University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

163

Pages:

2
Author:

stud_ice13

Here’s an overview with explanations and solutions for each of the multiple-choice questions provided. Multiple Choice Quiz Solutions 1. Equivalent units of production (EUP) are equal to: o Answer: (d) The number of units that could have been started and completed given the cost incurred. o Explanation: EUP represents the number of complete units that could have been manufactured, considering all the direct materials and conversion costs applied. 2. Recording the cost of raw materials purchased for use in a process costing system includes a: o Answer: (e) Debit to Raw Materials Inventory. o Explanation: When raw materials are acquired, they increase the Raw Materials Inventory, which is debited for this cost. 3. The Cutting department started with a beginning work-in-process (WIP) inventory of $20,000. Assigned costs: direct materials of $152,000, direct labor of $45,000, and applied overhead at 40% of direct labor. Transferred inventory cost: $218,000. Ending WIP balance? o Answer: (b) $17,000 o Explanation:  Total costs:  Direct materials = $152,000  Direct labor = $45,000  Overhead (40% of $45,000) = $18,000  Beginning WIP = $20,000  Total costs added = $20,000 + $152,000 + $45,000 + $18,000 = $235,000  Costs transferred = $218,000  Ending WIP balance = Total costs - Transferred costs = $235,000 - $218,000 = $17,000 4. A process has a beginning WIP inventory of 10,000 units (20% complete with conversion). Total units completed: 40,000. Ending WIP: 15,000 units (one-third complete for conversion). Find EUP for conversion (Weighted Average). o Answer: (a) 45,000 EUP. o Explanation:  EUP calculation using the Weighted Average method:  Completed units = 40,000 EUP  Ending WIP (one-third complete for conversion) = 15,000 × 1/3 = 5,000 EUP  Total EUP for conversion = 40,000 + 5,000 = 45,000 5. Assume the previous question’s data. Beginning WIP has $6,000 in conversion cost, and $84,000 in conversion cost is added this period. What is the cost per EUP for conversion? o Answer: (c) $2.00 per EUP. o Explanation:  Total conversion cost = Beginning conversion cost + Added conversion cost = $6,000 + $84,000 = $90,000  Total EUP (from question 4) = 45,000  Cost per EUP for conversion = Total conversion cost / Total EUP = $90,000 / 45,000 = $2.00 per EUP