The cost of beginning work in process inventory plus the costs added to production

1 MAA produces biscuits and uses process costing systems. MAA wants to know how the cost per equivalent unit is calculated under the weighted-average method of process costing considers

a.

all the costs entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period.

b.

all the costs that have entered work in process from the units started or transferred in during the current accounting period.

c.

all the costs that have entered work in process during the current accounting period from the units started or transferred in minus the costs associated with ending inventory.

d.

all the costs that have entered work in process during the current accounting period from the units started or transferred in plus the costs associated with ending inventory.

2 MAD produces biscuits and uses process costing systems. MAD wants to know the correct procedure of showing the physical flow of production units during a given month under the weighted average method?

a.

Physical units in beginning work in process + units started ‑ units completed and transferred out = units in ending work in process.

b.

Some other procedure not listed here

c.

Units in ending work in process + units in beginning work in process = units started + units completed and transferred out.

d.

Units started + units completed and transferred out + units in ending work in process = units in beginning work in process.

e.

Units in beginning work in process ‑ units started + units completed and transferred out = units in ending work in process

3 MAK company is preparing budgets for the coming financial year.  MAK is considering how to derive the raw materials . To derive how much raw material to purchase during an accounting period, an accountant would calculate the raw material required for production and then:

a.

add the beginning raw-material inventory and the desired ending raw-material inventory.

b.

add the beginning raw-material inventory and subtract the desired ending raw-material inventory.

c.

subtract the beginning raw-material inventory and the desired ending raw-material inventory.

d.

Some other process not listed here

e.

add the desired ending raw-material inventory and subtract both the beginning raw-material inventory and the expected units to be sold.

4 MAE produces biscuits and uses process costing systems. MAE wants to know Equivalent unit calculations are necessary to allocate manufacturing costs : 

a.

None of the allocation items listed here.

b.

Beginning work in process and units completed.

c.

Cost of goods sold and ending work in process.

d.

Cost of goods manufactured and beginning work in process.

e.

Cost of goods manufactured and cost of goods sold.

5 XYC is in the process of adopting an activity-based-costing system. They found that many traditional costing systems:

a.

trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates.

b.

write off manufacturing overhead as an expense of the current period.

c.

Some other process not listed here

d.

use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product costing.

e.

produce results far superior to those achieved with activity-based costing.

6 MAG company uses process costing. During 2020 MAG overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory. What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured, respectively?

a.

Overstated, overstated.

b.

Overstated, understated.

c.

Overstated, none.

d.

None, overstated.

e.

None, none.

7 MAF company uses process costing. They use materials at the start of the process and conversion cost is incurred uniformly throughout the process. Which of the following statements is TRUE?

a.

MAF Company cannot use process costing and must use job-order costing.

b.

MAF Company must calculate the unit cost of materials and the unit conversion cost separately.

c.

MAF Company will report the cost of materials with the cost of the ending inventory.

d.

MAF Company uses parallel processing.

8 MAM company is preparing budgets for the coming financial year and is considering the relevance of inventory levels.  The number of units in the sales budget and the production budget may differ because of a change in

a.

finished goods inventory levels.

b.

overhead charges.

c.

direct material inventory levels.

d.

sales returns and allowances.

9  ABC company is considering to adopt activity based costing. Which of the following statements is false?

a.

Under conventional costing, product cost distortions will be relatively insignificant if overhead costs are a small proportion of product cost.

b.

Activity-based costing will significantly improve the product cost accuracy where overhead costs are a small proportion of total costs.

c.

Activity-based costing will significantly improve product cost accuracy where there is significant product diversity

d.

Upstream and downstream costs are often a significant part of a product's costs.

e.

None of the above statements are false.

What is the beginning work in process inventory?

Which costs are included in work in process inventory?

What are the three costs added to work in process inventory during production?

Is work in process inventory included in cost of goods sold?