_—_ cl it ti 708 1B Production or under a condition eous) products, where the costs ef 5 3 using a cost of i dered of job cost sheet that is tised under job production report, are accumulated on each report per department and are allocated to work in ooess ending units and units transferred to next department or to the ord goods. The unit cost assigned to each product is determined by finish iding the total cost of the department by the number of units produced. Methods of Costing under Process Costing 1, FIFO - it is more complex costing method. Under this method, units which are first place in the production process will be the first one to be completed and transferred out. FIFO method does not commingle (combine) costs of the beginning inventory units and started this month units. The beginning inventory costs are separately maintained from current month costs and will be allocated only to completed beginning inventory units, while the current month costs will be allocated between completed units this month and work in process énd. 2. Weighted Average - it is the simplest costing method to calculate costs. It assumes all cost of materials, labor and overhead, whether from beginning inventories (costs from preceding period) and those incurred this period are jumped (average) together and assigned to completed units. Thus, there is no differentiation of units started this month and from the preceding month. 1 of Application of Costs Elements in Procst, ectony overhead were - Even Application of Costs - materials, labor and factory te tion i ion) throu spplied at th = rate (stage of completion) tl > ; which resulted to only se ee puatation ‘of equivalent unit of production for material, labor and factory overhead. applied i bor and overhead were app Uneven Application of Coste - materiale. CO icy resulted in a diferent a ion process; lerent the production P : + and overhead. tquivatent unite production (EUP) for materials, labor 8 ™ Three Parts of Cost of Production Report gh a department tity Schedule . it shows the flow of uni’s throu A f production. ‘uring the period and the computation of equivalent unit of PCosting 704 ee Phytol Tow af Units ~t scone fr ll he unin the depan inti apes te ream Ss Cee an, caren ‘spoiled units. * b. Equivalent Units of Production (EUP) - using the stage of completion. could have been produced conversion costs) in a given departmental costs. Process costing calculates cost per equivalent unt instead of just considering the finished units to properly match costs ts Products that are constantly moving through the process. 2. Costs to Account for (Cost Schedule) ~ it is composed of beginning inventory costs, the current month surred by the department, and if the department is not the first cost the process, it will also include those costs receive from previous department. It shows the computation of cost per equivalent units of production (unit cost] of materials and conversion costs and its total cost 3. Cost Accounted for (Cost Reconciliation/Assignme: the disposition of costs charged to those units that accounts for completed and transferred to next department or finished goods inventory, to work in Process at the end of the period and the spoiled units, ACCOUNTING FOR LOST UNITS 1. Normal Lost Units ‘These are spoiled units which are expected or anticipated, inherent company. Weight losses, shrinkage, evaporation, normal loss. Normal loss increases the cost of production of the usable goods realized. ‘The costs of normal lost units are accounted as product costs. art of the cost of all finished units or work in process units. of the normal lost units are absorbed by the good units, Pigspection Poin Stage of Completion ‘aw material, etc. Abnormal loss ig aceite Scetie eaSTes are taken wi al lost units will be st of the abnor accoun ect een Yea pe Luctior nel pecause Sgnen incurred. Therefor, ‘costs oe Pets aad een vay the good units. normal oti é of Lost Units petection, S0tts (expense) Deeatinuous Loss «loss occur evenly thru * Continuous normal lost units how the pada preces, Gato the process | O% = Use the method of neget Dating the process End of the process une the Tote: if the problem would be silent on the inspection pin assume SS Romal lost units were discovered at the start of the proces, Theo. 210 stage of completion. mal ost units Unit cost om preceti | Dept = Unit cost of Dept Cost of normal lost waits | the never put in production when the lost units were discovered)Process Cnt Cnteg I95 Absorbing Good Units —__ - C FirOcostflow | Start/ During |, _FIF x nd ‘WIP beg. Finished and Started in process Finished and Transferrec WiPending units t —Weighted Average cost flow __ [Finished and Transferred units v WIP ending units I q | 2. Continuous Abnormal lost units Determination of Stage of Completion _ Inspection Point __ Stage of Completion Start of the process | 0% - it excludes EUP which res During the process | 100% - Lost process are as: of the process beca unnecessary in th End of the process | 100% - becau: (completed uni Note: if the problem would be sil abnormal lost units were discovered at the 100% stage of completion. Absorbing units ‘The costs of the abnormal lost units are not absorbed by the good units Process and it shall be treated as period costs (expense), B. Discrete Loss it occurs atthe speci point in the product it letected only when the firm per con the inspection point. inm performed a quality ‘The cost of normal discrete lost units should only be allocated 1° W pave Passed the inspection point. Such units should be consiered 6° «production process, ny tits that have not reached the inspect aE EE ETE a EXERCISES tem 1: XYZ Company Uses a weighted average pr problem 30,000 units this month. — XYZ had 12700 ang system and sare tes to conversion costs in begining Workin assay Fanits that were 40 percent complete as to conversion cote meet s in ending 3,000 -n Process Inventory. Work in what are equivalent units for conversion costs? a. 37,800 40,800 b. 40,200 4. 42,000 Answer B Suggested Solution ‘Average WIP beg 12,000 Started in Process __ 30,000 200, ‘Actual Work done Conversion Fr 39,000 100% 39,000 WIP end 3,000 40% 1,200 Total 42,000 40,200 a FIFO process costing sytem. The company had 5,000 units that were 60 percent complete as to conversion & at the beginning of the month. The company started 22,000 units this pened and had 7,000 units in ending Work in Process Inventory that were 35 Peres complete as to conversion costs. Problem 2: LMN Company Co. uses are added at the Req. 1: What are equivalent units for materials, if materials are added beginning of the process? a.” 18,000 ¢. 20,000 b. 22,000 4. 27,000 materials are added at the Req, 2: What are equivalent units for materials, ¥ mas nd of the process? & 13000 es c. 20,000 >. 22/000 4. 27,000 Answer 1) B 2) cPract Costag 709 ‘Suggested Solution Req. 1 WIP beg Started in Process WIP beg. FT Stated in Process FT WIP end Total Req. 2 WIP beg. FT Stated in Process FT WIP end Total Problem 3: Sol Corporation has the following informatio: Beginning Work in Process Inventory (75% complete as to conversion) 22,500 Started in Process. 81,000 Ending Work in Process Inventory (15% complete as to conversion) 28,200 Beginning WIP Inventory Costs: Material pre. Conversion, 158,175 Current Period Costs: Material P 102,900 Conversion 102,500 All material is added at the start of the process ant finis! oducts are transferred out. Process and all finished p: Req. 1: How many units were transferred ou ae . cee ihe Req. 2: Assume that weighted aver a ee: Be glint unt fo materia" PUES coating ie sed, What a. PO: rae ans at FIFO monn a tang 709 that FIFO process co ‘Assume P tng ia uae Ret: ent unit for conversion? What is the cont per ea 3.05 ©. P4.25 a e387 4. P6.40 © 3. joswer 1) 62)3)B suggested Solution Req: 1 ening Work in Process 2a,s00 ha: Units Started 2.500 deduct: Units Transferred Out un Bading Work in Process 5,200) ae Actual Work done Materials, Fr 75,300 100% 75,300 WIP end 28,200. 100% © __28,200 Total 703.500 103,500 Cost Schedule Materials Last Period 76,500 mis Period 102,900 Total Material costs 179°400 Divide by EUP 103,500 Unit Cost em Re Actual Work done Conversion wereg rr ES 22,500 25% 5,625 wated in Process FT 52,800 100% 52,800 een 28.200, 15% ©__4,230_ pn 703,500 02,655 Dae ost n4as0s Unit oe, EUP 62,655 — “3.87 Problem Bag # Love Co. has the following data forthe month of May: B 700 units and gqe;8 N¥entory (30% complete as to Material ; sarees rome = Sted yg mbtee for conversion) : sie ani a come (60% complete as to Material B lete for conversion)Process Costing J10 Beginning inventory costs: Material A Current Period costs: Material A Material B Conversion Material A is added uniformly throughout Req. 1: Assuming a FIFO method of process costing, compute th per EUP for conversion. a. P45.50 c. P43.03 b. 45.00 d. PA7.S9 Req. 2: Assuming a weighted average method of process cost average cost per EUP for conversion. a. P39.90 . P43.03 b. P45.00 d. P4759. Answer 1) B 2) A Suggested Solution Req. 1 FIFO Actual = WD Conversion WIP beg. FT 700, 40% 280 SIP FT 1,500° 100% 1,500 WIP end 500 80% ‘400 Total 2,700 2,180 Cost this period 98,100 / 2,180 = 45.00 Req. 2 Average Actual WD Conversion FT. 2,200 100% 2,200 WIP end 500. 80% ‘400 Total 2,700 2,600 Cost last period 5,640 + This period 98,100 = 103,740 / 2,600 - 39.90 ea) Pre Cnty 21, sem 5: Paz Corporation has the folowing inn, pro Work in Process Inventory eginnin ete as to conversion) ‘ation for August: com (70% ein process 12,000 units saree Work in Process Inventory 48,000 unite Ending Tplete as to conversion) uw 17,000 units pepinsing WIP Inventory Costs: Material 46,800 Conversion 101,214 current Period Costs: Material . 63,000 Conversion 153,912 ‘il material is added at the start of the process and all ished paducts age transferred out. Frotes 1: How many units were transferred out in August? "31,000 ©. 43,000 b. 36,000 . 48,000 Req. 2: Assume that weighted average process costing is used. What is the cost per equivalent unit for material? ©. PL31 d. P1.83 Req. 3: Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion? a P3.44 ©. P5.71 b. P4.2q d. P7.03 Answer 1) C 2) D 3) B Sseested Solutio, eat’ Solution Beginning Wo 12,000 Ps ing Work in Process ep Rqquet!_ Units Transferred Out 13.000) ing Work in Presse 7 me? Actual Work done M09 ee ; rang 17000 10% hom a : om 60,000.Precees Costing 79 Cost Schedule L Req. 3 WIP beg. FT Stated in Process FT WIP end Total This Period costs Divide by EUP Unit Cost Problem 6: The following costs were accumulated by Company during April: |. Cost Material | Cor Transferred | Costs from Dept. 1 Beginning Inventory 17,050 7 P.34,000 ‘Current Period Cost 184,000 201,050 | P 34,000 | _P 109.451 Production for April in Department 2 (in units} 2,000 60% complete WIP-April 1 ‘Transferred Out during April 20,000 WIP-April 30 5,000 40% complete Materials are not added in Department 2 until the very end of processing in Department 2. How much is the cost of work in process-end? a. P10,000 . P40,210 b. P50,000 d. 50,160 Answer: B ‘Suggested Solution Actual" WD 4 terials fr 2,000 100% WD Com WP Ore ved in FT 18,000 100% 120 40% nversion eee 8,000. 0%’ 180 100%, 800 25,000 xan mS potal a 20,000 2,000 t —_ aes CFPD Materials vials 184,000 34,000 wnat unit Cost wend Materials (0 x 1.70) : c¢ 2,000 x 5.00) 10,000 CFPD (5,000 x 8) 40,000 Total 50,000 Problem 7: Tams adds materials at the beginning of in Depart FBU. Conversion costs were 75% complete as to the 8000 sate een 1 and 50% complete as to the 6,000 units in WP at May 31, Dusng Man 12,000 units were completed and ferred to the next department. An inaisis ofthe cost relating to WIP at May 1 and to production act fo May Cost Materials Conversion WIP, May 1 9,600 4,800 Cost added in May 15,600 14,400 am cost per equivalent unit for May under FIFO and Average: tf 72.68 and 2.68, ¢. P3.16 and 2.68 P3.16 and 3.16 4. P3.16 and 3.16 Answer ¢ “Weested Solution we WD Materials, WD Co SRE FT 8,000 0% «2S 000 3. 100% 4 MP ena 4,000 100% bres 50% _3,000_ "otal —8,000_ 100% 0,000, 9,000 18,000 10,00 aan‘This Period Divide by EUP Unit Cost Average Fr WIP end Total Materials CC Last Period 9,600 4,800 This Period ____18,600 Total cost 25,200 Divide by EUP 18,000 Total Unit Cost 1.40 2.68 completed and transferred to the next depar relating to work-in-process on September 1 and to September is as follows: Costs Materials ‘Answer A ‘Suggested Solution FIFO Actual Work done Materials Work done = CC, WIP beg. FT 9,500 0% - 30% 2,88 SIP FT 2,500 100% 2,500 100% WIP end —7,000_ 100% 7,000 60% ro 79,000, Total Boe 9,500 riod ‘This Pe’ Divide by EUP 9,500 Di Cost te Average Actual 12,000 FT ead 7.000 wa 79,000, Materials cc iP, Sept. 1 10,000 7,500 This Period 42,750 __ 52,595 eal 52,750 60,025 Divide by EUP—_ 19,000 ___16200__total__ Unit Cost 2.78 3716.49 4 _ se Problem 9: Maxwell 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) eee Beginning Work in Process Inventory Costs: Eon Material rae Conversion 68,908 Curent Period Costs: 75,600 eee z coe 130,053 ted average What is th walent unit using the weight fe conversion cost per equi Method? Pe & Flor PLoS Answer ¢‘Suggested Solution Average Actual FT WIP end Total Last Period ‘This Period Total cost Divide by EUP__130,000_128,360__Total Unit Cost 0.77 1.85 2.32 Problem 10: Gerry Company adds materials at the start of following production information is available for June: (45% complete as to conversion) ‘Starfed this period 120,001 Ending Work in Process Inventory [0% complete as to conversion] —— ‘Beginning Work in Process Inventory Costs: ‘Material ‘Conversion ‘Current Period Costs: Material ‘Conversion What is the cost of all units transferred out using the FIFO method? a. 204,624 . P287,004 b. P191,289 4. P298,029 Answer: C ‘Suggested Solution Actual wD cc WIP beg. FT 10,000 55% 5,500 SIP FT 111,800 100% 111,800 WIP end 8,200 80% ___6,560_ Total 730,000 123,860 Se Process ee es a 75,600 130 oa 053 ti py BUP 320,000 123.860 tiny 1.63 5 = pect — OES 08 hg — Fr war be ft tals (x 63) . 1.05) bc (6,500 ane ci cost (24,500 + 68,905) rast non ) 83495 96159 11,800 x .63) 7 OS) 0,434 27390_ters25 287,008 problem 11: The following data for the month of August 2080 of 2 Corp "Soca mis yoo or) baz aegeing ai ns 2 reset ee ame Units added to production 363,200 Units completed and transferred 428,030 Ending units in process 135,170 All beginning units in process ‘izect materials. Beginning unit costs in Dept. 1 and 40% complete as to conversion cost 2. All ending Umits in process are 100% complete as to direct materials as well s 50% ‘complete as to conversion costs in both departments. complete for to conversion For Dept. 2 what is the difference in equivalent production conversion ost basis between using the weighted average an FIFO costing mets t 21,000 units c. 44,000 units 8. 32,000 units 4. 53,000 units faswer B Qieested Sotution cc Teithted Average a Workdort 438,030 Completed ee 100% ‘585 Regione worsted SBT) SK sts att inventory 135, 95618Press Costing 3p FIFO In process beg FT 80,000 348,030 135,170 50" Difference 495,615 ~ 463,615 = 32,000 Process Costing Spoiled Units Problem 12: Adonis Manufacturing Company make: departments, The production data for Department 2 f Quantities: In Process, April Received from Completed and transferred In Process, April 30 (60% completed) 10% completed) Production Costs: Received from Dept.1 Materials Conversion cost Materials are added at the start of the process, during the early stage of the operation. Using the is the cost of the ending work in process invent« a. P44,640 . P45,600 B. paseo 4. 6000 Answer: A Suggested Solution vernee wr bes 4,000 Transferred in __90,000_ 34,000 ; etal” = WD Materits «WDCC, FT 25,000 100% 25,000 100% 25,090 WIP end 6,000 100% 6,000 60% 3,66 Normalloss 3.000% oe Total aa Swe transfered incon yg 9 ransferred in cost Mater laterals t.1 16,300 "3 cc wi Sr 89,100 gO 140 mis. 105,400 7] 552 —81,000 1s (2.90 x 6,000) ater (p2.90 x 3,600) x 6,000) Coed (3.10 x 6: - Cree in NL cost (3,000 x F3.1 = 9,300 x 6,000/31,000 wiP end 4¢125,000 + WIP end 6,000 = 31,000 problem 13: The following information is available for Shea Company fr April Started this month Beginning WIP (40% complete) Normal spoilage (discrete) Abnormal spoilage Ending WIP (70% complete) 13,000 ‘Transferred out 72,500 units 80,000 units Beginning Work in process Costs: Material . P10,400 Conversion 13,800 Current Costs: Material 120,000, Conversion, 350,000 Jon points at Ailmaterials are added at the start of production and the inpecton P= the end of the process. Rea. 1: is of ising weighted average? ost per equivalent unit for material using a Pigg Pr ©. PLS6 % Peg d. P14 Re entory using FIFO? a ee is the cost assignéd to ending inven 8 psé/c09 ps3 l44 ——S—C~™Problem 14: Dong Abay had the following production for the month of Mazch: Started in process during March to finished goods during June ora Fe0 ree soso xed Solution Actual Wo completed and Transferred 6600 ome a. vies end 2 : ral ost 0) toe 12 fncoal ttm Total 10,000 8,800 Problem 15: Ong makes a single product in two Departments, The production data for Dept. 2 for the month of Aug 2020 follows: Production Cost ‘Transferred in Materials Conversion Quantities In beg (40% done} 10,000 Received from Dept. 1 75,000 ‘Completed-and Transferred In Process end (60% done) sommally out Matias are added at the start of the process, an nse soma (during the early stages of operation. ing FIFO met, SRLS the cost the WIP end using ave and COON SS re &, P211,600 ; ps3s,100 714.0088 tp P1L1,600 ; Pagasi25, apices” Aosmer 4Suggested Solution Req. Average Fr Actual WIP end Normal Total Last Period ‘This Period Total cost Divide by EUP x Unit Cost 3 CFPD ( 15,00 Share in Normal lost cost (7,500 x 3.10 x 15,000 /77,500) Total Req. 2 FIFO ‘Actual WD Materials WIP beg. FT 10,000 0% ‘Transferred in FT 52,500 100% 52,500 WIP end 1 15,000 Normal = Total” 85,000, 67,500 CFPD Materials CC ‘This Period 222,750 168,780 202,500 Divide by BUP _78,000__67,500__67,500_Total Uni 2.97 2.50 3.00_8.47 WIP beg. FT Materials (0 x25) Conversion (6,000 x 3) 18,000 Last Peried (40,750 » 9,500 +4,850) $5,100. 79,100 ‘Transferred in FT Materials (52,500 x 2.5) 131,250 Conversion (82,500 x 3) 157/500 GPPD (62,500 x 2.97) 135925 444,675 Share in Normal lst costs {7,800 x 2.97 = 22,278 x52,500/67,500) __ 17.325. — 100. 46: Air Supply produces a producy Prt Catng 723 ulm Jepartments. Bach deparanent fe NY 8 comin, 8 fiero eed with cumulating costs ant ye depengen woe Process is tas! id ‘the ident cost = who .nt assigned to him. You have Preparatior accounts és tA been assigned aa ef POS forth Departmen emt accountant fr jon data of Department A forthe m oth OF September, 2031 wee ag inthis department, cost are applied as follows: Materials - Added at the start Labor and overhead ~ evenly distributed Department costs incurred in Sept. were: Materials 756,000 Labor 17,390, ‘Overhead 13,880, Req. 1: Compute the current total units for materials, labor and overhead & PL23 c. PLOF > PLaz 4.PL25 Req. 2: Compute the adjustment for normal lost per unit 70.0368 0.0298 ». Poo360 4 po03s7 mswer 1) D 2) p Steested Sotution wp: Seren 14,000 Talend Process 200 aeMaterials. WD WIP beg. FT SIP FT This Period Divide by EUP Unit Cost Req. 2 Normal lost units x Unit cost Cost of normal lost units Divide by absorbing units (Beg. FT 14K + 56 SIP FT) 70,000_ Adjustment for lost units 0.0357 Problem 17: Need Me Corporation manufactures a continuous process in different departments. As their cos! given the production data of Department A to accumulate necessary reports: Units Work-in-process, May 1, 2031 (30% to incomplete) 15,000 Units started 65,000 Work-in-process, May 31, 2031 (50% complete) 3,000 Normal lost units discovered at the end of process 2,000 Costs Materials 78,000 Conversion 85,000 Work-in-process cost; May 1, 2031 45,000 Materials are added at the start of the production while conversion costs “* evenly distributed during the production process. Req. 1: Compute the current total unit cost for materials and conv a. P2.53 ©. P3.14 b. P2.45 4. P2.23 Req. 2: Compute the cost per unit of completed units as of May 31, 2031 a. P2.34 ©. P2.70 b. P2.64 4. P2.56 hw ted Solution eal Actual = WD Materia eet Ge GR , 100% 4: send 3,000 100% | °909 100% soson Normal lost 2,000 100% 2000 32% =~ 1,500 ea 80,000 soo 1% — 2.000 —_ oo 68.000" Materials cc — ‘this Period 78,000 85,000 Divide by EUP 65,000 68,000 Total 85,000 68,000 Total Unit Cost 120125 2.45 ss Req.2 wip beg FT Materials (1.2 x 0) - CC (1.25 x 4.500) 5,625 Last period cost 45,000 Total 50,625, SIP FT Materials (1.2 x 60,000) 72,000 CC (1.25 x 60,000) 75,000 147,000 Normal lost Materials (1.2 x 2,000) 2,400 CC (1.25 x 2,000) 2,500 Total 4,900 et 50,625 + 147,000 + 4,900 = 202,525 / FT 75,000 units = 2.70 in Naruto blending Problem 18: Materials are added atthe stat of he PEST maton it armament the first stage of the production O° Won it August: csioncost) 175009 Thank if Process, Aug 31 (50% complete a8 (© 75,000 Saneered to next department 350,000 Wor fe August ‘as to conversion cost 75,000 Lost i Process, Aug 1 (60% complete ‘ Production Pracess2 362.500 347,500 437,500 Answer B Suggested Solution FIFO WIP beg. FT Stated in Process FT WIP end Normal lost Total Average FT WIP end Normal lost Total Problem 1¢ following information is available for Tatum Company for the current year: Beginning Work in Process (75% complete) 14,500 units Material Started 75,000 units Conversion Ending Work in Process Current Costs: (60% complete) 16,000 units Material ‘Abnormal spoilage 2,500 units Conversion Normal spoilage 5,000 units (continuous) Transferred out 66,000 units Costs of Beginning Work in Process se 25,100 0/00 P120,000 300,000 All materials are added at the start of production. Req. 1: Using weighted average, what are equivalent units for material? a. P82,000 . P84,500 b. 89,500 4. P70,000 , Prue what is the cost assigned to normal spoiag Contig 127 €.Po USE Weighted average 4. P30,850 Work done 66,000 100% 66,000 rat wip end 16,000 100% 16,000 Normal lost 5,000 0% ‘Abnormal lost 2,500. 100% 2.500 al 9,500 84,500 Req. 2 fe Novcosts are assigned to normal, continuous spoilage. Higher costs are assigned to good units produced. Problem 20: Jenny Corp. produces a special kind of insecticides. Materials are added at the end of the production of Fabricating Dept. forthe month of March 2008, the following data were gathered: fork in Process March 1 Started in Process during the month re corresponding to the lost units were absorbed! of the following is i . a lowing is incorrect RE EUP of conversion cost under FIFO FIRQUP of work in process end ‘materials Sony method. Avera @ me EUP of materials under FIFO and 4°). Be EUP of conversion cost under FIFO Werage a e the same to gare 8,000 comparedProcess Casting _ —— ne Answer D Suggested Sotution FIFO In Process bes. F&T 80,000 Started In process 90,000 In process ending 90,000 Normal lost units 20,000 Average Far 170,000 100% 170,000 170,000 In Process end. 90,000 0% 34000 Normal lost units 20,000 0% oo 470,000 224,000 Problem 21: Lebron Company has the following information for July Units started 100,000 units Beginning Work in Process: (35% complete) Normal spoilage (discrete) Abnormal spoilage Ending Work in Process: (70% complete] ‘Transferred out Beginning Work in Process Costs’ Material Conversion All materials are added at the start of the production process. Harris Company inspects goods at 75 percent completion as to conversion. ‘What are equivalent units of production for conversion costs, assuming FIFO? a. p108,900 . P108,650 b. P103,900 . P106,525 Answer D ‘Suggested Solution ‘WIP beg. 20,000 Started in Process 100,000 120,000 : KLM Company has the fol problem 22: lowing information for February: Units Started February BWIP (65% incomplete 1900 uae Normal spoilage nn eae Abnormal spoilage es EWIP (30% incomplete} 14,500 unite Transferred out sama Beginning WIP Costs, Material 15000 Conversion 10000 Al materials are added at the start ofthe production process. KLM Company inspects goods at 75% completion as to conversion. Assume that the costs per EUP for materials and conversion are P2.50 and P3.75, respectively. Using FIFO, what is the total cost assigned to the transfered out units (rounded fo nearest peso)? a. PS73,594 555,000 >. P573,954 dd. P548,594 Answer A waeested Sotution wees, 20,000 tarted in Process 100,000 OO ) materns 3D AS e00 So bee Fr 20,000 0% 590 100% 77.008 SP Fr H 100% = «77,000 Ty 10,180 WP ena 7,000 10m 14.500 TO 2.628 Heal lost 1439) 100% «= 350) toe SE qmomnal lost 5,000 100% 75.500. = ‘otal 0000. ae 120,department follows: [WIP Februar 7 [Spoiled Units “Transferred-out Raw materials are added at the bi the Cutting department without changing Beginning work- while the ending takes place when experiences a 4 WIP, Feb 7 ‘Current Cost 1; Using FIFO Cost flow assumption, ya 4 Castng 734 eg: ventory on February 28? (Roun at is the fet gin Round of alg "Mati yg ANS¥ETS only to 2 deca 25) pee p13.421.98 ©. P54,500 59 f. P54,090- 4. P13,449.9) 9: Using Weighted Average Cost flow ass Ret.“ goods transferred to Sewing departin aswers ‘only to 2 decimal places) q.ps71,127.47 = Ps%6s027 £.P572,730.53 apse ‘umption, what ent for February. pe Amu of UY? Round of fl paswer 1) B 2) C suggested Solution Req. FIFO WIP beg. FT ‘Transferred in FT WIP end Normal (4% x 61,000) Abnormal (2,600 - 2,440) Total Materials CC This Period 169,520 424,255 Divide by EUP 65,200__ 64,550 _Total Unit Cost 2.60___ 657 9.17 22 __ 8s WP end Materials (6,400 x 2.6) 16640 A ; 52,381 Conversion (5,440 x 6.57) 35,741 Share “tein Normal lost costs Comes 440 x 2.6) x 6,400/62,600 Wersion (1,830 x 6.57) x 5,440/61,640 Avera. cc Pr WD Materials es 61,000 Wp, 61,000 100% 61,000 1's 440 Nomnatt 6,400 100% 6400 Soe 180 : 2,44 120. a 2,440 100% 160. 1% ayi Pee 5,100 350,000 rualcpyeuP 84500 78,100 toa purcost 348 60 Ee J: With You Company manatcre tiem 2 “ Piaed entirely at the beginning of the process. 5% normal loss we ic erage cccurs Because of caponton Done ses ste tere 60 cxmplted, ee ens ce a ws be ‘aero ousices of partially converted soft drinks to 3 oft drinks. Al ingredients are WiP-February 1 3,800 02 | ‘Started in production ~65,200 oz. | “Transferred-out 34,000 ox. ending inventories were 75% and 80% converted on February 1 and 28, what is the equivalent units of production (BUP) for conversion? 4. P59,392 ©. P62,852 8. 59,992 P6148 16,000 units 2'500 units Answer A 5,000 units Suggested Sotution 66,000 units IFO wD. Mateils MP beg. Fr 4,800 0% SP FT 49,200 100% a ena 7740 100% formal (5% x 65,200) 3/260 100% Sonormal 5,000 100% _$.000. tal 70,000 ae Answer: A. ‘Suggested Solution Probie, 1 for August 2¢ : . — ‘average faloget® 26: The production data for Dep ee ‘WIP end 40,000 Mp, costs) (000 Normal * August 1 jone as to conversion 296, a Satetin Augued oo Total sferred ou \ugust ° Speer ott daring AueConversiot (Current Costs: Materials Conversion Costs Unit costs: Materials © Normal spoilage What are the cost all Next Department ted to? a. 3,264,000 b. P4,456,000 ©. 3,944,000 a Pa,433,440 Answer D ‘Suggested Sotution WIP beg 40,000 Started in Process. 296,000, 336,000 FIFO Actual WD Materials. WD Com WIP beg. FT 40,000 0% é 6 SIP FT 204,000 100% 204,000 WIP end 60,000 100% "60,000 Normal (11% x 244,000) 26,840 100% 26,840 ‘Abnormal (32,000 "26,840) "5,160 100% ___ 5,160. Total 336,000, [256,000 Materials Conversion ‘This Period 2,960,000 1,884,000 Divide by EUP 296,000 __'314,000* Total__ Unit Cost 10.00, 6,00 | 16.00 30,000) Ae gotal Costs ve out 4,0 ‘fransferred re Costs problem 27: Apple Company employs process cos jusses through two departments: Assem < Se A uni of prader fyformation regarding Assembly Departme 38 before itis complete. Work in-process, Aug 1 4,000 units 3,000 Raw materials are added at the beginning department without changing the number of pectin units are 75% converted. The company usually experienced the completed units. Cost data for the month of August Materials Labor Work in-process beginning 32,400. 26,400 rent cost P111,600 P88,200 Using Weighted Average Costing, compute Peal cost of units traneferred-out and total cost of work in proses ea P36,000 ; P36,000 Nenad Norma) Abnorm (5% % 24,000) Tear ™*2 (3,000 - 1,200)Last Period ‘This Period 14,400 i 21,600 Normal ‘900 100% 640 ‘otal 87,500 30,000 736_ 37,376 Materials oc 8,640 sis Period 120,000 350,000 12,150 Divide by EUP 80,000 80,600 Total Unit Cost 1.50434 sa 12 Transferred out costs ited Conta 494,200 less Cost of abnormal lost Materials (1.50 x 900) 1,350 Problem 28: The following information is available for Updharmadown conversion (4,945 900)". 906 © 5256 Corporation forthe current month: ee Started this month 80,000 units Beginning WIP : (8/5 incomplete} 7,800 Problem 29: Bowman Company has the following information for Ju ‘otal spoilage 2'000 Abnortalopoage 900 ts stared "S000 ute er) ? naaning Work in Process: (35% complete) a a (20% to be done) ioral : Transfered out 72.500 unite ‘roma eel ge (ainerete) Bae ling Work es te) ad ning Wn in ee Cot Tran Work in Procas (0% complete) it ae Material : aa ecAae “inning Work in Process Costs: 15,000 Current Costs i Conetial 10,000 Material Pane sion Conversion aso onal 3s. Bowman Conmaerials are added at the start of the production Po ‘Pany inspects goods at 75 percent completion &$ 0 aot scum and conversion are PLOT OD Piso’ that the EUP for material ‘July using Fl How much is the total product cost as accounted using the more SS; Pespeetively, Wha the amount te 9 = method representing the physica otc ing i Pd 710625 P9,375 4. P12,500 ‘Ail materials are added at the start of production and the inspection the end of the process. (Use two decimal places) msAnswer C Suggested Solution FIFO WIP beg. FT SIP FT WIP end Normal Abnormal Total 20. Abnormal cost Costs Materials (1 x 5.000) Conversion (1.50 x 3,750) Total Problem 30: Yummy Yogurt Company prod Mixing and Finishing. In Mixing, all ingredients exc is added and start of production. In Finishing, into containers. Adding the fruit Yogurt is placed into containers or at the 98 percent spoilage is abnormal. Finishing Department BWIP (100% fruit, 0% container, 30% CC) Gallons transferred in Gallons of fruit added EWIP (100% fruit, 0% container, 60% CC) Abnormal spoilage BWIP Costs: ‘Transferred In Fruit cc Current Costs: ‘Transferred In Fruit Containers cc ‘Total Costs juces youu! 5,000 5,500 1,200 1,700 1,000 9,700 10,500 15,000 12,400 54,000 11,000 98,000 210,600 gallons gallons che cost of units transferr puchis tl ed Out Using 1p148,826 ©. P170,07 ett average? 193,135 4. P165,219 Fruits WD caatans 9,000 100% Die. on Transferred Out Costs Fruits (6.51282 x 9,000) Containers (1.22222 x 9,000) Se 0.27278 x 9,000) (1.88889 x 9,00¢ he 9,000) jin a continuous process Pen 21; The Paul Corp pede sinde m ‘departments. below: The fay 2030, ae show cost and production data for the month of MAY vi Wat ata: uring PE ay) Maree Process, May 1 e000 429,000 poe 23625 736,000 ‘Ory Overhs 157: leadFe TE aa Pret Coty 781 ‘METHOD - ing Actuz ed uantity data: ¥1F0 MET AT ae wD cc Work in Process, , May 1 (50% completed) iP bee OT P&T 122.000 50% 10.09 Started in Process qransfer 95,000 100% 105,009 Units Received from Preceding Dept wip sk eee 60% 000 Units Completed and Transferred Normal 35.000. 0% Work in Process, May 31 (60% completed) 25,000 70,000" a Lost during the process 3,000 cont ed this Month = rials 7 nit cont [All materials are added at the start of the process Cutting Departn Mate ne ry Overhead 7 3.2356 How much is the total cost transferred out? Factory Ove 226.000. Rae ‘Assembly Fishing ‘otal ; a 762,500 1,430,000 Cost from Preceding Dept. 675,000 = 150,000 4.5000 b. 675,000 1,190,000 Add: WIP beg cost 90,000 ©. 607,500 1/050,000 ‘otal Cost 7,430,000 saa @ 675,000 1,430,000 var beg FOr a Materials (0 x0) Conversion (5 x 10,000) s0.000 ae WIP boa, Cont 20m 140a00 Transferred - in F&eT : ‘Suggested Solution TIPO METHOD -Catting Actual WD Materials GFPD {4.5 x 105,000) sr2500 ‘WIP beg. F&T 15,000 0% : carer 108,000) _ ; version (6 x 105, a, Srared fs process FAT! . 138,000 100% 135000 Nortnal lost (4-5 x 18,000 = 67,500 x 105/135) ‘Normal Lost 5,000 0% " 720,000 a Other way of computing ae Total Costs less: Work in Process, end Unit cost CFPD (4.5 x 30, 135,000 a Conversion (5 x 18,000) Bion Normal lost 100 ‘Transferred Cost - The cost of i cost of normal lost in the Gnishing department transferred out by the Cu of normal out by the Cutting Dept. The cost of n 450 = 67,900) vil be shared by the Transferced ~ in units Gnsbed and Total Costs 762,500 Wransferred and Work in Process, end units. Less: Work in Process, end " Allocatios n of Normal Lost Costs ES enamm = aa vae ace © Sa eens: 675,000 wip aferred-in Feet 105000 UO 3s — 30,000 135,000 Materials (2 x 25,000) EsNote: If the problem would be silei the inspection point, assume normal lost units were discovered at the start of the process. Therefore. zero stage of completion. cuits tr e, units Sul in process Problem 32: The Dept. X is the first two stage of production process. Spoilage G. units is identified when the units have completed the Dept. X process. Cost of spony siem 94: To determine the EUP ising the pp uunits are assigned to units completed and transferred to the Secost Prd for the current period must be stated in unis “Mt of proess conting department in the period spoilage is identified. The following informate’ weGompleted during the Period and units engin 7 concerns Dept. X's conversion costs in December 2020: & jeted from beginning inventory Wentory, >. Cam period, end unis pata Tals] Coavenin eee Garing the pei and uni oa soste §, Processed during the period and units comple | Beginning work in process (50%) complete ‘30,000 | “P 150,000) 4 Units started 120,000 | —1.,132'500 jem 35: The weighted average method dies fom FFO mex | Spoilage ~ normal 7,500 Prati in that the weighted average: #0 method of process [ Completed and transferred 705,000 Sil always yield a higher cost per equivalent wait as inp {80%) complete ones bp, Considers caeine work a Erect inver to be fully complete. €. Does not consider the degree of completion of begstane set in poena ie ae aoe el are bois Soe ee pent cone he es of Sng ofp ok ‘ext Department? oA 4. Allof the above. a. 897, b. 961,875 280 Problem 36: The numerator of weighted-average unit cost calculations is a. current period cost. Aneetes b. cost of beginning inventory. © current period cost plus cost of beginning inventory ‘Suggested Solution 4. cost of goods sold WIP beg. 30,000 7 Started in Process 420.000 Problem 37: The main difference between the FIFO and wright everage Total units x methods of process costing is {ithe treatment of beginning Work in Process nvenon so een "isco Soe “Soom jAueccumencrommeroe ad : ‘ . ent of lost units vent focon Lost units 7,500 100% le In the treatment of ending Work in process Inventor hot 750,000 : pvp of FPO me Peblem 38: Which is irrelevant in determining the XP & EUP of ending inventory WIP Beg cost 150,000 , b, y Started in Process cost 1,132,500. BUP Unit cost ° pening inventory unita Total 1,282,500 + 142,500 9 dg -ompleted units 9st of beginning inventory point within te os 1,282,500 aan inspection ‘Least Coat of Ea conversion ost pblem 39: If the normal spoilage incencet om ret out based (30,000 x 9) 270,000 a Ain the cost of that spoilage sho transt Cost transferred to next Dept. 1,012,500 wait {Mlecated to ending work in process amt \eir relative values.Ee ee one 744 . Testa with the cost of the units completed in that department during tng s c. Incloded withthe cost ofthe unit sold during the period 4. Allocated to the good units that have passed the inspection point. Problem 40: True Faith Company uses the weighted average materials are added at the beginning of the process. The EUP would be the sum of: . Units in beginning work in process and the started and completed. b. Units in ending work in process and the units started and completed. ©. Units in ending work in process and the units started. 4d. Units in beginning work in process and the units started. Problem 41: A continuous loss a. Occurs evenly throughout the production process. ‘b. Never occurs during the production process. ¢. Always occurs at the same place in a production process, d. All of the above Problem 42: The four steps necessary to determine the cost of goods completed. and the ending inventory valuation inthe process cost system are: Allocate costs to transferred and partially completed units. b. c. Written off as a loss on an equivalent unit basis at d. Absorbed by all units that passed the inspection point on an equivalen ‘unit basis. Problem 44: The cost of abnormal discrete units must be assigned to. Good units Lost units a Yes No b. No No © Yes Yes a. No Yes Problem 45: The numerator of FIFO unit cost calculations is a. current period cost. b. cost of beginning inventory. c. current period cost plus cost of beginning inventory. —ay organs es 4. cost of goods sold ‘ich of the following is not relevant *N determining weighted Problem 48: Using the process costing eytem, the journal ety toc te is from Department