Beginning goods in process inventory (March 31)
Units of product 30,000 units
Percentage of completion – Direct materials 100%
Percentage of completion – Direct labor 65%
Direct materials costs $4,300
Direct labor costs $ 700
Factory overhead costs applied $ 920
Activities during the current period (April)
Units started this period 90,000 units
Units transferred out (completed) 100,000 units
Direct materials costs $ 12,900
Direct labor costs $ 6,700
Factory overhead costs applied $ 7,680
Ending goods in process inventory (April 30)
Units of product 20,000
Percentage of completion – Direct materials 100%
Percentage of completion – Direct labor 25%
Process Cost Summary
Weighted Average
Cost Charged to Production
Costs of beginning goods in process
Direct Materials
Direct Labor
Factory Overhead
Costs incurred this period
Direct materials
Direct Labor
Factory Overhead
Total costs to account for
Unit Cost Information
Units to accounts for: Units accounted for:
Beginning goods in process Completed and transferred out
Units started this period Ending goods in process
Total units to account for Total units accounted for
Direct Direct Factory
Equivalents Units of Production (EUP) Materials Labor Overhead
Units completed and transferred out
Units of ending goods in process
Direct materials
Direct labor
Factory overhead
Equivalent units of production
Direct Direct Factory
Cost per EUP Materials Labor Overhead
Costs of beginning goods in process
Costs incurred this period
Total costs
/EUP
Cost per EUP
Cost Assignment and Reconciliation
Costs transferred out (COGM)
Direct materials
Direct labor
Factory overhead
Costs of ending goods in process
Direct materials
Direct labor
Factory overhead
Total costs accounted for
1. What is the equivalent units of production for direct materials?
A. 105,000
B. 110,000
C. 115,000
D. 120,000
2. What is the equivalent units of production for direct labor?
A. 90,000
B. 95,000
C. 100,000
D. 105,000
3. What is the equivalent units of production for factory overhead?
A. 95,000
B. 100,000
C. 105,000
D. 110,000
4. What is the cost per equivalent unit of production (4 decimals) for direct materials?
A. .1267
B. .1433
C. .1742
D. .1944
5. What is the cost per equivalent unit of production (4 decimals) for direct labor?
A. .0705
B .1145
C. .1398
D. .1484
6. What is the cost per equivalent unit of production for factory overhead?
A. .0645
B. .0995
C. .0524
D. .0819
7. What is the cost of goods manufactured?
A. 26,890
B. 27,640
C. 29,571
D. 32,580
8. What is the cost of ending goods in process?
A.3,115
B. 3,345
C. 3,629
D. 3,985
Measuring Cost Behavior
Month Setup Hours (X) Setup Costs (Y)
January 100 $1,000
February 200 1,250
March 300 2,250
April 400 2,500
May 500 3,750
9. What is the variable cost per unit (3 decimals) using the high-low method?
A. $6.875
B. $5.934
C. $7.875
D. $8.545
10. What is the fixed cost using the high-low method?
A. $215.55
B. $245.95
C. $275.25
D. $312.50
11. What is the total cost at a level of 750 setup hours using the high-low method?
A. $5,115.45
B. $5,468.75
C. $6,215.55
D. $6,935.85
12. What is the variable cost per unit using least-squares regression?
A. $4.50
B. $6.75
C. $7.25
D. $8.95
13. What is the fixed cost using least-squares regression?
A. $100
B. $105
C. $125
D. $135
14. What is the total cost at a level of 800 setup hours using least-squares regression?
A. $4,235
B. $4,765
C. $4,985
D. $5,525
Cost-Volume-Profit Analysis
Sport Caps Co. manufactures and sells caps for different sporting events. The fixed costs of operating the company are $160,000 per month, and the variable costs for caps are $7.50 per unit. The caps are sold for $10 per unit. The fixed costs provide a production capacity of up to 100,000 caps per month.
15. What is the contribution margin per cap?
A. $1.15
B. $1.50
C. $2.35
D. $2.50
16. What is the break-even point in terms of the number of caps produced and sold?
A. 75,000
B. 51,000
C. 55,000
D. 64,000
17. What is the amount of net income at 90,000 caps sold per month?
A. $65,000
B. $54,000
C. $72,000
D. $68,500
18. What is the contribution margin ratio?
A. .25
B. .17
C. .32
D. .45
19. What is the break-even point in terms of sales dollars?
A. $615,000
B. $640,000
C. $655,000
D. $675,000
20. What is the dollars of sales needed to provide $45,000 of after-tax income, assuming an income tax rate of 20%.
A.$825,000
B. $850,000
C. $865,000
D. $872,000