Name:____________________________________________________ Schedule: _______________

Instruction. All solutions will be in yellow paper. NO SOLUTION, NO CREDIT. If the question is
multiple choice, write only the letter of your choice. If it is open-ended, write your answer. NO
ERASURES ON YOUR FINAL ANSWERS.

1. ________ 6. ________ 11. ___________ 16. ___________ 21. ___________

2. ________ 7. ________ 12. ___________ 17. ___________ 22. ___________
3. ________ 8. ________ 13. ___________ 18. ___________ 23. ___________
4. ________ 9. ________ 14. ___________ 19. ___________ 24. ___________
5. ________ 10. ________ 15. ___________ 20. ___________ 25. ___________

THEORY (NX3)

Questions 1 through 4 are related to the following list of nine concepts:

1. EUP to complete Beginning WIP

2. EUP from last period in Beginning WIP
3. Units Transferred In
4. Total units transferred out
5. Units transferred out that were started and completed this period
6. Units transferred out that were started last period and completed this period
7. EUP to complete Ending Work in Process
8. EUP completed in Ending Work in Process
9. Total Units in Beginning Work in Process

1. What is the correct formula for weighted average EUP?

a. 1+2+3+7 b. 2+4+8 c. 1+2+3+7 d. 4+5+6+8

2. What is another correct formula for weighted average EUP?

a. 8+6+5 b. 8+4+2+1 c. 8+7+4+2 d. 8+6+5+2

3. What is the correct formula for FIFO EUP?

a. 1+3+7 b. 1+2+3+8 c. 1+4+7 d. 9+5+6

4. What is another correct formula for FIFO EUP?

a. 8+4 b. 8+4+2 c. 8+7+6+5 d. 7+4+2+1

5. Assuming no beginning WIP inventory, and that the ending WIP is 100% complete as to materials
cost, the number of equivalent units as to material cost is:
a. The same as the units placed in process
b. The same as the units completed
c. Less than the units placed in process
d. Less than the units completed

6. The units transferred in from the first department to the second department should be included in
the computation of the equivalent units for the second department under which of the following
methods of process costing?
a. FIFO – Yes, Weighted Average – Yes
b. FIFO – Yes, Weighted Average – No
c. FIFO – No, Weighted Average – Yes
d. FIFO – No, Weighted Average – No

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7. Equivalent units of production are used in process accounting to
a. Measure the efficiency of the production process
b. Establish standard costs
c. Provide a means of allocating cost to partially completed units
d. Allocate overhead to production

8. If the company uses two different unit cost figures to cost transfers from one department to
another under a process costing system, then it is reasonable to assume that:
a. The weighted cost method is being used.
b. The FIFO cost method is being used.
c. Processing centers are arranged in a sequential pattern.
d. There was no beginning work in process.

9. A cost transferred from a prior process to a subsequent process is referred to as

a. Cost added in
b. Transferred in costs
c. Beginning work in process
d. Work in process transfer

10. The weighted average method is thought by some accountants to be inferior to the FIFO method
because it:
a. Is more difficult to apply
b. Commingles cost of two periods
c. Only considers the last units worked on
d. Ignores work performed in subsequent periods

PROBLEMS (NX4)

11. SAYON PA NI Company had 6,000 units in work in process at July 1, 2011, which were 60% complete
as to conversion cost. During July, 20,000 units were completed. At July 31, 8,000 units remained in
work in process, which were 40% complete as to conversion cost. Direct materials are added at the
beginning of the process. How many units were started during July?
a. 18,000 b. 19,600 c. 20,000 d. 22,000

12. IPANABI SA CLOUDS INC. produces 980,000 complete units of products and 35,000 incomplete units
(50% complete). Direct materials which are added at the beginning of the process, cost P1,522,500
and conversion costs applied uniformly were P498,750. There were no beginning inventories. The
total cost absorbed by the 980,000 complete units must be:
a. P1,960,000 b. P1,470,000 c. P2,021,250 d. P1,985,788

13. IMBA Company has a process cost system. All materials are introduced at the beginning of the
process in Department One. The following information is available for the month of January:

WIP, 1/1 1,750 units

Started in January 7,000
Transferred to Department 2 7,350
WIP, 1/31 (25% complete as to conversion) 1,400
What are the equivalent unit of production for the month of January?
FIFO Average
Materials Conversion Materials Conversion
a. 7,000 7,700 7,000 7,700
b. 7,000 7,000 8,750 7,700
c. 8,750 7,000 7,000 7,000
d. 8,750 6,650 8,750 6,650

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14. IMBA Products Company produces Banana fruit drink. The units and equivalent (in liters), as well as
unit costs, for the Mix Department are as follows:

Materials Conversion
Equivalent units in beginning work in process 21,000 4,200
Units started and completed 140,000 140,000
Equivalent units in ending work in process 10,500 6,300
Unit Cost P6.50 P10.50

Assuming the company uses the FIFO method. If the beginning work in process inventory was valued
at P441,000, what would be the cost of goods completed and transferred?
a. P3,001,600 b. P2,254,000 c. P3,136,000 d. P2,695,000

15. Assuming the company uses the Weighted average method. If the beginning work in process
inventory was valued at P441,000, what would be the cost of ending inventory?
a. P180,600 b. P134,400 c. P66,150 d. P68,250

16. The LMFAO Corporation manufactures only one product in which the raw materials must go through
Process N, M, L in that order before completion.

Inventories of Process L and of Finished Goods on October 1 were as follows:

Process L – 1,200 units, 2/3 completed, P4,200
Finished goods – 1,000 units at P3.00 per unit
During October the following transactions were completed:
2,000 units with a value of P5,000 were transferred from Process M.
Direct labor applied to Process L during October was P3,100.
Overhead costs for October applied to Process L were P3,200.
Inventories on October 31 are as follow:
Process L – 600 units, ½ completed
Finished Goods – 1,300 units

Using FIFO method, the value of Process L inventory in process for October 31 is:

a. P2,400
b. P5,400
c. P3,500
d. P4,200
e. None of the above

17. 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 set of percentages would be used to calculate the
correct number of equivalent units in the ending work in process inventory?
a. Materials – 40%; Conversion Cost – 40%
b. Materials – 0%; Conversion Cost – 60%
c. Materials – 100%; Conversion Cost – 40%
d. Materials – 40%; Conversion Cost – 100%

18. Alberta Instrument Company uses a process costing system. A unit of product passes through three
departments – molding, assembly and finishing before it is completed. The following activity took
place in the Department during May: WIP, May 1 – 1,400 units; Units transferred in from Assembly
Department – 14,000 units; Units transferred out to finished goods inventory – 11,900 units.

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 Raw material is added at the beginning of processing in the Finishing Department. The work in
process inventory was 70% complete as to conversion on May 1 and 40% complete as to conversion
on May 31. Alberta Instrument Company uses the weighted-average method of process costing. The
cost per EUP is as follows: transferred in – P5.00; Raw materials – P1.00; Conversion Costs – P3.00.
Calculate the cost of units transferred to finished goods inventory during May and the cost of
Finishing Department’s work in process inventory on May 31.
a. FG – P107,100; WIP – P25,200
b. FG – P107,100; WIP – P6,300
c. FG – P126,000; WIP – P6,300
d. FG – P126,000; WIP – P25,200

19. In July, one of the processing department at Heinz Corporation had beginning work in process
inventory of P23,000 and ending work in process inventory of P16,000. During the month, P268,000
of costs were added to production and the cost of units transferred out from the department was
P275,000. In the department’s cost reconciliation report for July, the total cos to be accounted for
would be:

20. The Assembly Department started the month with 59,000 units in the beginning work in process
inventory. An additional 274,000 units were transferred in from the prior department during the
month to begin processing in the Assembly Department. There were 21,000 unit in the ending work
in process inventory of Assembly Department. How many units were transferred to the next
processing department during the month?

21. Star Company uses the weighted average method in its process costing system. The company has
only one processing department. The ending work in process inventory consists of 10,000 units, 60%
complete with respect to materials. The total peso value of this inventory is P38,000. The costs per
equivalent unit are P5.00 for materials and P4.00 for conversion costs for the period. With respect
to conversion cost, the ending work in process percentage of completion is?

For numbers 22 to 25:

GRABE SI SIR Company production reports of the five consecutive departments for the month of July.
The company uses FIFO method.

Dept. A Dept. B Dept. C Dept. D Dept. E

In process, Beg. 9,000 8,000 7,000 6,000 5,000
Stage of Completion 1/6 2/6 3/6 4/6 5/6
Placed in Process 51,000
In Process, End 8,000 9,000 8,000 7,000 6,000
Stage of Completion 5/6 3/5 2/3 3/4 ½

Materials in the department are added as follows:

Dept A – 30% at the start of process, 30% when 1/5 completed and 40% when 5/6 completed
Dept B – 25% when 3/8 completed; 35% when 3/7 completed; and the remainder at the end of the
process
Dept C – 25% when 3/5 completed; 50% when 5/8 completed; and 25% when ¾ completed
Dept D – 20% when ¾ completed; 30% when 7/9 completed; and 50% when 8/9 completed
Dept E – 50% when 3/7 completed; 30% when 5/7 completed; and 20% when 6/7 completed

22. The EUP for Materials in Department A is?

23. The EUP for Materials in Department B is?
24. The EUP for Materials in Department C is?
25. The EUP for Materials in Department D is?