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Exam 5: Process Costing and Operation Costing

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Question 21

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To calculate equivalent units,multiply the partially completed physical units in the process by the percentage of completion.

A) True
B) False

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Question 22

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Softcloth Textile Pty Ltd manufactures a variety of fabrics.The Weaving Department had 1000 units in work in process on April 1,which were 20 per cent complete as to conversion costs.During April,8000 units were completed and transferred.On April 30,4000 units remained in work in process 50 per cent complete as to conversion costs.Using the FIFO method of process costing,calculate the equivalent units of conversion for the month of April.

A) 9000
B) 9800
C) 10 000
D) 12 000

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

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Question 23

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Normal spoilage can always be avoided by a more efficient approach to production.

Assuming that there was no beginning work in process inventory and the ending work in process inventory is 50 per cent complete as to conversion costs,the number of equivalent units as to conversion costs would be:

In which of the following ways is abnormal spoilage accounted for?

In both job and process costing,the journal entry to record cost of goods sold is as follows.

Raphael's Refining uses a weighted average process costing system.For a particular period,its opening inventory consisted of 100 items (60 per cent complete as to conversion costs) whose costs were $1600 made up of material $300 and conversion cost $1300.During the month,1000 items were started and 950 were completed.Ending inventory of WIP was complete.There was no spoilage.Costs placed in process during the month were materials $1600 and conversion costs $13 700.Materials are added at the halfway point.What is the amount of cost that would be allocated to goods completed in the period?

Which of the following represents a correct sequence in preparing a departmental production report?

The technical term for costs moving between one department and the next in a multidepartment process is:

South River Chemicals Pty Ltd manufactures a product called Zybek.Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process.The following data pertains to the month of May.Using the weighted average method of process costing,calculate the equivalent units of direct materials and conversion costs for the month of May.

The major difference between weighted average and FIFO is:

Operation costing is just another name for process costing as both systems trace all production costs to processes or departments.

Collins Chemicals produces a compound through two processes.For its second process for a particular period,Collins had an opening WIP inventory of 100 units halfway through the process;2300 units completed in the period;and a closing WIP inventory of 400 units ¾ of the way through the process.Materials are added at the beginning of the process and conversion costs are incurred uniformly.Calculate the equivalent units for transferred in costs for the period if the firm used weighted average costing.

Latta Coffee Ltd has two main processes: roasting and packaging.Roasted coffee beans are transferred to the packaging department before the final product is shipped to customers.The following information for the month of April for the Roasting department is available: total cost of goods completed and transferred from Roasting department to Packaging department is $25 000;ending work in progress in April is $1000;number of equivalent units of conversion is $5000 units.Which of the following journal entries is appropriate at the end of April?

Which of the following represents the production units used to calculate equivalent units under the weighted average method?

Under Australian accounting standards,which methods can be used to prepare the departmental production report?

If the FIFO method is used,the cost of beginning work in process should be included in: Unit Cost Cost of units transferred out

Operational costing is appropriate where: i.there are different material inputs ii.there are common material inputs iii.processes are identical iv.different combinations of specific processes apply to different products

Banana Shirts produces t-shirts in large batches.Most of its t-shirts are made of regular cotton,although some are made from ethically produced cotton.The manufacturing process is relatively simple;most t-shirts go through similar processes;the main difference is whether the t-shirt requires embroidery or printing.The most appropriate costing system for Banana Shirts is:

Collins Chemicals produces a compound through two processes.For its second process for a particular period,Collins had an opening WIP inventory of 100 units halfway through the process;2300 units completed in the period;and a closing WIP inventory of 400 units ¾ of the way through the process.Materials are added at the beginning of the process and conversion costs are incurred uniformly.Calculate the equivalent units for transferred in costs for the period if the firm used FIFO costing.