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Process Costing Activity 1

The document contains 4 problems regarding process costing using weighted average and FIFO methods. Problem 1 asks to calculate equivalent production costs using both methods for 4 cases where materials are added at different stages. Problems 2 and 3 provide cost and production data for companies and ask to calculate the cost per equivalent unit of direct materials and conversion costs using weighted average and FIFO methods respectively.

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Shiela Mae Reyes
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518 views2 pages

Process Costing Activity 1

The document contains 4 problems regarding process costing using weighted average and FIFO methods. Problem 1 asks to calculate equivalent production costs using both methods for 4 cases where materials are added at different stages. Problems 2 and 3 provide cost and production data for companies and ask to calculate the cost per equivalent unit of direct materials and conversion costs using weighted average and FIFO methods respectively.

Uploaded by

Shiela Mae Reyes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem 1.

Equivalent production

Case A.

In process, beginning (60% incomplete) 6,000 units

Received from pending department 44,000 units

Completed and transferred 45,000 units

In process, end (30% complete) 5,000 units

**Materials in this department are added at the end of the process after quality control inspection.

Case B.

In process, beginning (60% incomplete) 6,000 units

Received from pending department 44,000 units

Completed and transferred 40,000 units

In process, end (30% complete) 5,000 units

**Materials in this department are added at the end of the process after quality control inspection.

Case C.

In process, beginning (30% complete) 10,000 units

Received from pending department 30,000 units

Completed and transferred 32,000 units

In process, end (40% complete) 6,000 units

Lost units (normal-discovered at the beginning) 2,000 units

**Materials in this department are added 100% at the beginning of the process.

Case D.

In process, beginning (50% complete) 5,000 units

Received from pending department 25,000 units

Completed and transferred 22,000 units

In process, end (80% complete) 5,000 units

Lost units (abnormal-discovered when 60% completed) 3,000 units

**Materials in this department are added 100% at the beginning of the process.

Required: Equivalent production for materials and conversion cost using (a) Weighted Average method
and (b) FIFO method.
Problem 2. RJ Inc. is a company manufacturing a product known as “COLOREE” which undergoes a
uniform process prior to its completion. RJ Inc. employs weighted average process costing system for
this product. For the year ended December 31, 2023, the following data are provided by the company:

a. The work-in-process inventory on January 1, 2023 is 10,000 units which are 80% incomplete as
regards to conversion cost while the work-in-process inventory on December 31, 2023 is 60%
complete as to 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 January 1, 2023 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 material, P5M—direct labor
and P3M—factory overhead.

What is the cost per equivalent unit of production of Direct Material and Conversion Cost,
respectively?

Problem 3. GANDA Inc. employs First-In-First-Out process costing system in accounting for its
product. For the year ended, December 31, 2023, the following data are provided:

a. The 30,000 work-in-process inventory on January 1, 2023 is 40% complete as regards to


conversion cost while the 20,000 work-in-process inventory on December 31, 2023 is 90%
incomplete as regards to conversion cost.
b. The total units started during the year amounted to 60,000 units. There is no spoilage during the
period.
c. It is the company’s policy to apply direct labor and factory overhead uniformly throughout the
period while 3/4 of direct materials are added at the start of the process while the remaining
direct materials are added at the end of the process.
d. The cost of January 1, 2023 work-in-process inventory consists of P200,000—direct materials,
P300,000 direct labor, and P500,000 factory overhead.
e. The total manufacturing cost for the year consisted of P1M—direct material, P3M—direct labor
and P4M—factory overhead.

What is the cost per equivalent unit of production of Direct Material and Conversion Cost,
respectively?

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