CHAPTER 8 PROCESS COSTING: COST OF PRODUCTHON REPORT 137

productlon report. Brooks, Inc., uses process costing. The costs for Department 2for
4, Cost of
Aprll wer0: $2O,000
Cost from preceding department.
Cost edded by department:
Materlals. $21,816
7,778
Labor 4,104 33,898
Factory overhead.
department's quantity schedule:
The following information was obtained from the S,000
Units recelved.....
Units transferred out 4,000
Units stll in proCESs 1,000
was:
of completion of the work in process as to costs ariginating in Department 2
The degree 20% com-
20% Were 30% Comphete; and he b¡lance were
units were 40% comptete;
50% of the
plete. report for Department 2 for
April.
Required: The cost of production
from Department A at a
production. During April, 20,000 units were transferred in in Department
6 Equlvalent
Cost of $6,500 and conversion cost of $9,000 were added conversion
cnstof $39.000. MateriaBs 5,000,units of work in process 60% compBete as to
had
AOn April 30, Department B beginningof the process in Department B.
costs.Matrials are added in the
Requlred: computations.
(1) Equivalent production unit for conversion costs. (AICPA adapted)
(2) The cost per equivalent
Assembly Department
transferred out; abnormal loss. During February, tha in the
6. Costingof unts Cutting Department at a unit cost of $3.54), Costs added$56,500.
received 60.000_ units from the $41,650; labor, $101,700; and factory
overhead,
Assembly Department were: materials, transterred out; 9,000
inventory. OIthe 601cot units receved 50,000 were units were 2
There was no beginning (all materials, converted)} 1,000 lost
of the month COnstdered abnormat and is To be,
units were in process at the end
conversion costs The Bnre TossTS
complete as to materials and
charged to factory overh ead.
Required: Cost of production report.
abnormal spollage. The Sterling Company uses process
normal Rd process. Materi
T. Gost of produotionreport; costs are incurred uniformly throughout the expected to be
cOSting. In Department B, conversion
end of the process, followihg Ingpection. Normal spoilage is
a$ are added at the
5% of good output. January:
The following information related to Department Bfor UNITS DoLLARS
12,000 $B4,000
Recelved from Department A. 9,000
Transtertad to finished goods. 2,000
Ending inveotory (70% comptete)....
Cost incurred: 18,090
Materiais... 45,600
Labor and factory overhead
Bequired: Cost df production report for Department B.
O productlonreport; norma and abn orat
nted nta The Curtis materieks.
u
Comperyeterial Ais.
Cess costing in accounting for its production department whioh uses twoMaterial B 0s hen added
added at the beginning of the process and is inspected at the 90% stage;
ne good units. Normal spoiiage units amount to 5% of good output.
 138
COST INFORMATION SYSTEM: ACCUMULATION PROCEDURES
PART 2
Company records contein the following informatlon for January:
Started during the perlod. 10,000 unlts
Material A.:. $13,370
Material B. $ 4,500
Direct labor cost. $37,580
Factory overhead $46,975
Transferred to finished good... 7,000 units
Ending inventory (95% complete, Including Material B). 2,000 units
Required: Cost of production report.
9. Cost of production report: spolied units -normal and abnormal. Hettinger, Inc., uses proca
costing in its two producing departments. In Department 2, inspection takes place at the o
stage of completion, after which materials are added to good units. A spoilage rate of 3% of
output is considered normal. good
Department 2 records for April show:
Received from Department 1 30,000units
Cost $135.000
Materials $ 12,500
Conversion cost..... $139,340
Transferred to finished goods 25,000 units
Endingwork in process inverntory (50% complete) 4,200 units
Required: Cost of production report.
10. Computation of equlvalent productlon.
for the costs of its only product, Product D. Pietra-Gonatas, Inc., uses process costing to account
tion, Assembly, and Packaging. Productlon takes place in three departments: Fabrica
At the end of the fiscal year, June 30,the
following inventory of Product D is on hand:
(a) No unused raw materials or
(b) Fabrication Department: 300packaglng
unita, ½
materlals.
direct iabor. complete as tO raw materiais and ½ complete as to
(o) Asssmbly
(d) PackaglngDepartment: 1,000 unlts, complete as to direct labor.
Department: 100 unlts, %
ag to direct labor. complete as to paokaging materlals and completo
(o)
Shipping or tlnlshed goods area: 400 unlts.
Required:
(1) The number of
(2) The number of equlvalent
@qulvalent
unlts of raw materlals in all
unlte of the Fabrication inventorles direct
at June 30.
rle_ at June 30.
(3) Thenumber of equivalent units of
Department's labor in ali Invente"
packaging materlals in all Inventoriss at June 30.
(AICPAadapted)

PROBLEMS
Round off all amounts to thres
6-1. Cost of decimal places.
materlais are productlon
added at thereport; normal spoilage.
Malamud Company process oosting.
A
converted, and beginning of the uses
process., The product is Inspected when Itls 80%
good output. apollage ls identified only at that point.
During March, 10,500 units were Normal spollage is expeoted to be 6%
$39,770for labor; and $31,525 for put into process. Current costs were $52,500 for materlals;
March were estimated to be factory overhead. The 3,000 units stll! In gnd of
transferred to finished goods. 90% complete. All spollage was process at the
normal. Atotal of 7.000 unlts were
Reguired: Acost of productlon report for March.
 PROCESS COSTING: CoST OF PRODUCTION REPORT 139
CHAPTER8

of
of process, all normal. Primakoff, inc., uses pro-
productlon report; spollage at end Materials
2. Cost departments. are added at the end of the process after
COSting In its two producing occurred during the nonth.
c98S lnspection; no abnormal spollage
QUality control 2,500 units were received from Department 1 at a coat of $50,000. Costs
During October, : during October were:
Department
incurredby Materials $ 8,000
Conversion costs ... 36,000

transferred to finished goods inventory.

Atotal of 2.000 units were complete as to conversion costs.
C n units still in process at the end of October were %
for Department 2.
Required: Cost of production report The Gas
Cost of production report; spollage at end of process, both normal and abnormal. information
L The following
Costing in its two producing departments.
eort Company uses process Novenmber.
pertains to Department 2 for and identifi cation of spoilage take place at
the
Normal spoilage is 5% of output; inspection
added after inspection.
And of the process; materialsare units from Department 1 at a cost of $140,000. Department 2
Department 2 received 14,000 conversioni costs.
$90,000 for
costs were $12,000 for materials and and transferred to finished goods. At the end of the
of 8,000 units were completed
total
A
were still in process, estlmated to be 60% complete as to conversion costs.
month.5.000 units
Department 2.
Required: Cost of production report for
equlvelent production scheduies; adjuetment for lost unlts. Biological Labora
H. Quantity and three producing departments. The folowing
torles, Inc., produces an antiblotl c product in Its
avallable:
Quantitatlve and cost data have been made DEPAATMENT
Terminal
Blending Testing
Produotlon data: 5 400 kg 3 200 kg
Started into production. &
000 kg
5400 3 200
Transterred to next department . . . . . . 2 100
Transterred to finlshed goods storeroom.
In proce9s (100% materlals, ½ labor and 2 400 1800
Overh0a0)oeste****
In process (100% materlals, % labor and 900
Overhead)...
Cost charged to departments: $ 7,980 $14,400
Materlals.... $20,670
11,160 5,016 11,520
Labor... 5,580 2,280 5,040
Fsctory overhaad...... $30,980
Total.. $37,410 $15,278

Lost units are normal and apply to all production.

Requlred:
)A quantity schedule for each of the three departments.
An squivalent production schedule for sach of the three departments.
he unit cost of factory overhead in the Blending Department. in from the Biend
8r unit cost in the Testing Department if the unit cost transferred
Ing Department is $5.35.
Company
Equivalent productlon and cost computetions; evaiuation of report. The Moderna Its opera-
lon.mploysDepartrnent
departmental budgetsforand
A's budget pe
performance
January raports
was for the in pianning and controlng
production of 1,000 unlts of equlvalent pro-
ucton, normal month's volume.