Chaper 4 Process Costing

Question 1

When the weighted-average method of process costing is used, a department’s equivalent units are computed by:

subtracting the equivalent units in beginning inventory from the equivalent units in ending inventory.

subtracting the equivalent units in beginning inventory from the equivalent units for work performed during the period.

adding the units transferred out to the equivalent units in ending inventory.

subtracting the equivalent units in beginning inventory from the sum of the units transferred out and the equivalent units in ending inventory.

Answer 1

adding the units transferred out to the equivalent units in ending inventory.

Question 2

The Assembly Department started the month with 35,000 units in its beginning work in process inventory. An additional 472,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 34,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?

507,000
473,000
471,000
541,000

Answer 2

473,000

Units completed and transferred out = Units in beginning work in process inventory + Units started into production or transferred in - Units in ending work in process inventory
Units completed and transferred out = 35,000 + 472,000 - 34,000 = 473,000

Question 3

Fabian Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 90,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 87,000 units were completed in the Assembly Department and transferred to the next processing department. There were 12,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?

93,000
83,100
87,000
89,400

Answer 3

89,400

87,000 units transferred to the next department + (12,000units in the ending work in process inventory x 20%) = 89,400