(Test Bank) Management Accounting

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Test Bank

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Chapter 04 - Systems Design: Continuation Costing 4-1 Chapter 04 Systems Design: Cont inuation Costing Multiple Choice Questions 1. (Appendix 4A) Among which is named statements referring to a job done report is not correct? A. Following amount schedule deals what physical units, not whole units. B. Following total " Summing up to to be accounted for" must equal following total cost of following units completed and transferred out, plus following cost of following ending job done -in-continuation inventory. C. Following equivalent units in following ending job done -in-continuation inventory will be different if following weighted -average method is used than it will be if following FIFO method is used. D. Following total of following "Units to be accounted for" will equal following total of following "Units accounted for." Following admin : Understand Difficulty: Totally hard Following Objective: 2 Following Objective: 3 Following Objective: 4 Following Objective: 6 Following Objective: 7 Following Objective: 8 2. Assume that following re is no beginning job done -in-continuation inventory, and following ending job done -in-continuation inventory is 50% complete what respect to conversion summing up to . What would be following number of equivalent units of job done what respect to conversion summing up to under following weighted -average method? A. Following same as following units completed. B. Following same as following units started during following period. C. Less than following units completed. D. Less than following units started during following period. Following admin : Understand Difficulty: Totally hard Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-2 3. (Appendix 4A) All job done summing up to have been steadily rising in following Donner Organization for several periods, and following organization maintains large job done -in- continuation inventories. What is following Donner Organization 's cost per equivalent unit, as computed using following FIFO method? A. Following same as that computed under following weighted -average method. B. Higher than that computed under following weighted -average method. C. Lower than that computed under following weighted -average method. D. It could be following lower than, following same as, or higher than that computed under following weighted -average method. Following admin : Understand Difficulty: Totally hard Following Objective: 3 Following Objective: 7 4. (Appendix 4A) If a organization uses two different unit cost figures to cost transfers from one department to ano following r under a continuation costing system, following n among which is named statements is reasonable to assume? A. Following re was no beginning job done -in-continuation inventory. B. Continuation ing centres are arranged in a sequential pattern. C. Following FIFO cost method is being used. D. Following weighted -average cost method is being used. Following admin : Understand Difficulty: Medium Following Objective: 5 Following Objective: 8 5. For among which is named industries would it NOT be appropriate to use continuation costing? A. Custom furniture building. B. Oil refining. C. Grain milling. D. Newsprint job done . Following admin : Understand Difficulty: Easy Following Objective: 1 Chapter 04 - Systems Design: Continuation Costing 4-3 6. Among wh ich is named statements best defines an operation costing system? A. It is identical to a continuation costing system except that actual manufacturing overhead summing up to are traced to units of product. B. It is following same as a continuation costing system except that direct materials summing up to are accounted for in following same way as in job -order cost ing system. C. It is following same as a job -order costing system except that direct materials summing up to are accounted for in following same way as in a continuation costing system. D. It is identical to a job -order costing system except that actual manufacturing overhead summing up to are traced to units of product. Following admin : Understand Difficulty: Totally har d Following Objective: 1 Following Objective: 8 7. Lucas Organization uses following weighted -average method in its continuation costing system. Following organization adds materials at follow ing beginning of following continuation in following Forming Department, which is following first of two stages in its job done continuation . Information concerning operations in following Forming Department in October follows: What was following materials cost of job done in continuation on October 31? A. $3,060. B. $5,520. C. $6,000. D. $6,120. EI = 6,000 + 50,000 - 44,000 = 12,000 units * $28,560/56,000 = $6120. Following admin : Apply Difficulty: Totally hard Following Objective: 2 Following Objective: 3 Following Objective: 4 Following Objective: 5 Chapter 04 - Systems Design: Continuation Costing 4-4 8. David Organization uses following weighted -average method in its continuation costing system. Following first continuation ing department, following Welding Department, started following month what 20,000 units that were 80% complete what respect to conversion summing up to . Following conversion cost in this beginning job done -in-continuation inventory was $123,200. An additional 65,000 units were started into job done during following month. Following re were 19,000 units in following ending job done -in- continuation inventory of following Welding Department that were 10% complete what respect to conversion summing up to . A total of $389,250 in conversion summing up to were incurred in following department during following month. What would be following cost per equivalent unit for conversion summing up to for following month? (Round off to three decimal places.) A. $7.547. B. $7.700. C. $4.634. D. $5.988. EU = 66,000 + 19,000 *.1 = 67,900. Cost/EU = (132,200 + 389,250)/67,900 Following admin : Analyze Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-5 9. Larner Organization uses following weighted -average method in its continuation costing system. Operating data for following first continuation ing department for following month of June appear below: According to following organization 's records, following conversion cost in beginning job done -in- continuation inventory was $68,064 at following beginning of June. Additional conversion summing up to of $585,324 were incurred in following department during following month. What was following cost per equivalent unit for conversion summ ing up to for following month? (Round off to three decimal places.) A. $5.575. B. $6.174. C. $6.892. D. $7.090. ($68,064 + 585,324)/(91,000 + 19,000 * 20%) Following admin : Analyze Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-6 10. Glo Co., a manufacturer of combs, uses following weighted -average method in its continuation costing system. Following organization sold 125,000 units during following month of April. Following re is only one continuation ing department. Following following additional information is provided: What were following equivalent units of job done for conversion summing up to for April? A. 126,500. B. 125,500. C. 123,500. D. 117,500. Transferred out of WIP to FG = 125,000 + 30,000 - 37,500 = 117,500 (from FG information). EU = 117,500 * 100% + 8,000 *.75 = 123,500 Following admin : Analyze Difficulty: Totally hard Following Objective: 1 Following Objective: 2 Following Objective: 5 Chapter 04 - Systems Design: Continuation Costing 4-7 11. Following Morgan Organization uses followin g weighted -average method in its continuation costing system. For a particular department, following organization had 54,000 equivalent units of job done what respect to conversion summing up to in March. Following re were 7,500 units in following departm ent's beginning job done -in-continuation inventory, two -thirds complete what respect to conversion summing up to . During March, 52,500 units were started and 50,000 were completed and transferred out of following department. What was following ending job done -in-continuation inventory in following department? A. Consisted of 5,000 units. B. Consisted of 2,500 units. C. 65% complete what respect to conversion summing up to . D. 40% complete what respect to conversion summing up to . 7,500 + 52,500 = 60,000 less 50,000 transferred out = EI of 10,000 units. EI equiv. units = 54,000 - 50,000 = 4,000 EU following refore 4/10 = 40% complete. Following admin : Analyze Difficulty: Totally hard Following Objective: 2 12. Following following data were taken from following accounting records of following Hazel Corporation, which uses following weighted -average method in its continuation costing system: What were following equivalent units of job done for conversion summing up to ? A. 102,000 units. B. 112,000 units. C. 111,000 units. D. 100,000 units. T. out = 30,000 + 90,000 - 20,000 = 100,000 * 100% + 20,000 *60% = 112,000 Following admin : Apply Difficulty: Medium Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-8 13. Baker Organization uses following weighted -average method in its continuation costing system. Following Assembly Department started following month what 8,000 units in its beginning job done -in- continuation inventory that were 90% complete what respect to conversion summing up to . An additional 95,000 units were transferred in from following prior department during following month to begin continuation ing in following Assembly Department. Following re were 11,000 units in following ending job done -in-continuation inventory of following Assembly Department that were 90% complete what respect to conversion summing up to . What were following equivalent units of job done for conversion summing up to in following Assembly Department for following month? A. 94,700 units. B. 101,900 units. C. 98,000 units. D. 92,000 units. 92,000 + 11,000 *.9 = 101,900 Following admin : Apply Difficulty: Medium Following Objective: 2 14. Jawson Organization uses following weighted -average method in its continuation costing system. Operating data for following Painting Department for following month of April appear below: What were following equivalent units of job done for conversion summing up to in following Painting Department for April? A. 67,300 units. B. 68,820 units. C. 70,520 units. D. 63,900 units. (6,300 + 65,600 - 4,600) * 100% + 4,600 * 70% Following admin : Apply Difficulty: Medium Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-9 15. Sarver Organization uses following weighted -average method in its continuation costing system. Following Fitting Department is following second department in its job done continuation . Following data below summarize following department's operations in March: Following Fitting Department's job done report indicates that following cost per equivalent unit for conversion cost for March was $8.24. How much conversion cost was assigned to following units transferred out of following Fitting Department during March? A. $482,287.20. B. $502,640.00. C. $523,240.00. D. $561,144.00. (7,100 + 61,000 - 4,600) * $8.24 Following admin : Apply Difficulty: Medium Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-10 16. Following Nichols Organization uses following weighted -average method in its continuation costing system. Following organization recorded 29,500 equivalent units of job done for conversion summing up to for November in a particular department. Following re were 6,000 units in following ending job done -in-continuation inventory on November 30, 75% complete what respect to conversion summing up to . Following November 1 job done -in-continuation inventory consisted of 8,000 units, 50% complete what respect to conversion summing up to . A total of 25,000 units were completed and transferred out of following department during following month. What was following number of units started during November in following department? A. 24,500 units. B. 23,000 units. C. 27,000 units. D. 21,000 units. 25,000 + 6,000 - 8,000 = 23,000 started. Following admin : Apply Difficulty: Medium Following Objective: 1 Following Objective: 2 17. Following Assembly Department started following month what 35,000 units in its beginning job done -in-continuation inventory. Additional units 472,000 we re transferred in from following prior department during following month to begin continuation ing in following Assembly Department. Followin g re were 34,000 units in following ending job done -in-continuation inventory of following Assembly Department. How many units were transferred to following next continuation ing department during following month? A. 507,000 units. B. 473,000 units. C. 471,000 units. D. 541,000 units. 35,000 + 472,000 - 34,000 Following admin : Apply Difficulty: Easy Following Objective: 1 Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-11 18. Huffer Organization uses following weighted -average method in its continuation costing system. Following following information pertains to Continuation ing Department D for following month of May: All materials are added at following beginning of following continuation . Among which is named summing up to is closest to following cost per equivalent unit for materials? A. $0.43. B. $0.45. C. $0.55. D. $0.59. ($11,000 + 36,000)/(85,000 + 25,000) Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-12 19. Harker Organization uses following weighted -average method in its continuation costing system. Following first continuation ing department, following Welding Department, started following month what 16,000 units in its beginning job done -in-continuation inventory that were 40% complete what respect to conversion summing up to . Following conversion cost in this beginning job done -in-continuation inventory was $29,440. An additional 59,000 units were started into job done during following month, and 61,000 units were completed in following Welding Department and transferred to following next continuation ing departme nt. Following re were 14,000 units in following ending job done -in-continuation inventory of following Welding Department that were 10% complete what respect to conversion summing up to . A total of $246,400 in conversion summing up to were incurred in following department during following month. What would be following cost per equivalent unit for conversion summing up to for following month? (Round off to three decimal places.) A. $4.176. B. $4.600. C. $3.375. D. $4.421. EI = 16,000 + 59,000 - 61,000 = 14,000 units. Cost/EU = ($29,440 + 246,400)/(61,000 + 14,000 *.1) = $4.4205 Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-13 20. Paxton Organization uses following weighted -average method in its continuation costing system. Following Moulding Department is following second department in its job done continuation . Following data below summarize following department's operations in January: Following accounting records indicate that following conversion cost that had been assigned to beginning job done -in-continuation inventory was $10,973, and a total of $268,107 in conversion summing up to were incurred in following department during January. What was following cost per equivalent unit for conversion summing up to for Janua ry in following Moulding Department? (Round off to three decimal places.) A. $5.348. B. $4.038. C. $5.080. D. $4.704. ($10,973 + 268,107)/(50,300 + 9,400*.2) Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-14 21. Following Richmond Organization uses following weighted -average method in its continua tion costing system. Following organization has only a single continuation ing department. Following organization 's ending job done -in-continuation inventory on August 31 consiste d of 18,000 units. Following units in following ending job done - in-continuation inventory were 100% complete what respect to materials and 60% complete what respect to labour and overhead. If following cost per equivalent unit for August was $2.75 for materials and $4.25 for labour and overhead, what was following total cost assigned to following ending job done -in-continuation inventory? A. $126,000. B. $75,600. C. $80,100. D. $95,400. 18,000*$2.75 + 18,000*.6*$4.25 = $95,400 Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 4 22. (Appendix 4A) On November 1, Yankee Organization had 20,000 units of job done in continuation in Department No. 1 that were 100% complete what respect to material summing up to and 20% complete what respect to conversion summing up to . During November, 160,000 units were started in Department No. 1, and 170,000 units were completed and transferred to Department No. 2. Following job done in continuation on November 30 was 100% co mplete what respect to material summing up to and 40% complete what respect to conversion summing up to . By what amount would following equivalent units of job done for conversion summing up to for following month of November differ if following FIFO method were used instead of following weighted -average method? A. 20,000 decrease. B. 16,000 decrease. C. 8,000 decrease. D. 4,000 decrease. Transferred out 170,000 units, EI = 10,000 units. W. Avg.: EU = 170,000 + 10,000*.4 = 174,000 EU FIFO: 20,000 *.8 + 150,000 * 1 + 10,000 *.4 = 170,000 EU. Following refore 4,000 less using FIFO. Following admin : Apply Difficulty: Totally hard Following Objective: 2 Following Objective: 7 Chapter 04 - Systems Design: Continuation Costing 4-15 23. Fabian Organization uses following weighted -average method in its continuation costing system. Following Assembly Department started following month what 9,000 units in its beginning job done -in- continuation inventory that were 70% complete what respect to conversion summing up to . During following month, an additional 90,000 units were transferred in from following prior department to begin continuation ing in following Assembly Department. During following month, 87,000 units were completed in follow ing Assembly Department and transferred to following next continuation ing department. Following re were 12,000 units in following ending job done -in-continuation inventory of following Assembly Department that were 20% complete what respect to conversion summing up to . What were following equivalent units of job done for conversion summing up to in following Assembly Department for following month? A. 93,000 units. B. 83,100 units. C. 87,000 units. D. 89,400 units. 87,000 + 12,000 *.20 = 894,300 Following admin : Apply Difficulty: Easy Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-16 24. Narver Organization uses following weighted -average method in its continuation costing system. Operating data for following Lubricating Department for following month of October appear below: What were following equivalent units of job done for conversion summing up to in following Lubricating Departm ent for October? A. 43,100 units. B. 37,100 units. C. 44,780 units. D. 47,780 units. 37,100 + 9,600 *.80 Following admin : Apply Difficulty: Easy Following Objective: 2 Chapter 04 - Systems Design: Continuation Costing 4-17 25. Black Organization uses following weighted -average method in its continuation costing system. Following organization 's ending job done -in-continuation inventory consists of 5,000 units, 80% complete what respect to materials and 50% complete what respect to labour and overhead. If following total dollar value of following inventory is $60,000 and following cost per equivalent unit for labour and overhead is $8.00, what is following cost per equivalent unit for materials? A. $5.00. B. $10.00. C. $8.00. D. $4.00. Value for Labour and Overhead in Inventory = 5,000 *.5 * $8 = $20,000 Material cost in inventory = $60,000 - 20,000 = $40,000 Material Cost/EU = $40,000/(5,000 *.8) = $10 Following admin : Analyze Difficulty: Totally hard Following Objective: 2 Following Objective: 3 Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-18 26. Department 2 is following second of three sequential continuation es. All materials are added at following beginning of continuation ing in Department 2. During October, Department 2 reported following following data: Following organization uses following weighted -average method in its continuation costing system. To following nearest cent, what is following cost per equivalent unit on following job done repor t for conversion summing up to ? A. $5.51. B. $6.45. C. $6.30. D. $7.38. (54,000 + 315,000)/(50,000 + 36,000*.2) Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 3 Chapter 04 - Systems Design: Continuation Costing 4-19 27. Overland, Inc., uses following weighted -average method in its continuation costing system. Following organization 's job done -in-continuation inventory on April 30 consists of 25,000 units. Following units in following ending inventory are 100% complete what respect to materials and 75% complete what respect to conversion summing up to . If following cost per equivalent unit is $3.00 for materials and $5.50 for conversion summing up to , what is following total cost in following April 30 job done -in-continuation inventory? A. $212,500. B. $178,125. C. $159,375. D. $109,375. 25,000 * $3 + 25,000 *.75 * $5.50 Following admin : Apply Difficulty: Medium Following Objective: 2 Following Objective: 4 28. Valley Manufacturing Organization 's beginning job done -in- continuation inventory consisted of 10,000 units, 100% complete what respect to materials cost and 40% complete what respect to conversion summing up to . Following total cost in following beginning inventory was $30,000. During following month, 50,000 units were transferred out. Followin g equivalent unit cost was computed to be $2.00 for materials and $3.70 for conversion summing up to under following weighted - average method. Given this information, what was following total cost of following units completed and transferred out? A. $255,000. B. $270,000. C. $240,000. D. $285,000. 50,000 * ($2 + $3.70) Following admin : Apply Difficulty: Easy Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-20 29. Ogden Organization uses following weighted -average method in its continuation costing system. Information for following month of January concerning Department A, following first stage of following organization 's job done continuation , follows: Materials are added at following beginning of following continuation . Following ending job done in continuation is 50% complete what respect to conversion summing up to . What cost would be recorded for following ending job done -in-continuation inventory? A. $6,800. B. $8,800. C. $3,400. D. $4,400. 10,000 * $0.48 + 10,000 *.5 * $0.40 Following admin : Apply Difficulty: Medium Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-21 30. Trapp Organization uses following weighted -average method in its continuation costing system. Following beginning job done -in-continuation inventory in its Painting Department consisted of 3,000 units that were 70% complete what respect to materials and 60% complete what respect to conversion summing up to . Following cost of following beginning job done -in-continuation inventory in following department was recorded as $10,000. During following period, 9,000 units were completed and transferred on to following next department. Following summing up to per equivalent unit for following period were $2.00 for mater ial and $3.00 for conversion summing up to . What was following cost of units transferred out during following month? A. $39,600. B. $45,000. C. $45,400. D. $35,400. 9,000 * ($2 + $3) Following admin : Apply Difficulty: Easy Following Objective: 4 31. Strap Orga nization uses following weighted -average method in its continuation costing system. Following organization has only one continuation ing department. Following ending job done -in-continuation inventory consists of 10,000 units, 60% complete what respect to materials. Following total dollar value of this inventory is $38,000. Following summing u p to per equivalent unit are $5.00 for materials and $4.00 for conversion summing up to for following period. What respect to conversion summing up to , what is following ending job done -in- continuation inventory? A. 10% complete. B. 20% complete. C. 38% complete. D. 30% complete. EI cost of material; 10,000 *.6 * $5 = $30,000 (38,000 - 30,000)/$4/EU = 2,000 EU for conversion summing up to following refore 2/10 = 20% complete. Following admin: Analyze Difficulty: Totally hard Following Objective: 2 Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-22 32. Rariton Organization uses following weighted -average method in its continuation costing system. Following Moulding Department is following second department in its job done continuation . Following data below summarize following department's operations in January: Following Moulding Department's job done report indicates that following cost per equivalent unit for conversion cost for January was $5.37. How much conversion cost was assigned to following ending job done - in-continuation inventory in following Moulding Department for January? A. $4,081.20. B. $10,203.00. C. $10,310.40 . D. $6,121.80. 1,900 *.4 * $5.37 Following admin : Apply Difficulty: Easy Following Objective: 2 Following Objective: 4 Chapter 04 - Systems Design: Continuation Costing 4-23 33. (Appendix 4A) Ebis Organization uses following FIFO method in its continuation costing system. Following first continuation ing department, following Welding Department, started following month what 13,000 units in its beginning job done -in-continuation inventory; 10% of following units were complete what respect to conversion summing up to . Following conversion cost in this beginning job done -in-continuation inventory was $12,610. An additional 89,000 units were started into job done during following month. Following re were 22,000 units in following ending job done -in-continuation inventory of following Welding Department; 30% of following se units were complete what respect to conversion summing up to . A total of $806,085 in conversion summing up to were incurred in following department during following month. What would be following cost per equivalent unit for conversion summing up to for following month on following department's job done report? (Round off to three decimal places.) A. $8.026. B. $9.700. C. $9.057. D. $9.450. Transferred out = 13,000 + 89,000 - 22,000 = 80,000 units of which 13,000 are from beginning inventory. $806,085/(13,000*.9 + 67,000*1 + 22,000*.3) = $9.45 Following admin : Apply Difficulty: Totally hard Following Objective: 6 Following Objective: 7