Anda di halaman 1dari 2


Cost of abnormal lost units

PROBLEM A = ABC CO. Products reports the following data 7. Cost of the units completed and transferred
for the first department in its production process: 8. Cost of the Ending Work in Process
Units in process at beginning of period
(all materials; 3/4 labor and factory PROBLEM D = Miami Corporation manufactures Heat Energy
overhead) 5,000 Drink process using two departments, Mixing Department and
Units started in process 35,000 Refining Department.
Units transferred out 33,000
Units still in process (all materials; In the Mixing Department, material A is added 30% at the
labor and factory overhead) 5,000 start, plus 30% when the products are 50% completed as to
Units completed but not yet transferred labor and the remaining 40% is added only when the products
to Finished Goods. 2,000 are 90% completed as to labor. In this department labor and
Related data were: overhead are incurred evenly throughout the process.
Beginning Cost added
In Refining Department units received from preceding
Materials 100,000 304,000
department will further process, and at 50% completion
Labor 125,400 407,100
Material B is added, which approximately increases the
Factory Overhead 173,500 407,750
production by 50%. The processing in this department
Required: Using the average costing method: Determine the requires the use of two different skills in which applicable
1. Cost of the Work in process ending inventory rates are P1,500 for SKILL X (which is also the required labor
in Mixing department) and P2,000 for SKILL Y per Direct Labor
PROBLEM B = BCD CO. Products is asking help from you to Hour. The processing in the Refining Department will start
complete the cost reports for this department. Below are the the use of Skill Y only after completing the application of Skill
data and the company is aware that the information provided X that is after the addition of materials.
to you might not be sufficient. Overhead is applied at P800 per direct labor hour for the two
Units in process January 1 (all materials; 3/4 departments.
labor and factory overhead) 5,000
Units started in process 35,000 For the month of December the following data were made
Units transferred out 36,000 available:
Units still in process January 31 (all Unit of Production Mixin WD Refinin WD
materials; labor and factory overhead) 4,000 g g
Beginning Units in beginning 20,000 80% 20,000 30%
Materials 100,000 inventory - December
Labor 125,400 1
Factory Overhead 173,500 Units started in process 100,00 ?
Related data were: this period 0
Total cost of beginning inventories Units transferred from
completed and transferred. P 430,150 Mixing to Refining
Total materials requested during the period P 306,250 this period ?
Required: Using the FIFO costing method: Determine the ff: Units transferred from
2. Total cost of completed and transferred Refining to Finished
3. Cost of the Work in process ending inventory Goods this period 150,000
Lost Units (Normal
Problem C = The Mongol Company uses the weighted Loss should not
average costing method in its there processing department. exceed 2% of the
Direct materials are added in Department 1 and Department units started this
2. Direct materials in Department 2 are placed immediately period) 5,000 10,000
on each unit as it is transferred in. Units in Ending 90%
Below is a portion of Octobers cost of production report for inventory December
Department 2. 31 ? 20,000 75%
Work in process inventory ending: 8,900 units
Cost from preceding department 203,000 Mixing Refining
Direct materials 26,700 Cost in beginning inventory
Conversion cost 60%, completed 20,470 Cost from preceding 647,000
During November the following activity occurred in department
Department 2. Materials
Units transferred in 30,100 Materials A P100,000
Units added 3,000 Materials B 0
Cost transferred in 926,800 Labor
Cost incurred Skill X P750,000 90,000
Direct materials 653,700 Skill Y 0
Conversion cost 483,215 Factory overhead ? ?
Units transferred out 37,800 Cost added during the current
Ending work in process inventory 75% period
completed Transferred In Cost ?
Required: Calculate the following unit costs for the month of Materials A P1,200,000
November: Materials B 2,250,000
4. Total cost of Units Transferred out Labor
5. Total cost of Ending Work in Process Skill X 783,750 1,215,000
Skill Y ?
PROBLEM C = The following data pertain to the December,
Factory Overhead ? 1,048,000
2011 production of Department B in a manufacturing
company. Materials are added at 50% completion.
(Subsequent Department)
Using FIFO method and assuming the inspection point for
Quantity Schedule
mixing department is at 70% completion while loss in refining
In process, December 1 (40% completed) 5,000 department are discover before the addition of materials
Units Added 5,000 which is at 50% completion, determined the following for the
Transferred in from preceding department 90,000 two departments:
Lost Units Abnormal (40% completed) 10,000 9. Equivalent production (Materials, Labors and
In process, December 31 (75% completed) 10,000 Overhead)30 points
Cost Data: 10. Total cost of Normal lost units
In process, December 1 60,500 11. Total cost of ending work in process
Manufacturing cost, December: 12. Total cost of units transferred out.
Materials 360,000
Labor 179,000 Problem G = The Wilson Company manufactures the
Factory overhead 179,000 Ticktock watch on a assembly-line basis. January 1 work-in-
Received from preceding department 997,500 process consisted of 5,000 units partially completed. During
Equivalent Units: FIFO Costing the month an additional 110,000 units were started and
105,000 units were completed. The ending work-in-process 20. Total cost of units completed and transferred
was 3/5 complete as to conversion costs. Conversion costs 21. Total cost of units is still in process
are added evenly throughout the process. The following
conversion costs were incurred: Theories:
1. When should process costing techniques be used in
Beginning costs for work-in-process. 1,500 assigning costs to products?
Total current conversion costs 273,920 a. If the product is manufactured on the basis of each
order received
The conversion costs assigned to ending work-in-process b. When production is only partially completed during the
totaled 15,360 using the FIFO method of process costing. accounting period
13. What was the percentage of completion as to c. If the product is composed of mass-produced
conversion costs on the 5,000 units in BWIP? homogeneous units
d. Whenever standard costing technique should not be
Problem L = Information concerning Department B of the used
Loren Company is as follows: 2. Which of the following is a characteristic of a process
Units Costs costing system?
Beginning work in process 5,000 6,300 a. Work-in-process inventory is restated in terms of
Units transferred 35,000 58,000 completed units
Total 40,000 64,300 b. Cost are accumulated by job order
Units completed 37,000 c. It is used by manufacturing custom machinery
Ending work in process 3,000 company.
d. Standard costs are not applicable.
3. From the industries listed below, which one is most
Costs likely to use process costing in accounting for production
Transferre Material Conversio Total cost?
d s n costs a. Road Builder
Beginning 2,900 3,400 6,300 b. Electrical Contractor
work in c. Newspaper Publisher
process d. Automobile Repair Shop
4. An equivalent unit of material or conversion cost is
Units 17,500 25,500 15,000 58,00
equal to
transferred 0
a. The amount of material or conversion cost necessary
to complete one unit of production
20,400 25,500 18,400
b. A unit of work-in-process inventory
c. The amount of material or conversion cost necessary to
Conversion costs were 20% complete as to the beginning
start a unit of production in work-in-process
work in process and 40% complete as to the ending work in
d. Fifty percent of material or conversion cost of a unit of
process. All materials are added at the end of the process.
finished goods inventory (assuming a linear production
Loren uses the weighted-average method.
14. The portion of the total cost of ending work in
5. The percentage of completion of the beginning work-in-
process attributable to transferred in cost is
process inventory should be considered in the
computation of the equivalent units of production for
Problem M = Information for the month of May concerning
which of the following methods of process costing
Department A, the first stage of Leo Corporations production
FIFO Weighted Average
cycle, is as follows:
a Yes No
Materials Conversion
b Yes Yes
c No Yes
Work in process, beginning 4,000 3,000
d. No No
Current costs 20,000 16,000
Total Costs 24,000 19,000
6. The units transferred in from the first department to the
Equivalent units based on
second department should be included in the computation of
weighted-average method 100,000 95,000
the equivalent units for the second department under which
Average unit costs 0.24 0.20
of the following method of process costing?
Goods completed 90,000 units
FIFO Weighted Average
Work in process, end 10,000 units
a Yes Yes
Materials costs are added at the beginning of the process. The
b Yes No
ending work in process is 50% complete as to conversion
c No Yes
costs. How would the total cost account for the distributed,
d. No No
using the weighted-average method?
15. Total cost of Goods Completed. 7. In a given process costing system, the equivalent units of
16. Total cost of Work in Process End production are computed using the weighted average method.
With respect to conversion costs, the percentage of
Problem N = Under FIFO METHOD completion for the current period is included the calculation of
Quantity Actual Materials Labor Overhead the
Schedule Units WD EUP WD EUP WD EUP Beginning Work in Ending Work-in
In process ? ? ? ? Process Inventory Process Inventory
beginning a No No
Started this 14,000 b No Yes
period c Yes No
Total ?
d. Yes Yes
Completed and 8. In a process costing system, how is the unit cost affected in
transferred a production cost report when materials are added in a
In process ? ? ? 75% 1,500 45% ? department subsequent to the first department and the added
beginning materials result in additional units?
Started this ? ? ? ? a. The first department unit cost is increased which
period necessitates an adjustment of the transferred in unit cost
In process end 1,500 ? ? ? ? 20% ? b. The first department unit cost is decreased which
Total ? 14,750 ? necessitates an adjustment of the transferred in unit cost
Materials is added 30% at the start, plus 30% when 50% c. The first department unit cost is increased but it does not
complete as to labor and the remaining 40% is added only necessitates an adjustment of the transferred in unit cost
when the products are 90& completed as to labor. d. The first department unit cost is decreased but it does not
necessitates an adjustment of the transferred in unit cost
Assuming the IP beg cost is P5,000, current cost per units for
Materials is P5.50, Labor is P8.25, and overhead is P6.25. Notes:
a. If the problem does not specify the inspection point, it is
Determine the following: assumed that the loss discovered at the beginning
17. EUP Materials b. If the problem does not specify if it is normal loss or
18. EUP Materials of In Process - Ending abnormal loss, it should be consider as normal loss.
19. EUP Overhead