Question : 16) The president of the Gulf Coast Refining Corporation wants : 1217025

 

16) The president of the Gulf Coast Refining Corporation wants to know why his golfing partner, who is the chief financial officer of a large construction company, calculates his costs by the job, but his own corporation calculates costs by large units rather than by individual barrel of oil.

 

17) Describe the differences between process costing and job costing. Discuss some typical products which would be more likely to use process costing as compared to some which would be more likely to use job costing.

 

Objective 17.2

 

1) In a process-costing system average unit costs are calculated

A) by dividing total costs in a given accounting period by total units produced in that period.

B) by multiplying total costs in a given accounting period by total units produced in that period.

C) by dividing total costs in a given accounting period by units started in that period.

D) by multiplying total costs in a given accounting period by units started in that period.

Objective 17.3

 

1) The purpose of the equivalent-unit computation is to:

A) convert completed units into the amount of partially completed output units that could be made with that quantity of input

B) assist the business in determining the cost assigned to ending inventory and work-in-process inventory.

C) convert partially completed units into the amount of completed output units that could be made with that quantity of input

D) Both B and C are correct.

 

2) In a process-costing system, the calculation of equivalent units is used for calculating:

A) the dollar amount of ending inventory

B) the dollar amount of the cost of goods sold for the accounting period

C) the dollar cost of a particular job

D) Both A and B are correct.

 

3) When a Bakery transfers goods from the Mixing Department to the Baking Department, the accounting entry is:

A) Work in Process ? Mixing Department

Work in Process ? Baking Department

B) Work in Process ? Baking Department

Accounts Payable

C) Work in Process ? Baking Department

Work in Process ? Mixing Department

D) Work in Process ? Mixing Department

Accounts Payable

Answer the following questions using the information below:

 

Dustin Plastics, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

 

Data for Department A for February 2012 are:

Work in process, beginning inventory, 40% converted200 units

Units started during February600 units

Work in process, ending inventory100 units

 

Costs for Department A for February 2012 are:

Work in process, beginning inventory:

Direct materials$200,000

Conversion costs$200,000

Direct materials costs added during February$2,000,000

Conversion costs added during February$2,500,000

 

4) What is the unit cost per equivalent unit of beginning inventory in Department A?

A) $2,000

B) $3,500

C) $7,000

D) $7,500

 

5) How many units were completed and transferred out of Department A during February?

A) 100 units

B) 600 units

C) 700 units

D) 800 units

6) Dustin Plastics, Inc., manufactures plastic moldings for car seats. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

 

Data for Department A for February 2012 are:

Work in process, beginning inventory, 40% converted200 units

Units started during February600 units

Work in process, ending inventory:100 units

30% complete as to conversion costs

100% complete as to materials

 

Costs for the Department A for February 2012 are:

Work in process, beginning inventory:

Direct materials$200,000

Conversion costs$200,000

Direct materials costs added during February$2,000,000

Conversion costs added during February$2,500,000

 

What were the equivalent units of direct materials and conversion costs, respectively, at the end of February? Assume Dustin Plastics, Inc., uses the weighted-average process costing method.

A) 800; 730

B) 800; 800

C) 800; 700

D) 600; 500

Answer the following questions using the information below:

 

Roosevelt Cabinetry, Inc., manufactures standard sized modular cabinet units for kitchens and other applications within the home. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through the rough cut department and the finish department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

 

Data for Finish Department for March 2012 are:

Work in process, beginning inventory, 25% converted1,000 units

Units started during February1,400 units

Work in process, ending inventory300 units

 

Costs for Finish department for March 2012 are:

Work in process, beginning inventory:

Direct materials$300,000

Conversion costs$200,000

Direct materials costs added during February$420,000

Conversion costs added during February$1,600,000

 

7) What is the unit cost per equivalent unit of the beginning inventory in the Finishing Department?

A) $800.00

B) $300.00

C) $1,100.00

D) $500.00

 

8) How many units were completed and transferred out of the Finishing Department during March?

A) 1,000 units

B) 1,400 units

C) 2,100 units

D) Unknown