ACCT 505 Week 2 Quiz (MCQs & Explanatory) SOLVED

ACCT 505 Week 2 Quiz (MCQs & Explanatory) SOLVED

1. TCO F) Computing unit product costs involves averaging in:

Job-Order Costing
Process Costing
A
Yes
No

B
Yes
Yes

C
No
Yes

D
No
No

(Points : 5)
Choice A.
Choice B.
Choice C.
Choice D.

2. (TCO F) Luft 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:

Units
Percent Complete with respect to Conversion
Beginning work in process inventory
11,000
90%
Started in production during June
58,000

Ending work in process inventory
17,000
10%

According to the company's records, the conversion cost in beginning work in process inventory was \$79,893 at the beginning of June. Additional conversion costs of \$343,830 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.) (Points : 5)
\$8.070
\$7.891
\$5.928
\$4.584

3. (TCO F) Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be: (Points : 5)
the same as the units completed.
less than the units completed.
the same as the units started during the period.
less than the units started during the period.

4. (TCO F) Which of the following accounts is debited when direct labor is recorded? (Points : 5)
Work in process
Salaries and wages expense
Salaries and wages payable

5. (TCO F) During December at Ingrim Corporation, \$74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled \$6,000. The journal entry to record the requisition from the storeroom would include a: (Points : 5)
debit to Raw Materials of \$74,000.
debit to Work in Process of \$68,000.
credit to Manufacturing Overhead of \$6,000.
debit to Work in Process of \$74,000.

6. (TCO F) Wedd Corporation had \$35,000 of raw materials on hand on May 1. During the month, the company purchased an additional \$68,000 of raw materials. During May, \$92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled \$5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total: (Points : 5)
\$92,000.
\$0.
\$68,000.
\$87,000.

(TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:

i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)

For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15)

TCO F) Job 728 was recently completed. The following data have been recorded on its job cost sheet:

Direct materials
\$81,000
Direct labor hours
1,220 labor hours
Direct labor wage rate
\$15 per labor-hour
Machine Hours
1,520 machine hours
Number of units completed
4,400 units

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is \$16 per machine-hour.

Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)

Direct materials \$81,000

Direct labor (\$15 per DLH, 1,220 DLHs) 18,300

Manufacturing Overhead (\$16 per MH, 1,520 MHs) 24,320

Total Cost \$123,620

Unit Product Cost 123620/4400=\$28.10

(TCO F) 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.

Units
Percentage complete with respect to conversion
Work in process, November 1
10,000
80%
Units started
28,000

Completed and transferred out
30,000

Work in process, November 30
8,000
30%

Costs for November
Materials
Conversion
Work in process, November 1
\$34,500
\$48,600
Added during the month
\$146,000
\$194,400

All materials are added at the beginning of the process.

Required: Compute the following items using the weighted-average method:

i. The equivalent units of production for materials.

ii. The cost per equivalent unit for conversion.

iii. The total cost assigned to units transferred out of the Curing Department during November.

iv. The cost assigned to work in process inventory as of November 30. (Points : 15)

(TCO F) Weisinger Corporation has provided the following data for the month of January:

Inventories

Beginning
Ending

Raw materials
\$28,000
\$29,000

Work In process
\$16,000
\$14,000

Finished goods
\$42,000
\$54,000

Raw material purchases
\$56,000

Direct labor costs
\$87,000

Manufacturing overhead cost incurred
\$51,000

Indirect materials included in manufacturing overhead costs incurred
\$3,000

Manufacturing overhead cost applied to work in process
\$55,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)

Weisinger Corporation

Schedule of Cost of Goods Manufactured
January XXX