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Process-Costing-Problems

The document presents a series of problems related to process costing in manufacturing, detailing various scenarios involving work-in-process inventories, equivalent units of production (EUP), and costs for different departments. Each problem requires calculations using FIFO and weighted average methods to determine equivalent units for materials and conversion costs. The problems cover different manufacturing contexts, including plastic cups and sensors, and involve varying degrees of completion for work-in-process inventories.

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Aira Fundador
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10 views

Process-Costing-Problems

The document presents a series of problems related to process costing in manufacturing, detailing various scenarios involving work-in-process inventories, equivalent units of production (EUP), and costs for different departments. Each problem requires calculations using FIFO and weighted average methods to determine equivalent units for materials and conversion costs. The problems cover different manufacturing contexts, including plastic cups and sensors, and involve varying degrees of completion for work-in-process inventories.

Uploaded by

Aira Fundador
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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Problem 1

A company produces plastic drinking cups and uses a process cost system. Cups go through three
departments: mixing, molding and packaging. During the month of June, the following information is
known about the mixing department:
Work in process at June 1 (75%) 10,000 units
Units completed during June 140,000 units
Work in process at June 30 (25%) 20,000 units
Materials are added at two points in the process. Material A is added at the beginning of the process and
Material B at the midpoint of the mixing process. Conversion costs are incurred uniformly throughout the
mixing process. Assuming a FIFO costing flow, the equivalent units for Material A, Material B, and
conversion costs, respectively, for the month of June (assuming no spoilage) are

Problem 2
Ambeth Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining
industry. The following information, pertains to operations for the month of May 2024.
Beginning work-in-process inventory, May 1 16,000
Started in production during May 100,000
Completed production during May 92,000
Ending work-in-process inventory, May 31 24,000
The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The
ending WIP inventory was 90% complete for materials and 40% complete for conversion costs.

Costs pertaining to the month of May are as follows:


(a) Beginning inventory costs are materials, P54,560; direct labor, P20,320; and factory overhead,
P15,240.
(b) Costs incurred during May are materials used, P468,000; direct labor, P182,880; and factory
overhead, P391,160.

1. Using first-in, first-out (FIFO) method, the equivalent units of production (EUP) for materials are
2. Using the FIFO method, the equivalent units of production for conversion costs are
3. Using weighted average method, the equivalent units of production (EUP) for materials are
4. Using the weighted average method, the equivalent units of production for conversion costs are

Problem 3
The Blending Dept. is the first stage in WONDER Co.'s manufacturing cycle, where materials are
introduced at the start of processing. Relevant data for this department for the month of May 2024 are as
follows: opening work in process, 60% done, 400,000 units; placed in process during the month,
600,000 units; and; end-of-the-month work in process, 70% done, 360,000 units. If WONDER Co. uses
the weighted average procedure, what are the equivalent production units, respectively, for materials and
conversion costs?

Problem 4
Department A is the first stage of Davao Company's production cycle. The following information is
available for conversion cost for the month of April:

Work in process, April 1 (40% complete) 40,000


Started in April 320,000
Completed in April, and transferred to
next department 340,000
Work-in-process, April 30 (60% complete) 20,000

Using FIFO method, the equivalent finished units for conversion cost calculations are:

Problem 5
Department A is the first stage of Manila Company's production cycle. The following information is
available for conversion costs for the month of April 2024:
Work in process, beg. (60% complete) 20,000
Started in April 340,000
Completed in April, and transferred to Dept. B 320,000
Work-in-process, ending (40% complete) 40,000

Using FIFO method, the equivalent units for the conversion cost calculation are
Problem 6
Bobson Company had 6,000 units in work-in-process at January 1, 2024, which were 60% complete as
to conversion costs. During January 20,000 units were completed. At January 31, 2024, 8,000 units
remained in work in process which were 40% complete as to conversion costs. Materials are added at
the beginning of the process.

1. Using the weighted average method, the equivalent units for January for conversion cost were:
2. How many units were started during January?

Problem 7
The Sampaguita Corporation, engaged in manufacturing business uses process costing, and gave us
the following production data from three different situations. Stages of completion of inventories apply to
all cost elements.

(1) Started in process, 6,500 units; completed, 5,500 units; in process, end, 400 units 50% completed
and 600 units 25% completed.

(2) Beginning inventory, 6,250 units 40% completed; started in process, 25,000 units; completed, 26,250
units; in process at the end, 3,000 units 50% completed and 2,000 units 25% completed.

(3) Beginning inventory, 6,000 units, 30% completed; started in process, 13,000 units; lost in process,
500 units from production started this period (loss was normal and occurred throughout the production
process); completed, 14,000 units; in process at the end of the period, 3,000 units, 50% completed and
1,500 units, 75% completed.

1. Using the FIFO costing, the equivalent production figures are


2. Using average costing, the equivalent production figure are

Problem 8
Beginning work-in-process has 10,000 units, 80% complete as to materials and 60% complete as to
conversion costs. Ending work-in- process has 15,000 units, 75% complete as to material cost and 50%
complete as to conversion costs. 30,000 units were completed and transferred during the period.

1. What are the equivalent units under FIFO for materials and conversion costs?
2. What are the equivalent units under the weighted average method for material and conversion costs?

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