of P806,085 in conversion
costs were incurred in the department during the month.
the month on the department's production report? (Round off to three
decimal places.)
a. P8.026
b. P9.700
c. P9.057
d. P9.450
49.
C
Medium
(Appendix) Marten Company uses the FIFO method in its process costing
system. Operating data for the Casting Department for the month of
September appear below:

department during September ........
Units
19,000
Percentage
complete
80%
74,000
102
17,000
90%

work in process inventory was P83,600 at the beginning of September.
September on the Casting Department's production report? (Round off
to three decimal places.)
a. P5.498
b. P5.779
c. P5.620
d. P5.500
103
50.
C
Hard
(Appendix) Herston Company uses the FIFO method in its process costing
system. The beginning work in process inventory in a particular
department consisted of 6,000 units, two-thirds complete with respect
to conversion costs. During the month, 42,000 units were started and
40,000 units were completed and transferred out of the department. The
company had 40,000 equivalent units of production for conversion
costs. The ending work in process inventory in the department
consisted of:
a. 8,000 units, 25% complete with respect to conversion costs.
b. 0 units.
c. 8,000 units, 50% complete with respect to conversion costs.
d. 4,000 units, 100% complete with respect to conversion costs.
51.
B
Medium
(Appendix) Carson Company uses the FIFO method in its process costing
ending work in process inventory of the Assembly Department that were
60% complete with respect to conversion costs.
a. 72,000
b. 75,600
c. 76,000
d. 76,800
52.
A
Medium
(Appendix) Karmen Company uses the FIFO method in its process costing
system. Operating data for the Enameling Department for the month of
May appear below:

department during May ..............
Units
2,400
87,000
8,600
Percentage
complete
40%
60%

the Enameling Department for May?
a. 85,000
b. 85,960
c. 93,200
d. 80,800
104
53.
A
Medium
(Appendix) Creer Company uses the FIFO method in its process costing
system. Department A had 20,000 units in process at the beginning of
January, that were 40% complete with respect to conversion costs. All
materials are added at the beginning of the process in Department A.
The January 1 work in process inventory in Department A contained
P10,000 in materials cost and P11,600 in conversion cost. During
January, materials costs were P0.50 per equivalent unit and conversion
costs were P1.50 per equivalent unit. All of the units in the
beginning work in process inventory were completed and transferred out
during the month. What was the total cost attached to these units when
they were transferred to the next department?
a. P39,600.
b. P33,600.
c. P45,600.
d. P37,600.
54.
C
Medium
(Appendix) Mukluk Company uses the FIFO method in its process costing
system. The conversion cost for the month of April is P5.00 per
equivalent unit and the material cost is P2.90 per equivalent unit. At
the beginning of the month, 1,000 units were in process that were 100%
complete with respect to materials and 30% complete with respect to
conversion, with a total cost at that point of P2,400. If these units
are fully complete by the end of the month, their total cost will be:
a. P3,500.
b. P3,900.
c. P5,900.
d. P8,000.
55.
A
Medium
(Appendix) Index Company uses the FIFO method in its process costing
system. The first processing department, the Forming Department,
P9,010. An additional 76,000 units were started into production during
the month and 83,000 units were completed and transferred to the next
process inventory of the Forming Department that were 70% complete
with respect to conversion costs. A total of P445,915 in conversion
costs were incurred in the department during the month.
the month on the Forming Department's production report? (Round off
to three decimal places.)
a. P5.050
b. P5.300
c. P5.867
d. P5.150
105
56.
A
Medium
(Appendix) Qart Company uses the FIFO method in its process costing
system. Operating data for the Cutting Department for the month of
March appear below:

Units
4,500
Percentage
complete
20%
74,000
74,500
4,000
60%

work in process inventory was P1,656 at the beginning of March.
March on the Cutting Department's production report? (Round off to
three decimal places.)
a. P1.710
b. P1.677
c. P1.756
d. P1.840
57.
B
Medium
(Appendix) Roger Company uses the FIFO method in its process costing
system. The following data are taken from the accounting records of a
particular department for June:
Beginning work in process inventory:
Cost ................................ P17,500
Units ............................... 20,000 units
Percentage completion:
Materials ........................
100%
Conversion .......................
60%
Units completed and transferred out ....
Cost per equivalent unit:
Material ............................
Conversion ..........................
75,000 units
P1.75
P0.50
The cost of the 75,000 units transferred out of the department during
June is:
a. P151,250.
b. P145,250.
c. P131,500.
d. P168,750.
106
58.
A
Medium
(Appendix) Winkle Company uses the FIFO method in its process costing
system. At the beginning of March, the work in process inventory in
the Blending Processing Center consisted of 5,000 units, 90% complete
with respect to conversion costs. At the end of the month, the work in
process inventory consisted of 2,000 units that were 60% complete with
respect to conversion costs. If 10,000 units were transferred to the
next processing center during the month, the equivalent units of
production for conversion costs were:
a. 6,700 units.
b. 11,700 units.
c. 10,300 units.
d. 13,000 units.
59.
B
Easy
CPA
adapted
(Appendix) Winder Company uses the FIFO method in its process costing
system. Department One is the first stage of the company's production
process. The following information pertains to conversion costs for
April for Department One:
Units
Work in process, beginning (40% complete) ............. 40,000
Started in April ...................................... 320,000
Completed in April and transferred to Department Two .. 340,000
Work in process, ending (60% complete) ................ 20,000
The equivalent units of production for conversion costs are:
a. 320,000.
b. 336,000.
c. 352,000.
d. 360,000.
60.
D
Medium
(Appendix) Garson Company uses the FIFO method in its process costing
system. The Grinding Department started the month with 18,000 units in
processing in the Grinding Department. During the month 115,000 units
were completed in the Grinding Department and transferred to the next
process inventory of the Grinding Department that were 20% complete
with respect to conversion costs.
the Grinding Department for the month?
a. 81,000
b. 115,200
c. 115,000
d. 113,400
107
61.
D
Medium
(Appendix) Oxyrom Company uses the FIFO method in its process costing
system. Operating data for the Brazing Department for the month of
November appear below:

department during November .........
department during November .........
Units
3,800
Percentage
complete
20%
46,700
43,200
7,300
80%

the Brazing Department for November?
a. 49,040
b. 50,200
c. 43,200
d. 48,280
62.
C
Medium
(Appendix) Tarten Company uses the FIFO method in its process costing
system. Operating data for the Curing Department for the month of
March appear below:

Units
9,000
Percentage
complete
10%
57,000
65,000
1,000
70%

work in process inventory was P7,470 at the beginning of March. The
cost per equivalent unit for conversion costs for March was P8.20.
How much conversion cost would be assigned to the units completed
and transferred out of the department during March?
a. P525,530
b. P592,040
c. P533,090
d. P533,000
108
Reference: 4-1
A sporting goods manufacturer buys wood as a direct material for baseball bats. The
Forming Department processes the baseball bats, and the bats are then transferred to
the Finishing Department where a sealant is applied. There was no beginning work in
process inventory in the Forming Department in May. The Forming Department began
manufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming
Department for the month of May were as follows:
Direct materials ........
Conversion costs ........
P33,000
P17,000
A total of 8,000 bats were completed and transferred to the Finishing Department
during May. The ending work in process inventory was 100% complete with respect to
direct materials and 25% complete with respect to conversion costs. The company uses
the weighted-average method of process costing.
63.
D
Medium
CMA
adapted
Refer To:
4-1
The cost of the units transferred to the Finishing Department during

May was:
a. P50,000.
b. P40,000.
c. P53,000.
d. P42,400.
64.
A
Medium
CMA
adapted
Refer To:
4-1
The cost of the work in process inventory in the Finishing Department

at the end of May was:
a. P7,600.
b. P10,000.
c. P2,500.
d. P4,000.
Reference: 4-2
Adam Company uses the weighted-average method in its process costing system. The
following information for the Assembly Department was obtained from the accounting
records for September (all materials are added at the beginning of the process):
Work in process inventory, Sept. 1 ...

Transferred in during the month ......
Work in process inventory, Sept. 30 ..
Number
of Units
60,000
105,000
40,000
Transferred
In
Beginning work in
process inventory ............
Cost added during the month .....
P 60,000
P115,500
Labor and Overhead

Percent Completed
15%
20%
Materials
Labor &
Overhead
P30,000
P63,000
P 16,000
P320,000
65.
A
Medium
Refer To:
4-2
The "Total cost to be accounted for" section of the production report

for the month will show an amount equal to:
a. P604,500.
b. P498,500.
c. P429,000.
d. P106,000.
66.
D
Medium
Refer To:
4-2
The equivalent units of production for material for the month is:
a. 105,000.
b. 145,000.
c. 122,000.
d. 165,000.
109
Reference: 4-3
Madsen Company uses the weighted-average method in its process costing system. During
October, the Mixing Department transferred out 40,000 units. The October 31 work in
process inventory in the Mixing Department consisted of 4,000 equivalent units of
material and 5,000 equivalent units of labor and overhead. The cost per equivalent
unit was P2.50 for materials and P6.25 for labor and overhead.
67.
A
Medium
Refer To:
4-3
The total cost of the October 31 work in process inventory was:

a. P41,250.
b. P35,000.
c. P43,750.
d. P78,750.
68.
B
Medium
Refer To:
4-3
The "Total cost to account for" section of the production report for
October will show an amount equal to:
a. P110,000.
b. P391,250.
c. P350,000.
d. P428,750.
Reference: 4-4
(Appendix) The activity in Nolan Company's Blending Department for the month of April
is given below:
Number
of Units
Work in process
inventory, April 1 .......
Started into process
during the month .........
Work in process
inventory, April 30 ......
8,000
Labor and Overhead

Percent Complete
50%
50,000
10,000
70%
All materials are added at the beginning of processing in the Blending Department.
69.
A
Medium
Refer To:
4-4
(Appendix) The equivalent units of production for material for the

month, using the FIFO method, are:
a. 50,000 units.
b. 58,000 units.
c. 54,000 units.
d. 60,000 units.
70.
B
Medium
Refer To:
4-4
(Appendix) The equivalent units of production for labor and overhead

for the month, using the FIFO method, are:
a. 47,000 units.
b. 51,000 units.
c. 5,000 units.
d. 54,000 units.
71.
C
Medium
Refer To:
4-4
The equivalent units of production for material for the month, using
the weighted-average method, are:
a. 48,000 units.
b. 50,000 units.
c. 58,000 units.
d. 52,000 units.
72.
D
Medium
Refer To:
The equivalent units of production for labor and overhead for the
month, using the weighted-average method, are:
a. 50,000 units.
b. 51,000 units.
110
4-4
c. 47,000 units.
d. 55,000 units.
Reference: 4-5
Activities in the Challenger Companys Assembly Department for the month of
follow:
Number
Percent Complete
Units
Materials Conversion
Work in process inventory, March 1
5,000
65%
30%
Started into production during March
65,000
Work in process inventory, March 3
3,000
35%
25%
March
73.
C
Medium
Refer to:
4-5
The equivalent units of production for materials for March, using the
weighted-average method, would be:
a. 65,000.
b. 67,000.
c. 68,050.
d. 70,000.
74.
A
Hard
Refer to:
4-5
(Appendix) The equivalent units of production for conversion for March

using the FIFO method, would be:
a. 66,250.
b. 67,000.
c. 64,250.
d. 67,750.
111
Reference: 4-6
The following data relate to the Blending Department of Tru-Color Paint Company for a
recent month:
Beginning work in process inventory .....

Units started into production ...........
Units completed and transferred out .....
Ending work in process inventory ........
Number
of Units
9,000
45,000
46,000
8,000
Percent Complete
Conversion Costs
60%
25%
All materials are added prior to the beginning of work in the Blending Department.
75.
B
Hard
Refer to:
4-6
(Appendix) Assuming that Tru-Color Paint Company uses the FIFO method,
the equivalent units of production for materials would be:
a. 42,600.
b. 45,000.
c. 53,000.
d. 46,000.
76.
A
Hard
Refer to:
4-6
(Appendix) Assuming Tru-Color Paint Company uses the FIFO method, the
equivalent units of production for conversion costs would be:
a. 42,600.
b. 44,400.
c. 46,000.
d. 54,000.
77.
C
Medium
Refer to:
4-6
Assuming that Tru-Color Paint Company uses the weighted-average

method, the equivalent units of production for materials would be:
a. 48,000.
b. 46,000.
c. 54,000.
d. 45,000.
78.
D
Medium
Refer to:
4-6
Assuming that Tru-Color Paint Company uses the weighted-average

method, the equivalent units of production for conversion costs would
be:
a. 44,400.
b. 42,600.
c. 46,000.
d. 48,000.
112
Reference: 4-7
The information below was obtained from the records of the first processing
department of Christine Corporation for the month of July. The company uses the
weighted-average method in its process costing system.
Work in process inventory, July 1 .......

Started during the month ................
Completed during the month ..............
Work in process inventory, July 31 ......
Units
20,000
70,000
80,000
?
Labor and Overhead

Percent Completed
40%
25%
All materials are added at the beginning of the manufacturing process.

79.
B
Medium
Refer To:
4-7
a. 70,000.
b. 90,000.
c. 80,000.
d. 82,500.
80.
D
Medium
Refer To:
4-7
month is:
a. 70,000.
b. 90,000.
c. 80,000.
d. 82,500.
Reference: 4-8
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 weightedaverage method in its process costing system.
Work in process, May 1 ............

Units started .....................
Completed and transferred out .....
Work in process, May 31 ...........
Units
10,000
64,000
60,000
14,000
Labor and Overhead

Percentage Complete
40%
70%
All materials are added at the beginning of the process.

81.
B
Medium
Refer To:
4-8
The equivalent units of production for materials for the month of May
were:
a. 60,000 units.
b. 74,000 units.
c. 64,000 units.
d. 69,800 units.
82.
B
Medium
Refer To:
4-8
month of May were:
a. 60,000 units.
b. 69,800 units.
c. 65,800 units.
d. 73,800 units.
Reference: 4-9
Information about units processed and processing costs incurred during a recent month
in the Refining Department of a manufacturing company follow:
Number of
Units
Percent Completion
Conversion Costs
113
Beginning work in process inventory .... 11,000

Units started into production .......... 120,000
Units completed and transferred out .... 114,000
Ending work in process inventory ....... 17,000
35%
30%
The beginning work in process inventory included P11,000 of conversion cost. During
the month, the Department incurred an additional P290,000 in conversion costs.
83.
A
Medium
Refer to:
4-9
Assuming that the company uses the weighted-average cost method, what
are the equivalent units of production for conversion costs for the
Blending Department for the month?
a. 119,100
b. 120,000
c. 114,000
d. 131,000
84.
B
Medium
Refer to:
4-9
Assuming that the company uses the weighted-average cost method, what
is the cost per equivalent unit for conversion costs for the month in
the Blending Department to the nearest cent?
a. P2.55
b. P2.53
c. P2.50
d. P2.44
85.
C
Medium
Refer to:
4-9
(Appendix) Assuming that the company uses the FIFO method, what are
the equivalent units of production for conversion costs for the
Blending Department for the month?
a. 119,100
b. 111,950
c. 115,250
d. 114,000
114
86.
A
Hard
Refer to:
4-9
(Appendix) Assuming that the company uses the FIFO method, what is the
cost per equivalent unit for conversion costs for the month in the
Blending Department to the nearest cent?
a. P2.52
b. P2.54
c. P2.44
d. P2.59
Reference: 4-10
(Appendix) Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device
for the mining industry. The company uses a process costing system and has only a
single processing department. The following information pertains to operations for
the month of May:
Units
Beginning work in process inventory ..... 16,000
Started into production during May ...... 100,000
Completed during May .................... 92,000
Ending work in process inventory ........ 24,000
The beginning work in process inventory was 60% complete with respect to materials
and 20% complete with respect to conversion costs. The ending work in process
inventory was 90% complete with respect to materials and 40% complete with respect to
conversion costs. The costs were as follows:
Beginning work in process inventory ....
Costs incurred during May ..............
Materials
P54,560
P468,000
Conversion
P35,560
P574,040
87.
B
Medium
Type: CMA
adapted
Refer To:
4-10
(Appendix) Using the FIFO method, the equivalent units of production

for May for materials are:
a. 82,400 units.
b. 104,000 units.
c. 107,200 units.
d. 108,000 units.
88.
D
Medium
CMA
adapted
Refer To:
4-10
(Appendix) Using the FIFO method, the equivalent units of production

for May for conversion costs are:
a. 85,600 units.
b. 88,800 units.
c. 95,200 units.
d. 98,400 units.
89.
B
Medium
CMA
adapted
Refer To:
4-10
(Appendix) Using the FIFO method, the cost per equivalent unit of
materials for May is closest to:
a. P4.12.
b. P4.50.
c. P4.60.
d. P4.80.
115
90.
B
Medium
CMA
adapted
Refer To:
4-10
(Appendix) Using the FIFO method, the cost per equivalent unit of
conversion cost for May is closest to:
a. P5.65.
b. P5.83.
c. P6.00.
d. P6.20.
91.
A
Medium
CMA
adapted
Refer To:
4-10
(Appendix) Using the FIFO method, the total cost of units in the
ending work in process inventory is closest to:
a. P153,200.
b. P154,800.
c. P155,300.
d. P157,000.
92.
C
Medium
CMA
adapted
Refer To:
4-10
Using the weighted-average method, the cost per equivalent unit of

materials for May is closest to:
a. P4.12.
b. P4.50.
c. P4.60.
d. P5.03.
93.
C
Medium
CMA
adapted
Refer To:
4-10
Using the weighted-average method, the cost per equivalent unit of

conversion cost for May is closest to:
a. P5.65.
b. P5.83.
c. P6.00.
d. P6.41.
94.
A
Medium
CMA
adapted
Refer To:
4-10
Using the weighted-average method, the total cost of the units in

ending work in process inventory is closest to:
a. P156,960.
b. P86,400.
c. P153,960.
d. P154,800.
Reference: 4-11
Reid Company uses a process costing system in which units go through several
departments. In the Cutting Department for June, units in the beginning work in
process inventory were 80% complete with respect to conversion costs. Units in the
ending work in process inventory were 25% complete with respect to conversion costs.
Other data for the department for June are as follows:
Units Conversion Cost
Work in process inventory on June 1 .......... 15,000
P 50,200
Units started into production ................ 145,000
Conversion costs incurred during June ........
P175,700
Units completed and transferred to the next
department during June .................. 130,000
116
95.
B
Hard
Refer to:
4-11
(Appendix) Assuming that the company uses the FIFO cost method, what
is the cost per equivalent unit for conversion costs for June to the
nearest whole cent?
a. P1.80
b. P1.40
c. P1.64
d. P1.35
96.
A
Hard
Refer to:
4-11
Assuming that the company uses the weighted-average method, what is

the cost per equivalent unit for conversion costs for June to the
nearest whole cent?
a. P1.64
b. P1.56
c. P1.74
d. P1.48
Reference: 4-12
Cherrington Company uses a process costing system. For May, the month just completed,
the beginning work in process inventory consisted of 50,000 units which were 60%
complete with respect to conversion costs. The ending inventory for the month was 20%
complete with respect to conversion costs. A summary of cost data for the month
follows:
Units
Work in process inventory, May 1 ......... 50,000
Units started into production ............ 180,000
Conversion costs incurred during May .....
Units completed and transferred out
during the month ...................... 190,000
Conversion Costs
P 30,000
P 690,000
97.
C
Hard
Refer to:
4-12
Assuming that Cherrington Company uses the weighted-average method,

what is the cost per equivalent unit for conversion costs for May to
the nearest whole cent?
a. P4.19
b. P4.00
c. P3.64
d. P3.83
98.
D
Hard
Refer to:
4-12
(Appendix) Assuming that Cherrington Company uses the FIFO method,

what is the cost per equivalent unit for conversion costs for May to
the nearest cent?
a. P4.31
b. P3.49
c. P4.29
d. P4.11
117
Reference: 4-13
Nando Company uses the weighted-average method in its process costing system.
Department J is the second of three sequential processes at the company. During
October, Department J collected the following data:
Work in process, October 1 .......

Units started ....................
Completed and transferred ........
Work in process, October 31 ......
Units
8,000
25,000
20,000
13,000
Costs for October:

Transferred In
Work in process, October 1 .... P33,000
Added during the month ........ P59,400
Labor and Overhead

Percentage Complete
60%
20%
Materials
P16,500
P82,500
Labor and
Overhead
P 31,200
P194,800

99.
B
Medium
Refer To:
4-13
The total cost assigned to units transferred out during October was:
a. P264,600.
b. P316,000.
c. P342,000.
d. P358,400.
100.
B
Medium
Refer To:
4-13
The total cost assigned to ending work in process inventory was:

a. P75,400.
b. P101,400.
c. P152,800.
d. P59,000.
Reference: 4-14
(Appendix) The following information was obtained from the records of the first
processing department of Keith Manufacturing Company for the month of February. The
company uses the FIFO method in its process costing system.
Units
Work in process inventory, Feb. 1 ....... 15,000
Started in assembly during the month .... 60,000
Work in process inventory, Feb. 28 ...... 20,000
Labor and Overhead

Percent Complete
30%
20%
All materials are added at the beginning of the manufacturing process.
118
101.
B
Medium
Refer To:
4-14
a. 50,000.
b. 60,000.
c. 54,500.
d. 75,000.
102.
A
Medium
Refer To:
4-14
month is:
a. 54,500.
b. 59,000.
c. 95,000.
d. 60,000.
Essay
103.
Hard
Able Inc. uses the weighted-average method in its process costing

system. The following data concern the operations of the company's
first processing department for a recent month.
Work in process, beginning:
Units in process ................................
Stage of completion with respect to materials ...
Stage of completion with respect to conversion ..
Costs in the beginning inventory:
Materials cost ................................
Conversion cost ...............................
P342
P2,394
Units started into production during the month ....

Units completed and transferred out ...............
21,000
20,700
Costs added to production during the month:

Materials cost ..................................
Conversion cost .................................
P44,136
P546,750
Work in
Units
Stage
Stage
process, ending:
in process ................................
of completion with respect to materials ...
of completion with respect to conversion ..
300
60%
30%
600
80%
30%
Required:
Prepare a production report for the department using the weightedaverage method.
119
Answer:
Weighted Average method:
Quantity schedule and equivalent units
Quantity
Schedule
Units to be accounted for:
Work in process, beginning .....
Started into production ........
Total units ..................
300
21,000
21,300
Equivalent units
Units accounted for as follows:

Transferred to next department
Work in process, ending ........
Total units .................
20,700
600
21,300
20,700
480
21,180
20,700
180
20,880
Costs per equivalent unit

Total
Cost
Cost to be accounted for:
Work in process, beginning.... P2,736
Cost added during the month...P590,886
Total cost (a) .............P593,622
Equivalent units (above) (b) ...
Cost per EU, (a) (b) .........
Combined cost per EU ........... P28.400
Materials
Conversion
P342
P44,136
P44,478
P2,394
P546,750
P549,144
21,180
P2.100
20,880
P26.300
Cost reconciliation
Total
Cost
Cost accounted for as follows:
Transferred out ........
P587,880
Work in process, ending:
Materials ............
P1,008
Conversion ...........
P4,734
Total work in process,
ending .................
P5,742
Total cost ...............
P593,622
Equivalent Units (above)

Materials
Conversion
20,700
20,700
480
180
120
104.
Hard
Barker Inc. uses the weighted-average method in its process costing

Units in process ................................
Materials cost ................................
Conversion cost ...............................
P2,440
P4,928

15,000
15,600

Materials cost ..................................
Conversion cost .................................
P96,470
476,362
Work in
Units
Stage
Stage
process, ending:
in process ................................
800
50%
20%
200
50%
90%
Required:
Using the weighted-average method:
a. Determine the equivalent units of production for materials
and
conversion costs.
b. Determine the cost per equivalent unit for materials and
conversion costs.
c. Determine the cost of units transferred out of the
department
during the month.
d. Determine the cost of ending work in process inventory in
the
department.
121
Answer:
a. through d. The answers to all of the questions can be found
filling out a production report as follows.
by

Quantity
Schedule
800
Started into production ........ 15,000
Total units ...................... 15,800
Equivalent units
Materials
Conversion
d.
Transferred to next department
Work in process, ending .......
Total units .................
15,600
200
15,800
15,600
100
15,700
15,600
180
15,780

Total
Cost
Work in process, beginning ..
P7,368
Cost added during the month . P572,832
Total cost (a) ............ P580,200
Equivalent units (above) (b) ..
Cost per EU, (a) (b) ........
Combined cost per EU ..........
Materials
Conversion
P2,440
P96,470
P98,910
P4,928
P476,362
P481,290
15,700
P6.300
15,780
P30.500
P36.800
Cost reconciliation
Total
Cost
Transferred out ............. P574,080
Materials .................
P630
Conversion ................
P5,490
Total work in process, ending .
P6,120
Total cost .................... P580,200

Materials
Conversion
15,600
15,600
100
180
122
105.
Medium
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.
Work in process, November 1 .....

Units started ...................
Completed and transferred out ...
Work in process, November 30 ....
Conversion
Percentage
Complete
80%
Units
10,000
28,000
30,000
8,000
30%
Costs for November:

Materials
Work in process, November 1 ..... P 34,500
Added during the month .......... P146,000
Conversion
P 48,600
P194,400

Required:
Compute the following items for the company's monthly production
report using the weighted-average method:
a. The equivalent units of production for materials.
b. The cost per equivalent unit for conversion.
c. The total cost assigned to units transferred out of the Curing
Department during November.
d. The cost assigned to work in process inventory as of
November
30.
Answer:
a. Units transferred out ................
Add: Equivalent units in ending
inventory (8,000 * 100%) ........
Equivalent units for materials .......
b. Units transferred out ................
Add: Equivalent units in ending
inventory (8,000 * 30%) .........
Equivalent units for conversion ......
30,000
8,000
38,000
30,000
2,400
32,400
Total conversion costs ............... 243,000

(P48,600 + P194,400)/32,400 EUs = P7.50 per EU
c. Materials cost per equivalent unit:
(P34,500 + P146,000)/38,000 EUs = P4.75 per EU
Costs transferred out:
30,000 units * (P7.50 + P4.75) = P367,500
d. Materials cost 8,000 units * P4.75 per EU .......... P38,000
Conversion 8,000 units * 30% complete * P7.50 per EU 18,000
Cost assigned to ending inventory .................. P56,000
123
106.
Medium
Carver Inc. uses the weighted-average method in its process costing

Work in
Units
Stage
Stage
process, beginning:
in process ................................

Work in
Units
Stage
Stage
process, ending:
in process ................................
700
50%
40%
3,000
200
80%
40%
Required:
Using the weighted-average method, determine the equivalent units of
production for materials and conversion costs by compiling the
"Quantity Schedule and Equivalent Units" portion of the production
report.
Answer:
Quantity
Schedule
700
Started into production ........ 23,000
Total units .................. 23,700
Equivalent units
Materials
Conversion
d.
Transferred to next department .
Total units ..................
23,500
200
23,700
23,500
160
23,660
23,500
80
23,580
124
107.
Hard
(Appendix) The Smith Company manufactures a product that goes through

two departments prior to completion. The following information is
available on work in one of these departments, the Forming Department,
during March:
Work in process, March 1 ........

Started into production .........
Completed and transferred out ...
Work in process, March 31 .......
Units Materials Conversion
70,000
5/7
3/7
460,000
450,000
80,000
7/8
5/8
Cost in the beginning work in process inventory and cost added during
the month were as follows:
Work in process, March 1 .........
Cost added during March ..........
Materials
P 42,190
P440,810
Conversion
P 38,000
P 394,000
The Forming Department is the first department in the production

process; after forming has been completed, the units are transferred
to the Finishing Department.
Required:
1. Calculate the equivalent units and unit cost for materials
and
conversion costs assuming the company uses the weightedaverage
method (round to the nearest tenth of a cent).
2. Calculate the equivalent units and unit cost for materials
and
conversion costs assuming the company uses the FIFO method (round to
the nearest tenth of a cent).
Answer:
Equivalent units:
Weighted-average:
Units completed and transferred out......
Work in process, March 31:
Materials: 80,000 x 7/8 = ..............
Conversion: 80,000 x 5/8 = .............
Equivalent units.........................
Materials
450,000
Conversion
450,000
70,000
520,000
50,000
500,000
Unit costs:
Materials: (P42,190 + P440,810)/520,000 = P0.929
Conversion: (P38,000 + P394,000)/500,000 = P0.864
125
Equivalent units:
FIFO:
Materials
Materials: 70,000 x 2/7 = .............. 20,000
Conversion:70,000 x 4/7 = ...............
Started and completed during March ...... 380,000
Materials: 80,000 x 7/8 = .............. 70,000
Conversion: 80,000 x 5/8 = .............
Equivalent units ........................ 470,000
Conversion
40,000
380,000
50,000
470,000
Unit costs:
Materials: P440,810/470,000 = P0.938
Conversion: P394,000/470,000 = P0.838
108.
Medium
Dita Company uses a process costing system. The following information

relates to one month's activity in the company's Curing Department.
Conversion
Percentage
Units
Complete
Beginning work in process inventory .. 10,000
20%
Units started ........................ 21,000
Units completed and transferred out .. 26,000
Ending work in process inventory ..... 5,000
80%
The conversion cost of the beginning inventory was P6,500. During the
month, P112,000 in additional conversion cost was incurred.
Required:
a. (Appendix) Assume that the company uses the FIFO method.
Compute:
1. The equivalent units of production for conversion for the
month.
2. The cost per equivalent unit for conversion for the month.
3. The total cost transferred out during the month.
4. The cost assigned to the ending work in process inventory.
b. Assume that the company uses the weighted-average cost
method.
Compute:
1. The equivalent units of production for conversion for the
month.
2. The cost per equivalent unit for conversion for the month.
3. The total cost transferred out during the month.
4. The cost assigned to the ending work in process inventory.
126
Answer:
a.
1. Units transferred out ..............
Deduct: equivalent units in
the beginning inventory ........
Add: equivalent units in
the ending inventory ...........
Equivalent units ..................
26,000
2,000
24,000
4,000
28,000
2. P112,000 28,000 EUs = P4 per EU.

3. Beginning inventory:
Cost in the beginning inventory .. P 6,500
Completion of the units in the
beginning inventory:
P4 x 1,000 x 80% .......
32,000
Units started and completed during
the period: P4 x 16,000 units ..
64,000
Total cost transferred out ....... P102,500
4. P4 per EU x 5,000 x 80% = P16,000
b.
1. Units transferred out ..............
Add: equivalent units in the
ending inventory ................
26,000
4,000
30,000
2. Cost in the opening inventory ...... P 6,500

Cost incurred during the period ... 112,000
Total cost ...................... P118,500
P118,500 30,000 Eus = P3.95 per EU
3. 26,000 units x P3.95 per EU = P102,700
4. P3.95 per EU x 5,000 x 80% = P15,800
127
109.
Hard
Production and cost data for the month of February for Process A of
the Packer manufacturing Company follow:
Production record:
Units in process, February 1
(100% complete with respect to materials;
25% complete with respect to conversion cost) ........
New units started in process ............................
Units completed .........................................
1/3 complete with respect to conversion cost) ........
Cost record:
Work in process inventory, February 1:
Materials ...............................
Conversion ...............................
Costs for February:
Materials issued .........................
Conversion ...............................
Total cost to be accounted for .............
P600
100
2,000
8,000
7,000
3,000
700
2,560
1,500
P4,760
The company uses the weighted-average cost method in its process

costing system.
Required:
1. Calculate the equivalent units and unit costs for February
materials and for conversion costs.
for
2. Determine the cost transferred to finished goods.

3. Determine the amount of cost that should be assigned to the
ending work in process and finished goods inventories.
Answer:
1. Equivalent units:
Materials:
Completed ......................................... 7,000
Work in process, Feb. 28 .......................... 3,000
Equivalent units .................................. 10,000
Conversion:
Completed ......................................... 7,000
Work in process, Feb. 28 (3,000 x 1/3) ............ 1,000
Equivalent units .................................. 8,000
Material
Unit costs:
Cost from work in process, Feb. 1 .....
Cost recorded in February .............
Total cost ............................
Equivalent units ......................
Unit cost .............................
600
2,560
P 3,160
10,000
P 0.316
Conversion
P
100
1,500
P1,600
8,000
P 0.20
128
2. and 3.
Units completed and transferred7,000 x P.516 ........ P3,612
Material cost: 3,000 units x 100% x P0.316 = ..........
948
Conversion cost: 3,000 units x 1/3 x P0.20 = ..........
200
Total cost accounted for .............................. P4,760
110.
Hard
Miller Company manufactures a product for which materials are added at

the beginning of the manufacturing process. A review of the companys
inventory and cost records for the most recently completed year revealed
the following information:
Units
Work in process, Jan. 1
80% complete with respect to
conversion costs ...............
Units started into production ....
Costs added during the year:
Materials ......................
Conversion .....................
Units completed during the year ..
Costs
_
100,000 P100,000
500,000
P157,500
P650,000
P997,500
450,000
The company uses the weighted-average cost method in its process costing
system. The ending inventory is 50% complete with respect to conversion
costs.
Required:
1. Compute the equivalent units of production and the cost per
equivalent units for materials and for conversion costs.
ending work in process inventory.
129
Answer:
Equivalent units:
Units completed and transferred out ...
Work in process, December 31:
Materials: 150,000 x 1.00 = ..........
Conversion: 150,000 x 0.50 = .........
Equivalent units ......................
Materials
450,000
Conversion
450,000
150,000
_______
600,000
75,000
525,000
Unit costs:
Materials
Costs in beginning work in process .... P100,000
Costs added during the year ........... 650,000
Total ................................. P750,000
Equivalent units ...................... 600,000
Unit cost ............................. P
1.25
Costs to be accounted for:
Work in process, beginning ............
Cost added by department ..............
Total cost to be accounted for ........
Conversion
P 157,500
997,500
P1,155,000
525,000
P
2.20
P
257,500
1,697,500
P1,905,000

Transferred to finished goods:
450,000 x (P1.25 + P2.20) = ...........
Materials150,000 x P1.25 = ..........
Conversion75,000 x P2.20 = ..........
Total costs accounted for .............
P1,552,500
187,500
165,000
P1,905,000
Ending work in process:

Materials: ............................
Conversion ............................
Total .................................
P187,500
165,000
P352,500
130
111.
Medium
The Hardy Company manufactures a product that goes through two

departments prior to completion. The following information is
available on work in one of these departments, the Molding Department,
during the month of July:
Work in process, July 1 .....

Started into production .....
Completed ...................
Work in process, July 31 ....
3/5
2/5
Units
50,000
440,000
430,000
60,000
5/6
2/3
The Molding Department is the first department in the production

process; after molding has been completed, the units are transferred
to the Finishing Department.
Required:
Calculate the equivalent units for materials and conversion costs
assuming the company uses the weighted-average method. Round to the
nearest tenth of a cent.
Answer:
Equivalent units:
Weighted-average:
Work in process, July 31:
Materials: 60,000 x 5/6 = ........
Conversion: 60,000 x 2/3 = .......
Materials
430,000
Conversion
430,000
50,000
480,000
40,000
470,000
131
112.
Medium
Sharp Company has a process costing system. The following data relate
to the company's Mixing Department for a recent month:
Beginning work in process inventory

Units started into production .....
Ending work in process inventory ..
Conversion
Percentage
of Completion
60%
Units
5,000
40,000
37,000
8,000
25%
All materials are added at the beginning of the Mixing process.

Required:
a. (Appendix) Compute the equivalent units of
materials using the FIFO method.
b. (Appendix) Compute the equivalent units of
conversion using the FIFO method.
c. Compute the equivalent units of production
using the weighted-average method.
d. Compute the equivalent units of production
using the weighted-average method.
production for
production for
for materials
for conversion
Answer:
a. & b.
Materials
Units transferred out ..................
37,000
Deduct: equivalent units in beginning
inventory ...........................
5,000
32,000
Add: equivalent units in ending
inventory ...........................
8,000
Equivalent units of production .........
40,000
c. & d.
Units transferred out ..................
Add: equivalent units in the ending
inventory ...........................
Equivalent units of production .........
Conversion
37,000
3,000
34,000
2,000
36,000
37,000
37,000
8,000
45,000
2,000
39,000
132
113.
Hard
(Appendix) Darver Inc. uses the FIFO method in its process costing
Units in process ..................................
Stage of completion with respect to materials .....
Stage of completion with respect to conversion ....
Material cost ...................................
Conversion cost..................................
P376
P2,376
Units started into production during the month.......

Units completed and transferred out..................
21,000
20,400
100
80%
60%

Material cost ..................................... P93,645
Conversion cost.................................... P825,531
Work in
Units
Stage
Stage
process, ending:
in process ..................................
of completion with respect to materials .....
of completion with respect to conversion ....
700
70%
50%
Required:
Prepare a production report for the department using the FIFO method.
Answer:
Quantity Schedule and Equivalent Units
Quantity
Schedule
Total units ..................
100
21,000
21,100
Equivalent units
d.
Transferred out:
From the beginning inventory...
100
Started and completed ......... 20,300
700
Total units ................. 21,100
20
20,300
490
20,810
40
20,300
350
20,690
133

Total
Cost
Materials
Conversion
P93,645
P825,531
20,810
P4.500
20,690
P39.900

Work in process, beginning...
P2,752
Cost added during the month.. P919,176
Total cost (a)............. P921,928
Equivalent units (above) (b)...
Cost per EU, (a) (b)..........
Combined cost per EU........... P44.400
Cost Reconciliation
Total
Cost
Transferred out:
From the beginning inventory:
Cost in the beginning inventory.
P2,752
Cost to complete these units:
Materials ....................
P90
Conversion ...................
P1,596
Total cost .................
P4,438
Units started and completed....... P901,320
Total cost transferred............ P905,758
Materials ......................
P2,205
Conversion .....................
P13,965
Total work in process, ending...
P16,170
Total cost...................... P921,928

Materials
Conversion
20
40
20,300
20,300
490
350
134
114.
Hard
(Appendix) Easy Inc. uses the FIFO method in its process costing
Units in process ................................
Materials cost ................................
Conversion cost ...............................
P594
P8,256

26,000
25,500

Materials cost ..................................
Conversion cost .................................
P79,732
P887,626
Work in
Units
Stage
Stage
process, ending:
in process ................................
300
60%
80%
800
50%
40%
Required:
Using the FIFO method:
a. Determine the equivalent units of production for materials
and
conversion costs.
b. Determine the cost per equivalent unit for materials and
conversion costs.
c. Determine the cost of units transferred out of the
department
during the month.
d. Determine the cost of ending work in process inventory in
the
department.
Answer:
a. through d. can be answered by completing a production report
follows:
as

Quantity
Schedule
300
26,000
Total units ..................
26,300
135
Equivalent units
d.
Transferred out:
From the beginning inventory
Started and completed ......
Work in process, ending ......
Total units ...............
300
25,200
800
26,300
120
25,200
400
25,720
60
25,200
320
25,580
Costs Per Equivalent Unit

Total
Cost
Work in process, beginning ...
P8,850
Cost added during the month .. P967,358
Total cost (a) ............. P976,208
Equivalent units (above) (b) ...
Cost per EU, (a) (b) .........
Combined cost per EU ...........
P79,732
P887,626
25,720
P3.100
25,580
P34.700
P37.800
Cost Reconciliation
Total
Cost
Transferred out:
From the beginning inventory:
Cost in the beginning inventory
Cost to complete these units:
Materials ...................
P8,850
P372
Conversion ..................
P2,082
Total cost ................ P11,304
Units started and completed .... P952,560
Total cost transferred ......... P963,864
Materials .....................
P1,240
Conversion .................... P11,104
Total work in process, ending. P12,344
Total cost ..................... P976,208

120
60
25,200
25,200
400
320
136
115.
Medium
(Appendix) Farwest Inc. uses the FIFO method in its process costing
Work in
Units
Stage
Stage
process, beginning:
in process ................................

Work in
Units
Stage
Stage
process, ending:
in process ................................
800
70%
50%
22,000
300
80%
70%
Required:
Using the FIFO method, determine the equivalent units of production
for materials and conversion costs by compiling the "Quantity Schedule
and Equivalent Units" portion of the production report.
Answer:
Quantity
Schedule
800
22,000
Total units ..................
22,800
Equivalent units
d.
Transferred out:
From the beginning inventory .
Started and completed ........
Total units .................
800
21,700
300
22,800
240
21,700
240
22,180
400
21,700
210
22,310
137
116.
Hard
(Appendix) Production and cost data for the month of February for
Process A of the Packer Manufacturing Company were as follows:
Production record:
25% complete with respect to conversion cost) ........
New units started in process ............................
Units completed .........................................
1/3 complete with respect to conversion cost) ........
Cost record:
Materials ............................
Conversion ............................
Costs for February:
Materials issued ......................
Conversion ............................
Total cost to be accounted for ..........
P600
100
2,000
8,000
7,000
3,000
700
2,560
1,500
P4,760
The company uses the FIFO cost method in its process costing system.
Required:
1. Calculate the equivalent units and unit costs for February
materials and conversion costs.
for

ending work in process and finished goods inventories.
138
Answer:
1. Equivalent units:
Materials:
Completion of work in process at February 1 ............
Units started and completed during the period ..........
Units in process at February 28 ........................
Equivalent units .......................................
5,000
3,000
8,000
Conversion:
Completion of work in process at February 1
(2,000 x 0.75) .......................................
Units started and completed during the period ..........
Units in process at February 28 (3,000 x 1/3) ..........
Equivalent units .......................................
1,500
5,000
1,000
7,500
Unit costs:
Materials: P2,560/8,000 = ..............................
Conversion: P1,500/7,500 = .............................
Total unit cost ........................................
P0.32
0.20
P0.52
2. and 3.
From beginning work in process inventory (2,000 units):
Cost from preceding period ............................. P 700
Materials added ........................................
-0Conversion: 2,000 units x 0.75 x P0.20 .................
300
Completed cost of opening inventory .................... P1,000
From new production started in current month
(5,000 units): 5,000 units x P0.52 .................. 2,600
Total cost of completed production ..................... P3,600
Material cost: 3,000 units x 100% x P0.32 ....... 960
Conversion cost: 3,000 units x 1/3 x P0.20 ...... 200
1,160
Total cost accounted for ............................... P4,760
139

Process Costing Systems & Equivalent Units

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Process Costing Systems & Equivalent Units

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Chapter 4

Systems Design: Process Costing

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