Process Costing MASaya

1. The Pagkaun Company manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of January, the work in
process accounts show the following debits:
Cooking Packaging
Beginning work in process P 0 P 6,000
Materials 40,000 21,000
Labor 16,000 9,000
Overhead 25,000 19,000
Costs transferred in 65,000

Required
Journalize the January transactions that involved the work in process accounts.

2. Prases Company uses a process cost system. Products are processed first by Department A, second by Department B, and then they are transferred to the
finished goods warehouse. Shown below is the cost information for Department B during the month of February 2020:

Costs of units transferred in P120,000

Manufacturing costs added in Department B:
Direct materials P60,000
Direct labor 6,000
Manufacturing overhead 19,000 85,000
Total costs charged to Department B in February P205,000

The cost of work in process in Department B at February 1 is P25,000, and the cost of work in process at February 29 has been determined to be P30,000.

Required
Prepare journal entries to record for the month of February:
A. The transfer of production from Department A to B.
B. The manufacturing costs incurred by Department B.
C. The transfer of completed units from Department B to the finished goods warehouse.

3. Prasesparin Company manufactures a single product by a continuous process, involving two production departments. The records indicate that P1,200,000 of
direct materials were issued to and P2,000,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is P120
per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled P350,000; and work in
process at the end of the period was P250,000.

Required
Prepare entries to record
A. The flow of costs into Department 1 for
(1) direct materials
(2) direct labor
(3) overhead
B. The transfer of production costs to Department 2.

4. Comfee Corporation manufactures pillows through two processes: Cutting and Sewing. In the Cutting Department, materials are added at the beginning of the
process and conversion costs are incurred uniformly throughout the assembly process. On March 1, 2020, the Cutting Department had 20,000 units that were 50%
complete. During March, the department added 80,000 units into production. On March 31, the Cutting Department had 4,000 units in ending work in process that
were 30% complete with respect to labor and overhead. Comfee uses the weighted average method.

Required
A. Prepare a reconciliation of the physical flow of units in the Cutting Department for Comfee Corporation.
B. Compute total equivalent units for materials and conversion costs for the Cutting Department for March.

5. Korona Chemical manufactures a product called Bayrus. 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 April:
Work in process, April 1 15,000 units
Units started during the month 60,000 units
Units completed and transferred out 68,000 units
Work in process, April 30 7,000 units
Total Direct Materials Conversion Costs
Costs:
Work in process, beginning P412,500 P165,00 P247,500
Costs incurred during April 2,346,300 720,00 1,626,300

Using the weighted-average method of process costing, prepare the cost of production report.
Process Costing MASaya
6. Macoolay Company uses a FIFO process-costing system. The following data relate to May:
Work in process, beginning 50,000 kg
Direct Materials 70% complete
Conversion 80% complete
Units started into production 160,000 kg
Work in process, ending 60,000 kg
Direct Materials 40% complete
Conversion 65% complete
Required:
A. Calculate the number of pounds completed during May.
B. Calculate equivalent units of materials and conversion for May.
C. Does Macoolay introduce all of its direct materials at the very beginning of production? Explain your answer

7. Yaman uses a weighted-average process-costing system and has one production department. All materials are introduced at the start of manufacturing; in
contrast, conversion cost is incurred uniformly throughout production. The company had respective work-in-process inventories on June 1 and June 30 of 62,000
units and 70,000 units, the latter of which was 40% complete. The production supervisor noted that Yaman completed 100,000 units during the month.
Costs in the June 1 work-in-process inventory were subdivided as follows: materials, P40,000; conversion, P90,000. During June,Yaman charged production with
P300,000 of material and P710,000 of conversion, resulting in a material cost per equivalent unit of P2.

Required:

A. Determine the number of units that Yaman started during June.

B. Compute the number of equivalent units with respect to conversion cost.
C. Determine the conversion cost per equivalent unit.
D. Compute the cost of the June 30 work-in-process inventory.
E. What account would have been credited to record Yaman's completed production?

8. Tyaga Company assembles its product in several departments. It has two departments that process all units. During July, the beginning work in process in the
cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included P12,000 for materials and P3,000 for
conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process.

Beginning work in process in the finishing department was 75% complete as to conversion. Direct materials are added at the end of the process. Beginning
inventories included P16,000 for transferred-in costs and P20,000 for conversion costs. Ending inventory was 25% complete. Additional information about
the two departments follows:

Cutting Finishing
Beginning work-in-process units 20,000 20,000
Units started this period 40,000 50,000
Units transferred this period 50,000
Ending work-in-process units 10,000 20,000
Material costs added P48,000 P28,000
Direct manufacturing labor P16,000 P40,000
Other conversion costs P 8,000 P24,000

Required:
Prepare a production cost worksheet using weighted-average for the cutting department and FIFO for the finishing department.
Process Costing MASaya
9. Pag-asa Corporation assembles products from component parts. It has two departments that process all products. During August, the beginning work in process
in the assembly department was half complete as to conversion and complete as to direct materials. The beginning inventory included P120,000 for materials and
P40,000 for conversion costs. Overhead is applied at the rate of 50% of direct manufacturing labor costs. Ending work-in-process inventory in the assembly
department was 40% complete. All spoilage is considered normal and is detected at the end of the process.

Beginning work in process in the finishing department was 75% complete as to conversion and ending work in process was 25% converted. Direct materials are
added at the end of the process. Beginning inventories included P160,000 for transferred-in costs and P100,000 for direct manufacturing labor costs. Overhead in
this department is equal to direct manufacturing labor costs. Additional information about the two departments follows:

Assembly Finishing
Beginning work-in-process units 20,000 24,000
Units started this period 40,000 ?
Units transferred this period 50,000 54,000
Ending work-in-process units 8,000 20,000
Material costs added P44,000 P28,000
Direct manufacturing labor P16,000 P24,000

Required:
Prepare a production cost worksheet using weighted-average for the assembly department and FIFO for the finishing department.

10. The Tiwi Company manufactures pottery products. All direct materials are included at the inception of the production process. For September, there was no
beginning inventory in the processing plant. Direct materials totaled P310,000 for the month. Work-in-process records revealed that 5,000 tons were started in
September and that 3,000 tons were finished; 1,000 tons were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs.
Spoilage is not detected until the process is complete.

Required:
A. What is the cost per equivalent unit if spoiled units are recognized or ignored?
B. What are the costs assigned to completed units when spoilage units are recognized or when they are not recognized?
C. What are the costs transferred out if spoilage units are recognized or ignored?
D. What are the amounts allocated to the work-in-process ending inventory when spoilage units are recognized or ignored?