Lesson 2 Process Cost Accounting Pages 67  74
1. A plant that uses process costing has 8,000 units in beginning work in process, 15,000
more started, and 5,000 units in the ending work in process. Using this information, answer
the following questions on a separate sheet of paper. Label each answer carefully and
show all of your work. (Each answer is worth 3 points.)
a. How many units are there to account for?
b. How many units are transferred using the average cost method?
c. How many units are transferred using the firstin, firstout method?
d. How many units were both started and completed during the period?
2. The Spangle Company uses the process cost system and average costing. The following
prediction data are for the month of July:
Use the form at the end of this examination to prepare a cost of production summary for
the month. (This problem is worth 15 points.)
Production Costs
Work in process, beginning of month
Materials $2,500
Labor 1,200
Factory overhead 1,100 $4,800
Costs incurred during the month
Materials $13,500
Labor 9,200
Factory overhead 8,500 31,200
$36,000
Production Report Units
In process, beginning of month 500
Finished and transferred during month 3,800
Work in process, end of month 400
Stage of completion 50%
Use the form at the end of this examination to prepare a cost of production summary for
the month. (This problem is worth 15 points.)
3. The following data is for a production company:
Beginning inventory 1,000 units, threefourths completed
Finished and transferred 16,000 units
Work in process, end of month 2,000 units, onehalf completed
Assume that materials, labor, and factory overhead are added evenly throughout the process.
On a separate sheet of paper, complete the following problems. Label each answer carefully
and show all your work.
a. Using the average cost method, compute the equivalent production.
b. Using the firstin, firstout method, compute the equivalent production.
c. During the month, Department B received 10,000 units from Department A with a unit
cost of $10; 2,000 of these units were lost during production in Department B.
Determine the adjusted cost of these units.
d. During the month, Department 2 received 8,000 from Department 1 with a unit cost of
$15. Department 2 added materials that increased the number of units by 50%.
Determine the adjusted cost of these units.
(Each answer is worth 5 points.)
4. Complete Problem P59 on pages 246–247 in your textbook. Use the forms provided in the
Study Guide/Working Papersbooklet on pages WP161 to WP170.
(This problem is worth 20 points.)
5. Complete Problem P69 on page 290 in your textbook. Use the forms provided in the
Study Guide/Working Papersbooklet on pages WP201 to WP204.
(This problem is worth 15 points.)
6. Complete the Chapter 6 MiniCase, Parts 1 and 2, on pages 291–292 in your textbook.
Use a separate sheet of paper. Label each answer and show all of your work.
(This problem is worth 18 points.)

Rating:
5/
Solution: A plant that uses process costing has 8,000 units in beginning work in process, 15,000