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Lanen 3e: Chapter 8 Process Costing Practice Quiz

he Clarke Chemical Company produces a special · f body oil that is widely used by professional
orts trainers. The oil is produced in three processes. Refinin Blend in an · · . Raw oil materials
are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the
blending process when processing is 50% completed.
The following Work-in-Process account for the Refining Department is available for the month of July. The
July 1 Work-in-Process Inventory contains $1 ,500 in material costs.

Work-in-Process Refinincr
Beginning balance(),
Materials (30,000 gal. )
gal, 80% complete) ~
12,300
Direct labor 14,500
Overhead 2L750
Ending balance (6,000 gal. , 2/3 complete)

The Clarke Chemical Company uses~--- -----------

wei hted-average costin .
Required (use 4 decimal places for compu at1ons :
(a) Compute the equivalent units of production for Refining for July.
(b) Compute the material cost per unit and the conversion cost per unit for July.
(c) Compute the costs transferred to the Blending Department for July.
(d) Compute the July 31 Work-in-Process Inventory balance.

7
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(a) Mat EUP: 35,000; Conv EUP: 33,000
(b) Mat: $0.3943; Conv: $1.25
(c) $47,685
(d) $7,366

Feedback: transferred out: 5,000 + 30,000- 6,000 =29,000

(a) Mat EUP = (100% x 29,000) + (100% x 6,000) = 35,000
Conv EUP: (100% x 29,000) + (2/3 x 6,000) = 33,000
(b) Mat: ($1 ,500 + 12,300)/35,000 =$0.3943; Conv: [($6,500 -1 ,500) + $14,500+ 21,750]/33,000 =$1 .25
(c) 29,000 x ($0.3943 = 1.25) = $47,685
(d) Ending WIP

Mat (6,000 x .3943) 2,366

Conv: (4,000 x 1. 25) 5,000 7,366

AACSB: Analytic
A/CPA: FN-Measurement
Bloom's: Application
Difficulty: Medium
Learning Objective: 3
Topic Area: Using Product Costing in a Process Industry
 ~ / FIF--o

('{e Clark~:mical special ~ ~

~~~trainers. The oil is produced in three processes.
Company produces a .........
efinin Blend in and Mixin . Raw oil materials
are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the
blending process when processing is 50% completed.
The following Work-in-Process account for the Refining Department is available for the month of July. The
July 1 Work-in-Process Inventory contains $1 ,500 in material costs.

Work-in-Process : ~iji)
Beginning balance (5,000 gal, 80% complete)
Materials (30,000 gal.)
Direct labor
Overhead
Ending balance (6,000 gal. , 2/3 complete)

The Clarke Chemical Company use first-in first-out (FIFO) costin .

Required (use 4 decimal places for computations :
(a) Compute the equivalent units of production for Refining for July.
(b) Compute the material cost per unit and the conversion cost per unit for July.
(c) Compute the costs transferred to the Blending Department for July.
(d) Compute the July 31 Work-in-Process Inventory balance.
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(a) Mat EUP: 30,000; Conv EUP: 29,000
(b) Mat: $0.41 ; Conv: $1 .25
(c) $48,590
(d) $7,460

Feedback: started & completed: 30,000 - 6,000 = 24,000; transferred out: 5,000 + 30,000 - 6,000 = 29,000
(a) Mat EUP =(0% x 5,000) + (100% x 24,000) + (100% x 6,000) =30,000
Conv EUP: (20% x 5,000) + (100% x 24,000) + (2/3 x 6,000) =29,000
(b) Mat: $12,300/30,000 = $0.41; Conv: ($14,500+ 21,750)/29,000 = $1 .25
(c) Beginning WIP $ 7,500
Conversion cost to complete ( 1,000 x $1.25) L250 $ 8,750
Stm1ed & completed (24,000 x ($0.41 + 1.25) 39.840
Total trm1sferred out $48,590
(d) Ending WIP
Mat (6,000 x .41) 2,460
Conv: (4,000 x 1.25) 5.000 7,460

AACSB: Analytic
A/CPA: FN-Measurement
Bloom's: Application
Difficulty: Medium
Learning Objective: 5
Topic Area: Assigning Costs Using FIFO
 tX~7 vJA
« Clarke Chemical Company produces a special kind of bo
~~:~rainers.
· at is widely used by professional
The oil is produced in three processes: Refining Blending and Mixin . Raw oil materials
are introduced at the beginning of the refining process. A "moun am-a1r scent material is added in the
blending process when processing is 50% completed.
The following Work-in-Process account for ding Department is a · the month of July. The vJ h,~
July 1 Work-in-Process inventory contain $5,920 · material costs, and 1.56/unit i costs tra f · Av~~ ~-In
~m the Refining Department. ><- r6l:::JQ . . l l- ,,~~ r' ~
a~-~
Work-in-Process: Blendin <..l
Beginning balance (8,000 gal, 30% complete)
Costs transferred in from Refinin g (29,000 gal. )
Materials
Direct labor
Overhead
Endip.g balance ( 4,000 gal. , 40% complete)

The Clarke Chemical Company use weighted average costing .

Required (use 4 decimal places for computa 1ons :
(a) Compute the equivalent units of production for Blending.
(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)
(c) Compute the costs transferred out to the Mixing Department for July.
(d) Compute the July 31 Work-in-Process Inventory balance.
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(a) Trans-in EUP: 37,000; Mat EUP: 33,000; Conv EUP: 34,600
(b) Trans-in: $1 .64; Mat: $0.81 ; Conv: $0.63
(c) $101 ,640
(d) $7,568
Feedback: transferred out: 8,000 + 29,000- 4,000 =33,000
(a) Trans-in EUP: (100% x 33,000) + (100% x 4,000) = 37,000
Mat EUP: (100% x 33,000) + (0% x 4,000) =33,000
Conv EUP: (100% x 33,000) + (40% x 4,000) = 34,600
(b) Trans-in: [($1.56 x 8,000) + 48,200]/37,000 = $1.64
Mat: ($5,920 + 20,810)/33,000 =$0.81
Conv: [($22,850 - 5 , 9~0 - 121.480) + 5,748 + 11 ,600]/34,600 =$0.63
(c) 33,000 x ($1.64 + .81 + .63) =$101 ,640 -
(d) EWIP:

Trans-in: (4,000 x $1. 64) $6,560

Mat: - 0-
Conv: (1 ,600 x $0.63) L008 $7,568

AACSB: Analytic
A/CPA: FN-Measurement
Bloom's: Application
Difficulty: Hard
Learning Objective: 3
Topic Area: Using Product Costing in a Process Industry
 FlFO

rainers. The oil is produced in three processes: R finin Blend in and Mixi . Raw oil materials
are introduced at the beginning of the refining process. A "mountain-air scent" material is added in the
blending process when processing is 50% completed.
The following Work-in-Process account for ing Department is availabl month of July. The
July 1 Work-in-Process inventory contain $10,370 i conversion costs, and $ .56/unit 1 costs transferred
in from e Refinin D .
Tor -in-Process: Blendinu c ortv O, M tt:f.e~ '\
Beginning balance (8,000 gal, 30% complete) $22,850 - Iot '> 7o ~ I). 1 4.-~ ( pl~~ed) .
0
Costs transferred in fi·om Refining (29,000 gal. ) 48200 t
Materials
Direct labor
X t.;£ ~~~
It ~
20,810 .../' ~<i?, I {'rt
5,748
Overhead '(# 4-5j J,;'f'a 11 ,600
Ending balance ( 4,000 gal. , 40% complete)

The Clarke Chemical Company use(fi'iit-jn. first-out (FIFO) costin:i)

Required (use 4 decimal places for computations):
(a) Compute the equivalent units of production for Blending.
(b) Compute the unit costs in the Blending Department for the month of July. (HINT: There are three!!)
(c) Compute the costs transferred out to the Mixing Department for July.
(d) Compute the July 31 Work-in-Process Inventory balance.
(a) Trans-in EUP: 29,000; Mat EUP: 33,000; Conv EUP: 32,200
(b) Trans-in: $1.6621 ; Mat: $0.6306; Conv: $0.5388
(c) $101,700
(d) $7,510

Feedback: Blended started & completed : 29,000 - 4,000 =25,000; transferred out: 8,000 + 29,000- 4,000
= 33,000
(a) Tran-in EUP = (0% x 8,000) + (100% x 25,000) + (100% x 4,000) = 29,000
Mat EUP =(100% x 8,000) + (100% x 25,000) + (0% x 4,000) =33,0QO
Conv EUP: (70% x 8,000) + (100% x 25,000) + (40% x 4,000) = 32,200
(b) Trans-in: $48,200/29,000 =$1 .6621 ; Mat: $20,810/33,000 =$0.6306; Conv: ($5,7 48+ 11 ,600)/32,200 =
$0.5388
(c) Beginning \\TJP $22,8 50
Materials to complete (8,000 x $0.6306) 5,045
Conversion cost to complete ( 5,600 x $0.53 88) 3.017 $30,912
Statied & completed (25,000 x ($ 1.662 1 + 0.6306 + 0.5388) 70,788
Total transfen·ed out $10 1,700
(d) Ending WIP
Trans-in (4,000 x $1.662 1) $6,648
Conv: (1,600 x 0. 5388) 862 7,510

AACSB: Analytic
A/CPA: FN-Measurement
Bloom 's: Application
Difficulty: Hard
Learning Objective: 5
Topic Area: Assigning Costs Using FIFO