Question

1) The Molding Department of Truong Company has the following - production data: beginning (Bl) inventory 25000 units (60% complete) started into (IN) production 425,000 units, completed and transferred Out 400,000 units, and ending (EI) inventory 50,000 units ( 40% complete). Assuming materials are entered at the beginning of the process, equivalent units (EU's) for materials are:

A) 450,000 equivalent units

B) 375,000 equivalent units

C) 400,000 equivalent units

D) 475,000 equivalent units

2). The Molding Department of Truong Company has the following production data: beginning (BI) inventory 30,000 units (60% complete), started into (IN) production 510,000 units, completed and transferred (OUT) 480,000 units, and ending inventory (EI) 60,000 units ( 40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units (EU's) for conversion costs are:

A) 540,000 equivalent units

B) 570,000 equivalent units

C) 504,000 equivalent units

D) 450,000 equivalent units

3). In the Shaping Department of Truong Company the unit materials cost is $5.00 and the unit conversions cost is $3.00. They transferred (OUT) 12,000 units and had 1,500 units in ending inventory (EI) 20% complete with respect to conversion. If all materials are added at the beginning of the process, the total cost to be assigned to the ending inventory (EI) is

A) $2,400.

B) $7,500.

C) $8,400.

D) $12,000.

4). In the Shaping Department of Most Honored and Creative Company the unit materials cost is $2.50 and the unit conversion cost is $1.50. The department transferred (OUT) 8,000 units and had 1,000 units in ending inventory (EI) 20% complete with respect to conversion. If all materials are added at the beginning of the process, the total cost to be assigned to the ending inventory (EI) is

A) $800.

B) $2,500.

C) $2,800.

D) $4,000.

5). Truong Company's Assembly Department has materials cost at-$3 per unit and conversion cost at-$6 per unit. There are 15,000-units in ending inventory, all of which are 70% complete as to conversion costs. How much are total costs to be assigned to ending inventory (EI) ?

A) $63,000.

B) $108,000.

C) $94,500.

D) $135,000.

6). The Anfa Company's Assembly Department has materials cost at $4 per unit and conversion cost at $8 per unit. There are 15,000 units in ending (EI) inventory, all of which are 70% complete as to conversion costs. How much are total costs to be assigned to ending inventory (EI) ?

A) $84,400.

B) $144,000.

C) $126,600.

D) $180,000.

7). At the high level of activity in November, 7,000 machine hours were run and power costs were $18,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $9,000. Using the high-low method, the estimated fixed cost (F /C) element of power costs is

A) $18,000.

B) $9,000.

C) $5,400.

D) $12,600.

8). One of Anfa Company's activity cost pools is inspecting, with estimated overhead (OH) of $100,000. It produces throw rugs (700 inspections) and area 'rugs (1,300 inspections). How much $$ OH should be assigned to throw rugs inspections?

A) $35,000.

B) $50,000.

C) $53,846.

D) $100,000.

9). For its inspecting cost pool, Brilliant Company estimated overhead of $200,000 and estimated 4,000 inspections. The actual overhead cost was $240,000 for 5,000 actual inspections. The activity-based overhead rate (ABOR) used to assign the costs of the inspecting cost pool to products is

A) $40 per inspection.

B) $48 per inspection.

C) $50 per inspection.

D) $60 per inspection.

10). The Mullen Company's activity for the first three months of 2011 are as follows:

Machine Hours Electrical Cost

January 2,100 $4,800

February 2,600 $5,800

March 2,900 $6,400

Using the high-low method, how much is the variable cost (VIC) per machine hour?

A) $2.00

B) $3.00

C) $2.26

D) $1.78

Answer 1

Solution:

Problem 1 --- Equivalent units (EU's) for materials

It is assumed that company is following weighted average method in process costing.

Under this method, the units are treated as freshly introduced irrespective of previous percentage completion.

It is given in the question that materials are entered in the beginning of the process, it means the materials are 100% complete at the end of the process period.

Hence, the Equivalent Units for Materials = Completed Units during the period x Completion Percentage + Ending Inventory balance units x Percentage completion of ending inventory

= (400,000 Units Completed and transferred out x 100% complete) + (Ending Inventory Units 50,000 x 100% Completed with respect to material since materials are entered in the beginning of process)

= 400,000 + 50,000

= 450,000 Units

Hence, the correct option is A) 450,000 Equivalent Units

Problem 2 ---

It is assumed that company is following weighted average method in process costing.

Under this method, the units are treated as freshly introduced irrespective of previous percentage completion.

It is given in the question that materials are entered in the beginning of the process, it means the materials are 100% complete at the end of the process period.

Hence, the Equivalent Units for Conversion = Completed Units during the period x Completion Percentage + Ending Inventory balance units x Percentage completion of ending inventory

= (480,000 Units Completed and transferred out x 100% complete) + (Ending Inventory Units 60,000 x 40% Completed with respect to conversion since materials are entered in the beginning of process and 100% complete in all respect)

= 480,000 + 24,000

= 504,000 Units

Hence, the correct option is C) 504,000 Equivalent Units

Problem 3 ---

Total Cost assigned to Ending Inventory

Cost of ending goods in process	Equivalent Units	Unit Cost	Total Cost Assigned
Direct materials	1500	$5.00	$7,500
Conversion Costs	300 (1,500 Units x 20% Complete with respect to conversion)	$3.00	$900
Total cost of ending goods in process			$8,400

The correct option is C) $8,400

Problem 4 ---

Total Cost assigned to Ending Inventory

Cost of ending goods in process	Equivalent Units	Unit Cost	Total Cost Assigned
Direct materials	1000	$2.50	$2,500
Conversion Costs	200 (1,000 Units x 20% Complete with respect to conversion)	$1.50	$300
Total cost of ending goods in process			$2,800

The correct option is C) $2,800

Pls ask separate question for remaining parts