Review Examination Questions Chapter 4
1. Assume there is no beginning work in process inventory and the ending work in process
inventory is 100% complete with respect to materials costs. The number of equivalent units with
respect to materials costs under the weighted-average method is:
A. the same as the number of units put into production.
B. less than the number of units put into production.
C. the same as the number of units completed.
D. less than the number of units completed.
2. 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:
A. the same as the units completed.
B. less than the units completed.
C. the same as the units started during the period.
D. less than the units started during the period.
3. Lucas Company uses the weighted-average method in its process costing system. The company
adds materials at the beginning of the process in the Forming Department, which is the first of
two stages in its production process. Information concerning operations in the Forming
Department in October follows:
What was the materials cost of work in process at October 31?
A. $3,060
B. $5,520
C. $6,000
D. $6,120
4. 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:
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.)
A. $8.070
B. $7.891
C. $5.928
D. $4.584
5. The Morgan Company uses the weighted-average method in its process costing system. For a
particular department, the company had 54,000 equivalent units with respect to conversion costs
in March. There were 7,500 units in the department's beginning work in process inventory, two
thirds complete with respect to conversion costs. During March, 52,500 units were started and
50,000 were completed and transferred out of the department. The ending work in process
inventory in the department:
A. consisted 5,000 of units.
B. consisted of 2,500 units.
C. was 65% complete with respect to conversion costs.
D. was 40% complete with respect to conversion costs.
6. Strap Company uses the weighted-average method in its process costing system. The company
has only one processing department. The ending work in process inventory consists of 10,000
units, 60% complete with respect to materials. The total dollar value of this inventory is $38,000.
The costs per equivalent unit are $5.00 for materials and $4.00 for conversion costs for the
period. With respect to conversion costs, the ending work in process inventory is:
A. 10% complete
B. 20% complete
C. 38% complete
D. 30% complete
Hanson Corporation uses the weighted-average method in its process costing system. Data
concerning the first processing department for the most recent month are listed below:
Note: Your answers may differ from those offered below due to rounding error. In all cases, select
the answer that is the closest to the answer you computed. To reduce rounding error, carry out all
computations to at least three decimal places.
7. What are the equivalent units for materials for the month in the first processing department?
A. 480
B. 6,700
C. 6,580
D. 6,100
8. What are the equivalent units for conversion costs for the month in the first processing
department?
A. 360
B. 6,700
C. 6,100
D. 6,460
9. The cost per equivalent unit for materials for the month in the first processing department is
closest to:
A. $20.52
B. $20.85
C. $20.15
D. $20.48
10. The cost per equivalent unit for conversion costs for the first department for the month is closest
to:
A. $46.81
B. $50.98
C. $48.55
D. $48.39
11. . The total cost transferred from the first processing department to the next processing department
during the month is closest to:
A. $447,600
B. $450,800
C. $423,316
D. $464,953
12. The cost of ending work in process inventory in the first processing department according to the
company's cost system is closest to:
A. $24,983
B. $33,310
C. $41,638
D. $27,484
Answer Key
1. A
2. D
3. D
4. B
5. D
6. B
7. C
8. D
9. B
10. C
11. C
12. D
3. Solution
4. Solution
5. Solution
6. Solution
Solve for unknowns
* $38,000 - $30,000 = $8,000
** $8,000 $4.00 = 2,000
10,000 units in ending inventory x percent complete = 2,000 equivalent units
2,000 10,000 = 20% complete
9. Solution
10. Solution
11. Solution