BUSINESS

$220,000; conversion costs were $414,000.

The cost of goods completed is:

$312,000.

$414,000.

$520,000.

$634,000.

some other amount

2. Kentucky Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?

Materials, 40%; conversion cost, 40%.
Materials, 40%; conversion cost, 100%.
Materials, 100%; conversion cost, 40%.
Materials, 100%; conversion cost, 60%.
Materials, 100%; conversion cost, 100%.

3. When calculating unit costs under the weighted-average process-costing method, the unit cost is based on:

only the current period’s manufacturing costs.
only costs in the period’s beginning work-in-process inventory.
a summation of the costs in the beginning work-in-process inventory plus costs incurred in the current period.
only costs incurred in previous accounting periods.
a summation of the costs in the beginning work-in-process inventory plus costs to be incurred in the upcoming period.

4. Hamilton, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hamilton should make a journal entry on December 31 that includes:

a debit to Cost of Goods Sold for $432,000.
a credit to Finished-Goods Inventory for $432,000.
a credit to Work-in-Process Inventory for $432,000.
a debit to Finished-Goods Inventory for $86,000.
a credit to Work-in-Process Inventory for $86,000.

5. In a process-costing system, manufacturing costs are accumulated by:

batch.
batch and time period.
department.
department and time period.
department or process, and time period.

6. Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 40,000 units during the month and had 10,000 units in process at month-end, 20% complete. Conversion costs associated with the beginning work-in-process inventory amounted to $231,000, and amounts that relate to the current month totaled $966,000. If conversion is incurred uniformly throughout manufacturing, Peach’s equivalent-unit cost is:

$23.00.
$23.94.
$24.15.
$28.50.
some other amount.

7. Process costing would likely be used in all of the following industries except:

petroleum refining.
chemicals.
truck tire manufacturing.
wood pulp production.
automobile repair.

8. Unit costs in a process-costing system are derived by using:

in-process units.
completed units.
physical units.
equivalent units.
a measure of activity other than those listed above.

9. Muhares, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company’s accounting records:

Total equivalent units of materials: 8,000

Total equivalent units of conversion: 7,400

Units started and completed during the period: 6,500

On the basis of this information, the ending work-in-process inventory’s stage of completion is:

80%.

70%.

60%.

40%.

some other percentage not listed above.

10. Cosby uses a weighted-average process-costing system. All materials are added at the beginning of the process; conversion costs are incurred evenly throughout production. The company finished 40,000 units during the period and had 15,000 units in progress at year-end, the latter at the 40% stage of completion. Total material costs amounted to $220,000; conversion costs were $414,000.

The cost of the ending work in process is:

$54,000.

$78,000.

$114,000.

$195,000.

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