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(Computation of Fifo and Wa Eups Case-To-Case) : B.C.Villaluz

This document provides information and problems related to process costing systems, including weighted average and FIFO costing methods. It addresses calculating equivalent units and costs for materials and conversion for multiple production cases. It also includes problems involving spoilage calculations for determining costs assigned to units transferred out, normal spoilage, abnormal spoilage, and ending work in process.

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Bob Ghian Tovera
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162 views

(Computation of Fifo and Wa Eups Case-To-Case) : B.C.Villaluz

This document provides information and problems related to process costing systems, including weighted average and FIFO costing methods. It addresses calculating equivalent units and costs for materials and conversion for multiple production cases. It also includes problems involving spoilage calculations for determining costs assigned to units transferred out, normal spoilage, abnormal spoilage, and ending work in process.

Uploaded by

Bob Ghian Tovera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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B.C.

Villaluz
PROCESS COSTING SYSTEM

PROCESS COSTING WITHOUT SPOILAGE

Problem 1: (Computation of FIFO and WA EUPs; case-to-case)


For each of the following independent cases, compute for the equivalent units of direct materials and conversion assuming the company
uses
1. Weighted-average (WA) process costing system
2. First-in first-out (FIFO) process costing system

Case 1:
Hampton Textile Co., manufactures a variety of fabrics. All materials are introduced at the beginning of production; conversion cost is
incurred evenly through manufacturing. The Weaving Department had 2,000 units of work in process on April 1 that were 30% complete
as to conversion costs. During April, 11,000 units were started and 9,000 units were completed and transferred out. On April 30, 4,000
units remained in production, 40% complete with respect to conversion costs.

Case 2:
Hampton Textile Co., manufactures a variety of fabrics. All materials are introduced at the end of production; conversion cost is incurred
evenly through manufacturing. The Weaving Department had 2,000 units of work in process on April 1 that were 70% incomplete as to
conversion costs. During April, 9,000 units were completed and on April 30, 4,000 units remained in production, 40% complete with
respect to conversion costs.

Case 3:
Hampton Textile Co., manufactures a variety of fabrics. Materials are added as follows: 50% is added at the beginning of production,
25% is added when production is at 60%, and 25% is added when production is at 90%. Conversion cost is incurred evenly through
manufacturing. The Weaving Department had 2,000 units of work in process on April 1 that were 40% complete as to conversion costs.
During April, 9,000 units were completed and on April 30, 4,000 units remained in production, 20% incomplete with respect to conversion
costs.

Problem 2: (Cost of Production Report; WA and FIFO)


South River Chemical manufactures a product called Zbek. Direct materials are added at the beginning of the process, and conversion
activity occurs uniformly throughout production. The beginning work-in-process inventory is 60% complete with respect to conversion;
the ending work-in-process inventory is 20% complete. The following data pertain to May:
Units
Work in process, May 1 15,000
Units started during May 60,000
Units completed and transferred out 68,000
Work in process, May 31 7,000

Direct Conversion
Total Materials Costs
Costs:
Work in process, May 1 P 41,250 P16,500 P 24,750
Costs incurred during May 234,630 72,000 162,630
Totals P275,880 P88,500 P187,380

Using the weighted-average method of process costing…


1. The equivalent units of direct materials total?
2. The equivalent units of conversion activity total?
3. The cost per unit of direct materials is?
4. The cost per unit of conversion activity is?
5. The cost of goods completed and transferred during May is?
6. The total costs remaining in work in process on May 31?

Using the FIFO method of process costing…


1. The equivalent units of direct materials total?
2. The equivalent units of conversion activity total?
3. The cost per unit of direct materials is?
4. The cost per unit of conversion activity is?
5. The cost of goods completed and transferred during May is?
6. The total costs remaining in work in process on May 31?

PROCESS COSTING WITH SPOILAGE

Problem 1: (Cost of Production Report; w/ spoilage)


The following information is available for Talmidge 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

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B.C.Villaluz
All materials are added at the start of production.

1. Using weighted average, what are equivalent units for material?


2. Using weighted average, what are equivalent units for conversion costs?
3. What is the cost per equivalent unit for material using weighted average?
4. Using weighted average, what is the total cost assigned to the units transferred out?
5. Using weighted average, what is the total cost assigned to the partially finished units?
6. What is the total cost assigned to the normal lost units using weighted average?
7. What is the total cost assigned to the abnormal lost units using weighted average?
8. Using FIFO, what are equivalent units for material?
9. Using FIFO, what are equivalent units for conversion costs?
10. Using FIFO what is the total cost assigned to the units transferred out?

Problem 2: (Cost of Production Report; w/spoilage)


Bowman Company has the following information for July:

Units started 100,000 units


Beginning Work in Process: (35% complete) 20,000 units
Normal spoilage 3,500 units
Abnormal spoilage 5,000 units
Ending Work in Process: (70% complete) 14,500 units
Beginning Work in Process Costs:
Material P15,000
Conversion 10,000

All materials are added at the start of the production process. Bowman Company inspects goods at 75 percent completion as to
conversion.

1. Assume that the costs per EUP for material and conversion are P1.00 and P1.50, respectively. What is the amount
of the period cost for July using FIFO?
2. Assume that the costs per EUP for material and conversion are P1.00 and P1.50, respectively. Using FIFO, what
is the total cost assigned to the transferred-out units (rounded to the nearest peso)?
3. Assume that the costs per EUP for material and conversion are P1.00 and P1.50, respectively. What is the cost
assigned to normal spoilage, using weighted average?
4. Assume that the costs per EUP for material and conversion are P1.00 and P1.50, respectively. What is the cost
assigned to the units in the ending work in process?

END OF HANDOUT

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