NAME: SEMI-FINAL LONG STRATEGIC COST

QUIZ MANAGEMENT
YR/SEC DATE RAW SCORE EQUIVALENT SUBJECT PROF: ACCOUNTING 106
M.U. BULIC, CPA
REMINDER: ERASURE MEANS WRONG ANSWER. THINK BEFORE YOU FINALIZE YOUR ANSWER.

TEST 1. MULTIPLE CHOICE. THEORETICAL. ENCIRCLE THE CORRECT ANSWER.

1. Costing method, which calculates per equivalent unit cost of all production related work done, till calculated date is
termed as
A. weighted average method C. net present value method
B. Gross production method D. net present value method
2. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units
A. started and completed during the period.
B. residing in beginning Work in Process Inventory.
C. residing in ending Work in Process Inventory.
D. uncompleted in Work in Process Inventory.
3. Second step in processing costing system is to
A. summarize total costs C. compute cost for each equivalent unit
B. summarize flow of output D. compute output in units
4. Third step in process costing system is to
A. summarize flow of output C. compute output in units
B. summarize total costs D. compute cost for each equivalent unit
5. Which of the following is not a feature of a process production system?
A. Repetitive production C. Heterogeneous products
B. High production volume D. Low product flexibility
6. The first step in determining the cost per EUP per cost component under the weighted average method is to
A. add the beginning Work in Process Inventory cost to the current period's production cost.
B. divide the current period's production cost by the equivalent units.

C. subtract the beginning Work in Process Inventory cost from the current period's
production cost.
D. divide the current period's production cost into the EUP.

7. Equivalent units of production may be computed for

A. Labor C. Materials and Overhead Only
B. Labor & materials only D. Labor, materials and overhead
8. On a process cost summary, the total costs to be accounted for and the total costs accounted for are
A. different in amount by the amount of underapplied overhead
B. should be the same
C. different in amount by the amount of overapplied overhead
D. seldom the same, because of spoiled units
9. In a cost of production report using process costing, transferred-in costs are similar to the
A. cost of material added at the beginning of production.
B. conversion cost added during the period.
C. cost transferred out to the next department.
D. cost included in beginning inventory.
10. The section of the process cost summary in which the details for the calculation of the unit processing costs for
materials, labor, and overhead are shown is the:
A. Costs charged to the department C. Equivalent unit processing costs
B. Assignment of costs to the output of the department D. Total costs to be accounted for
11. In process costing
A. only high level costs are assigned to products all other costs are traced
B. only low level costs are assigned to products all other costs are traced
C. all costs are assigned to products
D. all costs are traced to products
12. On a cost of production report, beginning work in process
A. Is included in the quantity to be accounted for
B. Is included in the quantity accounted for
C. Is not included in the report
D. Appears in the job costs sheet only
13. Abalone Company has used $2450 worth of materials and $3760 in conversion costs for the production of 500 units
of AbA. The product cost so determined have managerial implications in
A. resource spending B. resource use C. quality engineering D. a and b

14. The five steps in process costing include

A. unit reconciliation, equivalent number of units, costs to account for, cost per unit, and costs accounted for
B. beginning inventory, costs added, units completed, ending inventory, and spoilage
C. units to account for, units accounted for, equivalent number of units, costs to account for, and unit costs
D. unit reconciliation, equivalent number of units, cost of work in process beginning, costs added during the
period, and unit cost
15. Costs transferred in from another department in a process costing environment are treated as
A. a separate cost item in the new department
B. an addition to material costs in the new department
C. an addition to conversion costs in the new department
D. partly material and partly conversion cost in the new department
16. Equivalent units of production are equal to the
A. units completed by a production department in the period.
B. number of units worked on during the period by a production department.
C number of whole units that could have been completed if all work of the period had been used to produce
whole units.
D identifiable units existing at the end of the period in a production department.
17. Cost of previous department is a part of
A. transferred-in costs B. transferred-out costs C. FIFO costs D. LIFO costs
18. To compute equivalent units of production using the FIFO method of process costing, work for the current period
must be stated in units
A. completed during the period and units in ending inventory.
B. completed from beginning inventory, units started and completed during the period,
and units partially completed in ending inventory.
C. started during the period and units transferred out during the period.
D. processed during the period and units completed during the period.
19. Fifth step in process costing system is to
A. allocate separable costs
B. allocate joint costs
C. compute gross margin
D. assign total cost to completed units
20. A process costing system is used by a company that
A. produces heterogeneous products.
B. produces items by special request of customers.
C. produces homogeneous products.
 D. accumulates costs by job.

TEST 2. MULTIPLE CHOICE COMPUTATIONAL. ENCIRCLE THE CORRECT LETTER AND SHOW SUPPORTING COMPUTATION
FOR ADDITIONAL POINTS.

1. On May 1, the production department had 6,000 units 50% complete as to labour and overhead; materials are
added at the beginning of the process. During May, 30,000 units were started into process. At the end of May, the
ending goods in process of 8,000 units were 80% complete as to labour and overhead. The number of units
transferred to the next department were:
A. 33,400 B.. 28,000 C. 26,600 D. 31,000
The number of units transferred out is equal to the beginning units in process, plus the number of units started, less
the ending units in process (6,000 + 30,000 - 8,000), or 28,000 units. The number of units transferred out is equal to
the beginning units in process, plus the number of units started, less the ending units in process (6,000 + 30,000 -
8,000), or 28,000 units.

2. The beginning goods in process were 3,000 units, which were 40% complete as to labour and overhead. During the
accounting period, 15,000 units were completed and transferred to finished goods. Five hundred units remain in
process and are 60% completed. The number of units started during the accounting period were:
A. 15,500 B. 18,500 C. 12,000 D. 12,500
The beginning units plus the units started are equal to the units transferred out plus the ending units (beginning units
+ units started = units transferred out + ending units). 3,000 + x = 15,000 + 500. Units started (x) = 15,000 + 500 - 3,000
= 12,500.

ITEMS 3 TO 12 ARE BASED ON THE DATA OF CHERUB COMPANY

Cherub Co.
Beginning inventory (30% complete as to Material B 700 units
and 60% complete for conversion)
Started this cycle 2,000 units
Ending inventory (50% complete as to Material B and 500 units
80% complete for conversion)

Beginning inventory costs:

Material A $14,270
Material B 5,950
Conversion 5,640

Current Period costs:

Material A $40,000
Material B 70,000
Conversion 98,100

Material A is added at the start of production, while Material B is added uniformly throughout the process.
3. Refer to Cherub Company. Assuming a weighted average method of process costing, compute EUP units for
Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,240 and 2,700, respectively

ANS: B
Weighted Average Material A Material B
Beginning Work in Process 700 700
Units Started and Completed 1500 1500
Ending Work in Process 500 250
 EUP Materials 2700 2450
4. Refer to Cherub Company Assuming a FIFO method of process costing, compute EUP units for Materials A and B.
a. 2,700 and 2,280, respectively
b. 2,700 and 2,450, respectively
c. 2,000 and 2,240, respectively
d. 2,450 and 2,880, respectively

ANS: C
FIFO Material A Material B
Beginning Work in Process 0 490
Units Started and Completed 1500 1500
Ending Work in Process 500 250
EUP Materials 2000 2240
5. Refer to Cherub Company Assuming a weighted average method of process costing, compute EUP for conversion.
A. 2,600 B. 2,180 C. 2,000 D. 2,700

ANS: A

Weighted Average
Beginning Work in Process 700
Units Started and Completed 1500
Ending Work in Process 400
2600

6. Refer to Cherub Company Assuming a FIFO method of process costing, compute EUP for conversion.
A. 2,240 B. 2,180 C. 2,280 D. 2,700

ANS: B

FIFO
Beginning Work in Process (700 * 40%) 280
Units Started and Completed 1500
Ending Work in Process (500 * 80%) 400
2180

7. Refer to Cherub Company Assuming a weighted average method of process costing, compute the average cost per
unit for Material A.
A. $20.10 B. $20.00 C. $31.25 D. $31.00

ANS: A

Weighted Average: Material A

Beginning $ 14,270
Current Period 40,000
54,270 ÷ 2,700 = $ 20.10
units per unit

8. Refer to Cherub Company Assuming a FIFO method of process costing, compute the average cost per EUP for
Material A.
A. $31.25 B. $20.10 C. $20.00 D. $31.00

ANS: C
Material A Costs Equivalent Average Cost
(Current Period) Units per EUP
$40,000 2,000 $20.00
9. Refer to Cherub Company Assuming a FIFO method of process costing, compute the average cost per EUP for
Material B.
A. $31.25 B. $20.10 C. $20.00 D. $31.00

ANS: A

Material B Costs Equivalent Average Cost

(Current Period) Units per EUP
$70,000 2,240 $31.25
10. Refer to Cherub Company Assuming a weighted average method of process costing, compute the average cost per
EUP for Material B.
A. $31.25 B. $20.10 C. $20.00 D. $31.00

ANS: D
Material B Costs Equivalent Average Cost
(Beginning Units per EUP
Inventory and
Current Period)
$75,950 2,450 $31.00
11. Refer to Cherub Company Assuming a FIFO method of process costing, compute the average cost per EUP for
conversion.
A. $45.50 B. $45.00 C. $43.03 D. $47.59

ANS: B
Conversion Costs Equivalent Average Cost
(Current Period) Units per EUP
$98,100 2,180 $45.00

12. Refer to Cherub Company Assuming a weighted average method of process costing, compute the average cost per
EUP for conversion.
A. $45.50 B. $45.00 C. $39.90 D. $47.59
ANS: C
Conversion Costs Equivalent Average Cost
(Beginning WIP and Units per EUP
Current Period)
$98,100 + $5,640 2,600 $39.90

ITEMS 1 TO 12 ARE BASED ON Maxwell Company

Maxwell Company adds material at the start of production. The following production information is available for June:

Beginning Work in Process Inventory

(45% complete as to conversion) 10,000 units
Started this period 120,000 units
Ending Work in Process Inventory
(80% complete as to conversion) 8,200 units

Beginning Work in Process Inventory Costs:

Material $24,500
Conversion 68,905

Current Period Costs:

Material $ 75,600
Conversion 130,053
13. Refer to Maxwell Company. How many units must be accounted for?
A. 118,200 B. 128,200 C. 130,000 D. 138,200

ANS: C
Beginning Work in Process 10,000
Units Started 120,000
Total Units 130,000

14. Refer to Maxwell Company. What is the total cost to account for?
B. $93,405 B. $205,653 C. $275,558 D. $299,058

ANS: D
BWIP: Materials $ 24,500
BWIP: Conversion 68,905
Current Period: Materials 75,600
Current Period: Conversion 130,053
Total Costs $299,058
15. Refer to Maxwell Company. How many units were started and completed in the period?
C. 111,800 B. 120,000 C. 121,800 D. 130,000
ANS: A
Units started this period 120,000
Less: Ending Work in Process 8,200
Units started and completed this period 111,800
16. Refer to Maxwell Company. What are the equivalent units for material using the weighted average method?
D. 120,000 B. 123,860 C. 128,360 D. 130,000
ANS: D
Equivalent Units
Beginning Inventory (10,000 * 100%) 10,000
Started and Completed (111,800) 111,800
Ending Inventory (8,200 * 25%) 8,200
130,000 equivalent units
17. Refer to Maxwell Company. What are the equivalent units for material using the FIFO method?
E. 111,800 B. 120,000 C. 125,500 D. 130,000

ANS: B
Equivalent Units
Beginning Inventory (Ignored for FIFO) 0
Started and Completed (111,800) 111,800
Ending Inventory (8,200 * 25%) 8,200
120,000 equivalent units
18. Refer to Maxwell Company. What are the equivalent units for conversion using the weighted average method?
F. 120,000 B. 123,440 C. 128,360 D. 130,000

ANS: C
Beginning Work in Process 10,000 45% 4,500
+ Completion of Units in Process 10,000 55% 5,500
+ Units Started and Completed 111,800 100% 111,800
+ Ending Work in Process 8,200 80% 6,560
Equivalent Units of Production 128,360

19. Refer to Maxwell Company. What are the equivalent units for conversion using the FIFO method?
G. 118,360 B. 122,860 C. 123,860 D. 128,360

ANS: C
Beginning Work in Process (ignored) 10,000 0% -
+ Completion of Units in Process 10,000 55% 5,500
+ Units Started and Completed 111,800 100% 111,800
+ Ending Work in Process 8,200 80% 6,560
Equivalent Units of Production 123,860
20. Refer to Maxwell Company. What is the material cost per equivalent unit using the weighted average method?
H. $,58 B. $.62 C. $.77 D. $.82
Material Costs:
Beginning $ 24,500
Current Period 75,600
100,100 ÷ 130,000 = $ 0.77
units per unit
21. Refer to Maxwell Company. What is the conversion cost per equivalent unit using the weighted average method?
I. $1.01 B. $1.05 C. $1.55 D. 1.61
Conversion Costs:
Beginning $ 68,905
Current Period 130,053
198,958 ÷ 128,360 = $ 1.55
units per unit
22. Refer to Maxwell Company. What is the cost of units completed using the weighted average?
J. $237,510 B. $266,742 C. $278,400 D. $282,576
Units Completed Costs per Equivalent Unit Total
121,800 (1.55 + .77) = $2.32 $282,576
23. Refer to Maxwell Company. What is the conversion cost per equivalent unit using the FIFO method?
K. $1.05 B. $.95 C. $1.61 D. $1.55
Conversion Costs:
Beginning (Ignored)
Current Period 130,053
130,053 ÷ 123,860 = $ 1.05
units per unit
24. Refer to Maxwell Company. What is the cost of all units transferred out using the FIFO method?
L. $204,624 B. $191,289 C. $287,004 D. $298,029

ANS: C
Units Completed Costs per Equivalent Unit Total
121,800 (1.05 + .63) = $1.68 $204,624

25. Long Company transferred 5,500 units to Finished Goods Inventory during September. On September 1, the
company had 300 units on hand (40 percent complete as to both material and conversion costs). On June 30, the
company had 800 units (10 percent complete as to material and 20 percent complete as to conversion costs). The
number of units started and completed during September was:
M. 5,200 B. 5,380 C. 5,500 D. 6,300

ANS: A
Units Transferred Out 5,500
Less: Units in Beginning Inventory (300)
Units Started and Completed 5,200