3rd Exam Review

AGENA MARIE SAN PABLO, CPA

Easy Round
1 POINT EACH
1. The main difference between the FIFO and
weighted average methods of process costing is

a. in the treatment of beginning WIP

b. in the treatment of current period production costs
c. in the treatment of lost units
d. in the treatment of ending WIP
1. The main difference between the FIFO and
weighted average methods of process costing is

a. in the treatment of beginning WIP

b. in the treatment of current period production costs
c. in the treatment of lost units
d. in the treatment of ending WIP
2. The cost of normal discrete losses is

a. considered as expense
b. absorbed by all units in ending inventory
c. written off as a loss on an equivalent basis
d. absorbed by all units that passed the inspection
point on an equivalent basis.
2. The cost of normal discrete losses is

a. considered as expense
b. absorbed by all units in ending inventory
c. written off as a loss on an equivalent basis
d. absorbed by all units that passed the inspection
point on an equivalent basis.
3. When will weighted average costing method
produce the same cost goods manufactured as the
first in first out process costing method?
a. when materials are added 100% at the end of
process
b. when materials are added 100% at the beginning of
the process
c. when the beginning WIP and ending WIP are equal
d. when there is no beginning WIP
3. When will weighted average costing method
produce the same cost goods manufactured as the
first in first out process costing method?
a. when materials are added 100% at the end of
process
b. when materials are added 100% at the beginning of
the process
c. when the beginning WIP and ending WIP are equal
d. when there is no beginning WIP
4. A characteristic of a process costing system is that

a. Costs are accumulated by order

b. It is used by a company manufacturing custom
machinery
c. It requires a lot more detailed accounting than does
a job order costing
d. Work in process inventory is restated in term of
completed units.
4. A characteristic of a process costing system is that

a. Costs are accumulated by order

b. It is used by a company manufacturing custom
machinery
c. It requires a lot more detailed accounting than does
a job order costing
d. Work in process inventory is restated in term of
completed units.
5. Spoilage that should not arise under an efficient
operating condition is:

a. normal spoilage
b. abnormal spoilage
c. ordinary spoilage
d. extraordinary spoilage
5. Spoilage that should not arise under an efficient
operating condition is:

a. normal spoilage
b. abnormal spoilage
c. ordinary spoilage
d. extraordinary spoilage
Average Round
2 POINTS EACH
1. Brown Co. started 9,000 units in October. The
company transferred 7,000 finished units and ended
the period with 3,500 units that were 40% complete
as to both materials and conversion costs. What is the
beginning work in process inventory units?
a. 500
b. 600
c. 1,500
d. 2,000
1. Brown Co. started 9,000 units in October. The
company transferred 7,000 finished units and ended
the period with 3,500 units that were 40% complete
as to both materials and conversion costs. What is the
beginning work in process inventory units?
a. 500
b. 600
c. 1,500
d. 2,000
3. Expo Co. uses a FIFO process costing system and had
beginning work in process inventory of 5,000 units that
were 40% complete as to conversion. Expo started and
completed 42,000 units this period and had ending work in
process inventory of 12,000 units. How many units were
started this period?

a. 54,000
b. 59,000
c. 42,000
d. 47,000
3. Expo Co. uses a FIFO process costing system and had
beginning work in process inventory of 5,000 units that
were 40% complete as to conversion. Expo started and
completed 42,000 units this period and had ending work in
process inventory of 12,000 units. How many units were
started this period?

a. 54,000
b. 59,000
c. 42,000
d. 47,000
4. During August, Chris Angels’ incurred the ff. cost of Job 912 for 300 guitars.
Cost incurred for the 300 guitars:
Direct Materials P35,750
Direct Labor P40,550
Factory Overhead P48,660
20 units of guitars were found to be defective and Chris Angels’ had to incur
the ff. to remedy the defect:
Direct Materials P10,250
Direct Labor P11,650
FOH is based on direct labor cost. If the rework cost is normal but specific to
Job 912, the cost per finished unit is:
a. P536.13 c. P574.43
b. P489.53 d. P524.50
4. During August, Chris Angels’ incurred the ff. cost of Job 912 for 300 guitars.
Cost incurred for the 300 guitars:
Direct Materials P35,750
Direct Labor P40,550
Factory Overhead P48,660
20 units of guitars were found to be defective and Chris Angels’ had to incur
the ff. to remedy the defect:
Direct Materials P10,250
Direct Labor P11,650
FOH is based on direct labor cost. If the rework cost is normal but specific to
Job 912, the cost per finished unit is:
a. P536.13 c. P574.43
b. P489.53 d. P524.50
5. LMN Company Co. uses a FIFO process costing system. The
company had 5,000 units that were 60 percent complete as to
conversion costs at the beginning of the month. The company
started 22,000 units this period and had 7,000 units in ending Work
in Process Inventory that were 35 percent complete as to
conversion costs.
What is the equivalent units for materials, if materials are added at
the end of the process?

a. 18,000 c. 20,000
b. 22,000 d. 27,000
5. LMN Company Co. uses a FIFO process costing system. The
company had 5,000 units that were 60 percent complete as to
conversion costs at the beginning of the month. The company
started 22,000 units this period and had 7,000 units in ending Work
in Process Inventory that were 35 percent complete as to
conversion costs.
What is the equivalent units for materials, if materials are added at
the end of the process?

a. 18,000 c. 20,000
b. 22,000 d. 27,000
Difficult Round
4 POINTS EACH
1. Ablan Co. produces a special kind of insecticides. Materials are added in
the first stage of production which is the Mixing Department. For the month
of March, the following data were gathered:
Work in Process, March 1 (40% complete as to CC) 40,000 units
Started in process during the month 100,000 units
Transferred to Molding Department 85,000 units
Lost units in processing 10,000 units
Work in process, March 31 (60% complete as to CC) 45,000 units
The cost corresponding to the lost units were absorbed by the remaining
units. Using the weighted average method, the equivalent units for the
material cost were:
a. 112,000 c. 130,000
b. 140,000 d. Answer not given
1. Ablan Co. produces a special kind of insecticides. Materials are added in
the first stage of production which is the Mixing Department. For the month
of March, the following data were gathered:
Work in Process, March 1 (40% complete as to CC) 40,000 units
Started in process during the month 100,000 units
Transferred to Molding Department 85,000 units
Lost units in processing 10,000 units
Work in process, March 31 (60% complete as to CC) 45,000 units
The cost corresponding to the lost units were absorbed by the remaining
units. Using the weighted average method, the equivalent units for the
material cost were:
a. 112,000 c. 130,000
b. 140,000 d. Answer not given
2. Work in Process of the Cure Corporation on January 1, 2030, Job 501 has direct
materials of P227,500, direct labor costs of P136,500 and applied factory overhead of
P163,800. FOH is based on direct labor cost. During the month, direct materials were
requisitioned, and direct labor identified with orders as follows:

Job no. Direct Materials Direct Labor Total

501 - P169,000 P169,000
502 P253,500 P292,500 P546,000
503 P344,500 P305,500 P650,000
504 P305,500 P104,000 P409,500

Job 501, 502, and 503 were completed and sold in January. How much is the cost of goods
manufactured?
a. P2,813,200 c. P2,330,900
b. P2,819,700 d. P2,447,900
2. Work in Process of the Cure Corporation on January 1, 2030, Job 501 has direct
materials of P227,500, direct labor costs of P136,500 and applied factory overhead of
P163,800. FOH is based on direct labor cost. During the month, direct materials were
requisitioned, and direct labor identified with orders as follows:

Job no. Direct Materials Direct Labor Total

501 - P169,000 P169,000
502 P253,500 P292,500 P546,000
503 P344,500 P305,500 P650,000
504 P305,500 P104,000 P409,500

Job 501, 502, and 503 were completed and sold in January. How much is the cost of goods
manufactured?
a. P2,813,200 c. P2,330,900
b. P2,819,700 d. P2,447,900
3. KLM Company has the following information for February:
Units started 100,000 units Abnormal spoilage 5,000 units
BWIP (65% incomplete) 20,000 units EWIP (30% incomplete)14,500 units
Normal spoilage 3,500 units Transferred out 97,000 units

Beginning WIP Costs:

Material P15,000
Conversion P10,000

All materials are added at the start of the production process. KLM Company inspects
goods at 75% of the production process. Assume that the costs per EUP for materials and
conversion are P2.50 and P3.75, respectively. Using FIFO, what is the total cost assigned to
the transferred out units (rounded to nearest peso)?

a. P573,594 c. P555,000
b. P573,954 d. P548,594
3. KLM Company has the following information for February:
Units started 100,000 units Abnormal spoilage 5,000 units
BWIP (65% incomplete) 20,000 units EWIP (30% incomplete)14,500 units
Normal spoilage 3,500 units Transferred out 97,000 units

Beginning WIP Costs:

Material P15,000
Conversion P10,000

All materials are added at the start of the production process. KLM Company inspects
goods at 75% of the production process. Assume that the costs per EUP for materials and
conversion are P2.50 and P3.75, respectively. Using FIFO, what is the total cost assigned to
the transferred out units (rounded to nearest peso)?

a. P573,594 c. P555,000
b. P573,954 d. P548,594
4. Tams adds materials at the beginning of the process in Department FEU.
Conversion costs were 75% complete as to the 8,000 units in WIP at May 1 and 50%
complete as to the 6,000 units in WIP at May 31. During May, 12,000 units were
completed and transferred to the next department. An analysis of the cost relating
to WIP at May 1 and to production activity for May is as follows:

Cost
Materials Conversion
WIP, May 1 P9,600 P4,800
Cost added in May P15,600 P14,400

The total cost per EUP for May under FIFO and Average:
a. P2.68 and P2.68 c. P3.16 and P2.68
b. P3.16 and P3.16 d. P2.68 and P3.16
4. Tams adds materials at the beginning of the process in Department FEU.
Conversion costs were 75% complete as to the 8,000 units in WIP at May 1 and 50%
complete as to the 6,000 units in WIP at May 31. During May, 12,000 units were
completed and transferred to the next department. An analysis of the cost relating
to WIP at May 1 and to production activity for May is as follows:

Cost
Materials Conversion
WIP, May 1 P9,600 P4,800
Cost added in May P15,600 P14,400

The total cost per EUP for May under FIFO and Average:
a. P2.68 and P2.68 c. P3.16 and P2.68
b. P3.16 and P3.16 d. P2.68 and P3.16