Learning Objective 5-4

1) The process-costing method that assumes the earliest equivalent units in work in process are completed first is:

A) unit of output method.

B) physical unit method.

C) work in process method.

D) last in, first out (LIFO).

E) first in, first out (FIFO).

2) Equivalent-unit and cost-per-equivalent-unit calculations under the weighted-average process-costing method ________ unit costs in beginning inventory with units and costs of work done in the current period.

A) detracts

B) merges

C) divides

D) multiplies

E) subtracts

3) The weighted-average process-costing method:

A) calculates equivalent cost-per-unit of all work completed to date.

B) fails to calculate the cost-per equivalent unit of all work completed to date.

C) ignores the cost-per equivalent unit of all work completed to date.

D) ignores the costs from work started during the current period.

E) only takes into account those costs from work at the beginning of work in process.

4) Managerial accountants realize that a distinct feature of the first-in, first-out (FIFO) process-costing method is that:

A) it keeps work done on beginning inventory blended with work done during the current period in the calculation of equivalent units.

B) it keeps separate work completed on beginning inventory before the current period from work completed in the current period.

C) work done on ending inventory is kept separate from the work during the calculation of equivalent units and is usually not included in the calculation.

D) managerial accountants fail to assign the costs of the previous accounting period’s equivalent units in beginning work-in-process inventory.

E) it is really the same as the weighted-average process-costing method.

5) The manager at Marilyn’s Sewing Service reported $75,000 total conversion cost and 41,500 total conversion cost in equivalent units. Compute the conversion cost per equivalent unit.

A) $1.50

B) $1.60

C) $1.70

D) $1.80

E) $1.90

6) The accounting manager at Sarah’s Pet Toy Manufacturing uses the weighted-average method costing system. The accountant reported 85,000 units in beginning work in process and 32,000 equivalent units of work done in the current period. Compute the equivalent units completed and transferred out in the current period.

A) 100,000

B) 107,000

C) 110,000

D) 117,000

E) 123,000

7) The accountant at John’s Cycle Manufacturing Company uses the weighted-average costing method. The accountant reported that there were 400 equivalent units of work completed to date, and reported the following cost:

Summary of Total Costs


Beginning work in progress (direct materials, $15,000 + conversion costs $6,000)


Costs added during March (direct materials, $12,000 + conversion costs $18,000


Total costs to account for in March



Compute the conversion cost-per-unit using the weighted-average costing method.

A) 50

B) 52

C) 54

D) 60

E) 62

8) Under FIFO, ending work-in-process inventory comes from units that were started but not fully completed during the current period.

9) The weighted-average cost is the total of all costs entering the work-in process account divided by total equivalent units of work done to date.

10) Managerial accountants base their choice between the weighted-average method and the first-in, first-out method based on a desired effect on taxes, operating income, performance evaluation, and debt covenants.


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