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Exam 6: Process Costing

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Question 61

Multiple Choice

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Normal spoilage units resulting from a continuous process

A) are extended to the EUP schedule.
B) result in a higher unit cost for the good units produced.
C) result in a loss being incurred.
D) cause estimated overhead to increase.

E) A) and C)
F) B) and C)

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Question 62

Multiple Choice

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Mercury Corporation Material A is added at the start of production, while Material B is added uniformly throughout the process. Refer to Mercury Corporation Assuming a weighted average method of process costing, compute the average cost per EUP for Material B.

A) $20.00
B) $31.25
C) $20.10
D) $31.00

E) None of the above
F) A) and B)

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Question 63

Multiple Choice

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Knight Corporation Knight Corporation has the following information for the current month: All materials are added at the start of the production process. Knight Corporation inspects goods at 75 percent completion as to conversion. Refer to Knight Corporation. What are equivalent units of production for material, assuming FIFO?

Mercury Corporation Material A is added at the start of production, while Material B is added uniformly throughout the process. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP for conversion.

Equivalent units of production are equal to the

Simpson Company Simpson Company adds material at the start of production. The following production information is available for September: Refer to Simpson Company. How many units were started and completed in the period?

Crafton Corporation Crafton Corporation has the following information for the current month: All materials are added at the start of the production process. Crafton Corporation inspects goods at 75 percent completion as to conversion. Refer to Crafton Corporation. Assume that the costs per EUP for material and conversion are $1.00 and $1.50, respectively. Using FIFO, what is the total cost assigned to the transferred-out units (rounded to the nearest dollar) ?

Mercury Corporation Material A is added at the start of production, while Material B is added uniformly throughout the process. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute the average cost per EUP for Material A.

The cost of abnormal continuous losses is

Ormandy Company uses a FIFO process costing system. The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month. The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process?

Process costing is used in companies that

The weighted average method combines beginning inventory and current production to compute cost per unit of production.

Discrete production losses are assumed to occur throughout the process.

Consider the following data for a cooking department for the month of February: *Direct material, 100% complete; conversion costs, 25% complete ~Direct material, 100% complete; conversion costs, 75% complete Inspection occurs when production is 100 percent completed. Normal spoilage is 11 percent of good units completed and transferred out during the current period. The following cost data are available: Required: Prepare a detailed cost of production report. Use the FIFO method. Distinguish between normal and abnormal spoilage.

The method of neglect handles spoilage that is

When standard costs are used in process costing,

The following costs were accumulated by Department 2 of Tulsa Company during November: Production for November in Department 2 (in units): Materials are not added in Department 2 until the very end of processing Department 2. Required: Compute the cost of units completed and the value of ending WIP for:

Four Seasons Company Four Seasons Company adds material at the start to its production process and has the following information available for August: Refer to Four Seasons Company. Compute the number of units started and completed in August.

Mercury Corporation Material A is added at the start of production, while Material B is added uniformly throughout the process. Refer to Mercury Corporation Assuming a FIFO method of process costing, compute EUP units for Materials A and B.

Chapman Corporation The following information is available for Chapman Corporation for the current month: All materials are added at the start of production and the inspection point is at the end of the process. Refer to Chapman Corporation. What is the total cost assigned to goods transferred out using weighted average?