Q: Which formula correctly calculates the cost per equivalent unit using the weighted-average method?

$$\text{Cost per EUP} = \frac{\text{Beginning WIP costs} + \text{Costs added during the period}}{\text{Equivalent units of production}}$$

Q: Which of the following is the correct formula for calculating equivalent units of production for conversion costs?

$$\text{Equivalent units} = \text{Units transferred out} + (\text{Ending WIP units} \times \text{Percentage completion for conversion costs})$$

Question 1

Which of the following best describes the main difference between job order costing and process costing systems?

Accepted Answer

Job order costing accumulates costs by job, while process costing accumulates costs by process.

Question 2

A company has 10,000 units in ending Work-in-Process Inventory that are 100% complete for direct materials and 25% complete for conversion costs. What are the equivalent units for conversion costs?

Accepted Answer

$$2,500$$

Question 3

Which formula correctly calculates the cost per equivalent unit using the weighted-average method?

Accepted Answer

$$	ext{Cost per EUP} = \frac{	ext{Beginning WIP costs} + 	ext{Costs added during the period}}{	ext{Equivalent units of production}}$$

Question 4

In the Assembly Department, 8,000 units are in beginning WIP, 42,000 units are started, and 40,000 units are completed and transferred out. How many units are in ending WIP?

Accepted Answer

$$10,000$$

Question 5

Which of the following is NOT a use of the production cost report?

Accepted Answer

Calculating depreciation expense for office equipment

Question 6

A company uses the weighted-average method. If the Assembly Department has $$\9$$,800$$ in beginning direct materials costs and $$\$$130,200 in $$direct materials costs added during July, what is the total direct materials cost to account for?

Accepted Answer

$$\140$$,000$

Question 7

Which journal entry records the transfer of completed units from the Assembly Department to the Cutting Department?

Accepted Answer

Debit: Work-in-Process Inventory—Cutting; Credit: Work-in-Process Inventory—Assembly

Question 8

If the Cutting Department adds direct materials at the end of the process, how are equivalent units for direct materials in ending WIP calculated?

Accepted Answer

By counting only the units in ending WIP, if they are 100% complete for direct materials

Question 9

Which of the following best describes 'conversion costs' in process costing?

Accepted Answer

Costs of direct labor and manufacturing overhead

Question 10

A company has actual manufacturing overhead costs of $$\50$$,500$$ and allocated overhead of $$\$$53,000. $$What journal entry is required to adjust for the overallocation?

Accepted Answer

Question 11

Which of the following is true about the FIFO method in process costing?

Accepted Answer

It accounts for beginning inventory separately from units started and completed during the period.

Question 12

If a company wants to set sales prices based on production costs, which report should it use?

Accepted Answer

Production cost report

Question 13

Which of the following is the correct formula for calculating equivalent units of production for conversion costs?

Accepted Answer

$$	ext{Equivalent units} = 	ext{Units transferred out} + (	ext{Ending WIP units} 	imes 	ext{Percentage completion for conversion costs})$$

Question 14

A company started 42,000 units, had 8,000 units in beginning WIP, and completed and transferred out 40,000 units. If ending WIP is 100% complete for direct materials, how many equivalent units for direct materials are there?

Accepted Answer

$$50,000$$

Question 15

Which of the following is a reason companies use process costing?

Accepted Answer

To allocate costs to identical units produced in a continuous process

Question 16

In a process costing system, which account is debited when direct materials are used in production?

Accepted Answer

Work-in-Process Inventory

Question 17

If the Cutting Department receives 40,000 units from the Assembly Department and completes 38,000 units, how many units remain in the Cutting Department’s ending WIP?

Accepted Answer

$$5,000$$

Question 18

Which of the following best describes 'transferred-in costs'?

Accepted Answer

Costs incurred in a previous process and brought into a later process as part of the product’s cost

Question 19

A company sells 35,000 puzzles at $$\8.00$ each. The cost per puzzle is $$\$$5.30. $$What is the total cost of goods sold?

Accepted Answer

$$\185$$,500$

Process Costing: Concepts, Calculations, and Production Cost Reports

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