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Process Costing

The document contains several production cost problems involving computing equivalent units produced (EUP) and cost of production reports under different assumptions about when materials are added and different inventory costing methods. Multiple departments and production processes are considered with inputs, outputs and costs provided.

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106 views

Process Costing

The document contains several production cost problems involving computing equivalent units produced (EUP) and cost of production reports under different assumptions about when materials are added and different inventory costing methods. Multiple departments and production processes are considered with inputs, outputs and costs provided.

Uploaded by

misonim.e
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Problem 1 (EUP COMPUTATION)

Units received from preceding department 10,000 units


Units completed and transferred 8,000 units
Units in process, 60% completed 2,000 units
Compute for the EUP of DM and Conversion costs. Assuming:

a. Materials are added 100% at the beginning of the process.


b. Materials are added 100% at the end of the process.
c. Materials are added 50% at the beginning of the process and the remaining 50% when the units
are 40% completed.
d. Materials are added 50% at the beginning of the process, 30% when the units are 20% complete
and 20% at the end of the process.

Problem II (ILLUSTRATIVE CASE)

The following data were taken from the books of Michelle Co. for the month of June:

Department 1 Department 2
Units
Started 25,000
Completed and transferred 20,000 18,000
In process, end 5,000 2,000
Stage of completion 40% 50%
Costs
Direct Materials 100,000 54,000
Labor 66,000 38,000
Overhead 44,000 19,000
In Department 1, materials are added at the beginning of the process while in Department 2, materials
are added at the end of the process.

Required:

a. Prepare the cost of production report of the 2 departments.

Problem III (WEIGHTED AVERAGE- EUP COMPUTATION)

Units in Process, Beg. (40%complete) 5,000


Units Started 20,000
Units Completed 18,000
Units in process, end (80% complete) 7,000
Compute for the EUP assuming average method is used and materials are added 100% at the beginning
of the process.

Problem IV (ILLUSTRATIVE CASE- AVERAGE METHOD)

The following information relates to the operations of LMN Company for the month of August 2016.

Units
In Process, Beg (40% complete) 1,000
Received from Department 1 8,000
Completed and transferred 8,200
In Process, end (20% complete) 800
Costs In Process, Beg Current
Cost from preceding department 13,500 81,000
Materials 9,000 72,000
Conversion Costs 5,036 83,580
Required: compute or prepare the cost of production report for the month of august
Problem V

Woodrose Corporation produces a product in two departments A and B. Data for the month of August
2016 are given as follows for Department B.

UNITS
Received from Department A 50,000
Completed and Transferred to warehouse 40,000
In Process, Aug 31(60% completed) 5,000
Lost during the month 5,000
COSTS
From Department A 225,000
Added in Department B during the month
Materials 135,000
Labor 103,200
Factory Overhead 103,200
In this department, materials are added 100% at the beginning of the process.

Required: Prepare the cost of Production Report under the following assumptions:

a. Lost units classified as normal, discovered at the beginning of the process.


b. Lost units classified as normal, discovered at the end of the process.
c. Lost units classified as abnormal, discovered at the end of the process.

Problem VI

Seashore Company produces product which requires processing in the departments. In the second
department, materials are added at the beginning, increasing the units received by 20%. The following
data pertain to the operations of Department 2 for June.

Units received from Dept. 1 50,000 units


Units completed and transferred to Dept. 3 45,000 units
Units in process, end 15,000 units
Stage of completion 80%
Cost from dept. 1 600,000
Cost added in the department
DM 240,000
Labor 171,000
Overhead 114,000
Required: prepare the cost of production report.

Problem VII

The following data were taken from the books of Denver Company which manufactures a single product
through a two-department manufacturing process- machining and finishing. In the production process,
materials are added to the product at the beginning in both departments. Normal spoilage occurs in the
finishing department and the spoiled units are not detected until units are completed and inspected.

Machining Department Finishing Department


Units
Beginning Inventory 0 20,000
Stage of completion 50%
Transferred In 0 60,000
Started in Production 80,000 0
Transferred Out 60,000 60,000
Ending Inventory 20,000 18,000
Stage of completion 25% 70%
Spoiled Units 0 2,000
Beginning Inventory costs
DM 0 28,000
CC 0 27,500
Prior Department costs 0 118,000
Current Costs
DM 320,000 90,000
CC 130,000 193,800
Required: Prepared the cost of production report for the month using: FIFO method and Weighted
Average Method

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