CPA REVIEW SCHOOL OF THE PHILIPPINES
Mani la
ADVANCED FINANCIAL ACCOUNTING GERMAN/LIM/VALIX/K. DELA CRUZ/MARASIGAN
SELFTEST
ABC Company adds material at the start of production. The following production
information is available for June:
Beginning Work in Process Inventory
(45% complete as to conversion) 10,000 Units
Started this period 120,000 Units
Ending Work in Process Inventory
(80% complete as to conversion) 8,200 units
Beginning Work in Process Inventory Costs:
Material P24,500
Conversion 68,905
Current Period Costs:
Material P 75,600
Conversion 130,053
1. Compute the conversion cost per equivalent unit using the weighted average method
A. 1.01
B. 1.05
C. 1.55
D. 1.61
The following production information for XYZ Co. is available for June:
Beginning inventory (30% complete as to Material B and 60% 700 units
complete for conversion)
Started this cycle 2,000 units
Ending inventory (50% complete as to Material B and 80% 500 units
complete for conversion)
Beginning inventory costs:
Material A P14,270
Material B 5,950
Conversion 5,640
Current Period costs:
Material A P40,000
Material B 70,000
Conversion 98,100
Material A is added at the start of production, while Material B is added uniformly
throughout the process.
ST-9004
2. Assuming a FIFO method of process costing, compute the cost per EUP for
conversion.
A. 45.50
B. 45.00
C. 43.03
D. 47.59
3. Assuming a weighted average method of process costing, compute the cost per EUP
for conversion.
A. 39.90
B. 45.00
C. 43.03
D. 47.59
The following information is available for RST Company for the current year:
Beginning Work in Process Costs of Beginning Work in Process:
(75% complete) 14,500 units Material P25,100
Started 75,000 units Conversion 50,000
Ending Work in Process Current Costs:
(60% complete) 16,000 units Material P120,000
Abnormal spoilage 2,500 units Conversion 300,000
Normal spoilage (continuous) 5,000 units
Transferred out 66,000 units
All materials are added at the start of production.
4. Using weighted average, compute the equivalent units for material
A. 82,000
B. 89,500
C. 84,500
D. 70,000
5. Compute the cost assigned to normal spoilage using weighted average
A. 31,000
B. 15,500
C. 30,850
D. None
ST-9004
STU Company has the following information for July:
Units started 100,000 units
Beginning Work in Process: (35% complete) 20,000 units
Normal spoilage (discrete) 3,500 units
Abnormal spoilage 5,000 units
Ending Work in Process: (70% complete) 14,500 units
Transferred out 97,000 units
Beginning Work in Process Costs:
Material P15,000
Conversion 10,000
All materials are added at the start of the production process. STU Company inspects goods at
75 percent completion as to conversion.
6. Assume that the costs per EUP for material and conversion are P1.00 and P1.50,
respectively. Compute the amount of the period cost for July using FIFO
A. 0
B. 9,375
C. 10,625
D. 12,500
The FORMING Department is the first stage of RST Manufacturing Company’s production
cycle. The units in-process beginning in this department was 60% incomplete as to
conversion while the units in-process at the end was 25% converted. Information as to
conversion in the FORMING Department follows:
Units Conversion Costs
Units in process, beg 25,000 P 21,100
Units started and cost incurred 135,000 P197,400
Completed and transferred 100,000
7. Using FIFO costing, compute the conversion cost of the units in-process at the end
A. 21,100
B. 28,900
C. 28,200
D. 28,500
In Process, beginning (3/5 additional work to be done) 120,000 units
Completed and Transferred-out units 750,000 units
(Of the units started in process, ½ represents work in process
at the end, which were 40% completed during the current period)
8. Compute the conversion cost EUP using Average costing
A. 792,000
B. 870,000
C. 1,002,000
D. 954,000
ST-9004
LMN Manufacturing produces a product that passes through two departments. The units
from the molding department are completed in the assembly department. The units are
completed in assembly by adding the remaining direct materials when the units are 60%
complete with respect to conversion costs. The production activity in the assembly
department for the current month is presented as follows. LMN uses the FIFO method.
Beginning inventory units (25% complete with respect to conversion costs) 8,000
Units transferred in from the molding department during the month 42,000
Units to account for 50,000
Units completed and transferred to finished goods inventory 38,000
Ending inventory units (40% complete with respect to conversion costs) 12,000
Units accounted for 50,000
9. Compute the units transferred out from the molding department
A. 38,000
B. 42,000
C. 30,000
D. 40,800
10. Compute the equivalent units in LMN’s assembly department for direct materials
for the current month
A. 40,800
B. 38,000
C. 42,000
D. 30,000
Suggested Answers:
1. C 6. C
2. B 7. C
3. A 8. C
4. C 9. B
5. D 10. B
ST-9004
