ACC108: COST ACCOUNTING AND CONTROL
PROCESS COSTING
PROBLEM 1
Bioman Corporation produces chemical products. The following are from the company’s Mixing Department:
Work in process, beg 8,000 units, 30% complete
Units started 7,000
Work in process, end 2,000, 75% complete
1. Assuming all materials are added at the start of the process and the conversion cost is applied evenly to the process.
2. Assuming all materials are added at the end of the process and the conversion cost is applied evenly to the process.
3. Assuming materials are added 20% at the start of the process, additional 30% when the process is 60% complete, additional 20%
when the process is 80% complete and additional 30% at the end of the process. Conversion cost is applied evenly to the process.
4. Assuming materials are added 30% at the start of the process, additional 40% when the process is 50% complete, and an additional
30% at the end of the process. Conversion cost is applied evenly to the process.
5. Assuming materials are added 50% at the start of the process, and the balance is added when the process is 80% complete. Conversion
cost is applied evenly to the process.
Required: Compute the EUP for materials and conversion cost using: (1) Weighted Average Method; (2) FIFO Method.
PROBLEM 2
The beginning work in process inventory showed a balance of P48,240. Of this amount, P16,440 is the cost of direct materials and
P31,800 are conversion costs. There were 8,000 units in the beginning inventory that were 30% complete with respect to both direct
materials and conversion costs.
During this period, 17,000 were transferred out and 5,000 remained in the ending inventory. The units in the ending inventory were 80%
complete with respect to direct materials and 40% complete with respect to conversion costs.
Cost incurred during the period amounted to P126,852 for direct materials and P219,120 for conversion costs.
Required: Compute the following using FIFO and Weighted Average:
1. Equivalent unit of production for materials and conversion costs
2. Cost per equivalent unit for materials and conversion costs
PROBLEM 3
INSPIRE Inc.is a company manufacturing a product known as “HOPE” which undergoes a uniform process prior to its completion. For
the year ended Dec 31, 2022, the following data are provided by the company:
a. The work in process inventory on Jan 1, 2022 is 10,000 units which are 80% incomplete as regards to conversion cost while the
work in process inventory on Dec 31, 2022 is 60% complete as regards to conversion cost
b. The total units started during the year amounted to 90,000 units while the total units manufactured during the year amounted to
70,000 units
c. There is no spoilage during the period
d. It is the company’s policy to apply direct labor and factory overhead evenly throughout the period while 2/5 of direct materials
are added at the start of the process while the remaining direct materials are added at the end of the process.
e. The cost of Jan 1, 2022 work in process inventory consists of P100,000 direct materials, P200,000 direct labor and P300,000
factory overhead.
f. The total manufacturing cost for the year consisted of P2M direct materials, P5M direct labor and P3M factory overhead.
Required: Compute the following using FIFO and Weighted Average:
1. Equivalent unit of production for materials and conversion costs
2. Cost per equivalent unit for materials and conversion costs
PROBLEM 4
ABC Corp. has two departments. The following are the data of the two departments:
Quantity Department 1 Department 2
Beginning WIP, October 1 32,500 22,500
incomplete as to material 20% 30%
complete as to conversion cost 75% 40%
Units started in October 120,000 ?
Units completed in October ? 112,500
Ending WIP, October 31 27,500 ?
complete as to material 60% 0%
incomplete as to conversion cost 80% 60%
Costs
Beginning WIP
Transferred in 0 287,500
ACC108: COST ACCOUNTING AND CONTROL
PROCESS COSTING
Materials 200,000 120,000
Conversion 187,500 42,500
Current Period
Transferred in ?
Materials 875,000 125,000
Conversion 500,000 300,000
Required: Prepare the cost of production report for the two departments using Weighted Average and FIFO Method.
PROBLEM 5
SUCCESS Company employs weighted average process costing system in the assembly department and FIFO process costing system
in the finishing department concerning its only product which undergoes production in assembly department and finishing department.
The following data for the year ended Dec 31, 2022 are provided:
ASSEMBLY DEPARTMENT
Jan 1, 2022 10,000 units - 40% completed Direct Materials 300,000
as to conversion cost Direct Labor 500,000
Factory Overhead 200,000
Dec 31, 2022 15,000 units - 80% completed ?
as to conversion cost
Units started during 40,000 units Cost added during 2022
the year Direct Materials 1,200,000
Direct Labor 1,500,000
Factory Overhead 1,300,000
FINISHING DEPARTMENT
Jan 1, 2022 5,000 units - 70% incomplete Transferred In 1,000,000
as to conversion cost Direct Materials 600,000
Direct Labor 100,000
Factory Overhead 300,000
Dec 31, 2022 3,000 units - 10% incomplete ?
as to conversion cost
Units started during Cost added during 2022
the year Direct Materials 3,000,000
Direct Labor 4,000,000
Factory Overhead 1,000,000
Additional information for the year:
It is the company’s policy to add conversion cost evenly throughout the period in the two departments.
It is the company’s policy to add all direct materials in the assembly department at the start of the process while all direct
materials in the finishing department are added at the end of the process
There is no spoilage in both departments.
Required:
In the assembly department, what is the cost of goods manufactured or cost assigned to units completed for the year ended December
31, 2022?
In the assembly department, what is the cost assigned to December 31, 2022 work in process inventory?
In the finishing department, what is the cost of goods manufactured or cost assigned to units completed for the year ended Dec 31, 2022?
In the finishing department, what is the cost assigned to Dec 31, 2022 work in process inventory?
