Process costing

 UTAF Units to account for (Beginning + Addition)

 UAF Units accounted for
 EUP Equivalents units of production
 TCAF Cost to account for, Cost of UTAF

Problem 1: Compute for Equivalent production, for allocation purposes

Units completed During Units in Process Stage of

the month End of the Month Completion
1) 8,000.00 2,000.00 50%
Answer 8000 x 100% = 8000 -
2000 x 50% = 1000
10,000.00 9,000.00

2) 21,000.00 4,000.00 75%

Answer 21,000 x 100% 21,000.00
4000 x 75% 3,000.00
25,000.00 24,000.00

3) 6,000.00 1,000.00 75%

500.00 40%
Answer 6000 x 100% 6,000.00
1000 x 75% 750.00
500 x 40% 200.00
7,500.00 6,950.00

4) 18,000.00 5,000.00 50%

4,000.00 75%
Answer 18,000 x 100% 18,000.00
5000 x 50% 2,500.00
4000 x 75% 3,000.00
27,000.00 23,500.00

5) 32,000.00 1,500.00 20%

4,000.00 75%
Answer 32,000 x 100% 32,000.00
1500 x 20% 300.00
4000 x 75% 3,000.00
37,500.00 35,300.00
Problem 2: Compute for equivalent production and unit cost for each element of cost

 No beginning work in process inventory

 9000 units completed and transferred and 2000 units are in process at end of the month, 75% completed
Costs for the month
 Materials P15,750 9000 x 100% 9,000.00
 Labor P40,950 2000 x 75% 1,500.00
 Overhead P25,200 11,000.00 10,500.00 EUP
Unit cost or
Costs/EUP Cost per EUP
Materials 15,750/10,500 1.50
Labor 40,950/10,500 3.90
Overhead 25,200/10,500 2.40

Problem 3: Compute for Equivalent Production

1) Started In process  5000 units Completed4000 units In process1000 units (75% complete)
- All materials are added at the beginning of the process

Beginning - Transferred Out 4,000.00

Started 5,000.00 End in process 1,000.00
5,000.00 5,000.00

Materials Completion Conversion Cost (DL + FO)

Transferred Out 4,000.00 100% 4,000.00 100% 4,000.00
End in process 1,000.00 100% 1,000.00 75% 750.00
5,000.00 4,750.00
--> Beginning, all materials are in

2) Received from preceding department 50,000 units Completed44,000 units

In process6000 units (25% complete)
- All materials are added at the end of the process

Beginning - Transferred Out 44,000.00

Transferred In 50,000.00 End in process 6,000.00
50,000.00 50,000.00

Transferred In Materials Completion Conversion Cost (DL + FO)

Transferred Out 44,000.00 44,000.00 100% 44,000.00 100% 44,000.00
End in process 6,000.00 6,000.00 0% - 25% 1,500.00
50,000.00 44,000.00 45,500.00
--> No materials of not complete
--> There are materials from those that came from preceeding department
 3) Started In process  35,000 units Completed29,000 units
In process  3000 units (33% completed) 3000 units (50% completed)
- 75% materials are added at the beginning of the process and 25% when process is half complete

Beginning - Transferred Out 29,000.00

Transferred In 35,000.00 End in process 3,000.00
35,000.00 3,000.00
35,000.00

Materials Completion Conversion Cost (DL + FO)

Transferred Out 29,000.00 100% 29,000.00 100% 29,000.00
End in process 3,000.00 75% 2,250.00 33% 1,000.00
3,000.00 100% 3,000.00 50% 1,500.00
31,250.00 31,500.00
--> Automatic 75% materials then 25% when 50% complete

Problem 4: Compute for

1) Equivalent production
2) Cost of units completed and transferred and in process at end of the month

Units Costs
Started In Process 12,000.00 Materials 72,000.00
Completed and Transferred 10,500.00 Labor 88,800.00
Work in process at end of month (40% complete) 1,500.00 Overheads 44,400.00
133,200.00

- 50% of materials are added at beginning and the rest are added when complete

Beginning - Transferred Out 10,500.00

Transferred In 12,000.00 Ending 1,500.00
12,000.00 12,000.00

Materials, 50% Conversion Cost, 40%

Transferred Out 10,500.00 10,500.00 10,500.00
Ending 1,500.00 750.00 600.00
EUP 12,000.00 11,250.00 11,100.00
TOTAL
Costs 72,000.00 133,200.00 205,200.00
Costs/EUP 6.40 12.00

Costs of:
Transferred Out 6.40 x 10,500 193,200.00
12 x 10,500
Ending in process 6.40 x 750 12,000.00
12 x 600
205,200.00 (must be equal to total costs)
Problem 5: Company uses 2 departments to produce a product

 Department 1 - all materials are added at the beginning of the process

 Department 2 - 50% of the materials are added at the beginning and the rest are added at the end
 Make a Cost of Production Report Units Department 1 Department 2
Started 60,000.00
Completed and Transferred 40,000.00 30,000.00
In process at the end 20,000.00 10,000.00
Stage of Completion 75% 80%
Costs
Materials 480,000.00 245,000.00
Labor 330,000.00 190,000.00
Overhead 220,000.00 114,000.00
550,000.00 304,000.00

Department 1
Beginning - Transferred Out 40,000.00
Transferred In 60,000.00 Ending 20,000.00
60,000.00 60,000.00
Materials Conversion Cost, 75%
Transferred Out 40,000.00 40,000.00 40,000.00
Ending 20,000.00 20,000.00 15,000.00
EUP 60,000.00 60,000.00 55,000.00
TOTAL
Costs 480,000.00 550,000.00 1,030,000.00
Costs/EUP 8.00 10.00

Costs of:
Transferred Out 8 x 40,000 720,000.00
10 x 40,000
Ending in process 8 x 20,000 310,000.00
10 x 15,000
1,030,000.00 (must be equal to total costs)

Department 2
Beginning - Transferred Out 30,000.00
Transferred In 40,000.00 Ending 10,000.00
40,000.00 40,000.00
Transferred In Materials,50% Conversion Cost, 80%
Transferred Out 30,000.00 30,000.00 30,000.00 30,000.00
Ending 10,000.00 10,000.00 5,000.00 8,000.00
EUP 40,000.00 40,000.00 35,000.00 38,000.00
TOTAL
Costs 720,000.00 245,000.00 304,000.00 1,269,000.00
Costs/EUP 18.00 7.00 8.00

Costs of:
Transferred Out (18+7+8) x 30,000 990,000.00

Ending in process 18 x 10k 279,000.00

7 x 5k
8 x 8k
1,269,000.00 TCAF
Problem 6: Compute for Equivalent Production, Unit and Total Cost

Corp manufactures chocolate covered strawberry with 2 departments. Processing and Packaging

 First step is to add strawberry

 Conversion costs are incurred evenly throughout the process
 Last step before going to packaging is to cover them with chocolate
 So chocolate is not added until they are complete

For the Month

 90,000 units completed and transferred and 10,000 units remain in process (70% completed)

Costs

 Strawberry P180,000
 Chocolate P135,000
 Conversion Costs P116,400

Processing Dept
Beginning - Transferred Out 90,000.00
Started In 100,000.00 Ending 10,000.00
100,000.00 100,000.00
Starwberry Chocolate Conversion Cost, 70%
Transferred Out 90,000.00 90,000.00 90,000.00 90,000.00
Ending 10,000.00 10,000.00 7,000.00
EUP 100,000.00 100,000.00 90,000.00 97,000.00
TOTAL
Costs 180,000.00 135,000.00 116,400.00 431,400.00
Costs/EUP 1.80 1.50 1.20

Costs of:
Transferred Out (1.8+1.5+1.2) x 90K 405,000.00

Ending in process 10k x 1.8 26,400.00

7k x 1.2

431,400.00 TCAF
Problem 7

Company has continuous process in 2 departments. Materials are added at the beginning, Data from Department B:

Production Data Cost Data

Received from Department A 80,000.00 560,000.00 Received from Department A
Completed and Transferred 60,000.00 175,000.00 Materials
In process (50% complete) 10,000.00 121,875.00 Labor
Lost 10,000.00 243,750.00 Overhead
365,625.00 Conversion Cost

Total Units to account for Total Units accounted for

Beginning - Completed and transferred out 60,000.00
Transferred In 80,000.00 End in process 10,000.00
80,000.00 Loss 10,000.00
80,000.00

1) Normal lost units discovered at the beginning

Transferred In Materials Conversion Cost

Completed and Transferred Out 60,000.00 60,000.00 60,000.00 60,000.00 Units
Ending in process 10,000.00 10,000.00 10,000.00 5,000.00 Units
Loss 10,000.00 None since they found them at beginning
80,000.00 70,000.00 70,000.00 65,000.00
TOTAL
Total Cost to account for 560,000.00 175,000.00 365,625.00 1,100,625.00
Costs/EUP 8.00 2.50 5.63

Costs of
Completed and Transferred Out (Costs/EUP) x Units 967,500.00
(8+2.5+5.63) x 60k

End in process 8 x 10000 80,000.00

2.50 x 10000 25,000.00
5.63 x 5000 28,125.00 TOTAL
133,125.00 1,100,625.00
 2) Normal Lost units discovered at the end
- Lost units now have materials and conversion since they were discovered at the end

Transferred In Materials Conversion Cost

Completed and Transferred Out 60,000.00 60,000.00 60,000.00 60,000.00 Units
Ending in process 10,000.00 10,000.00 10,000.00 5,000.00 Units
Loss 10,000.00 10,000.00 10,000.00 10,000.00
80,000.00 80,000.00 80,000.00 75,000.00
TOTAL
Total Cost to account for 560,000.00 175,000.00 365,625.00 1,100,625.00
Costs/EUP 7.00 2.19 4.88

Costs of (Costs/EUP) x Units End in process 70,000.00

Completed and Transferred Out 843,750.00 21,875.00
Normal Loss Units 70,000.00 24,375.00
21,875.00 116,250.00
48,750.00 TOTAL
984,375.00 1,100,625.00
Normal loss units are with completed

3) Abnormal lost units discovered when 60% completed

- Abnormal losses are expensed outright

Transferred In Materials Conversion Cost

Completed and Transferred Out 60,000.00 60,000.00 60,000.00 60,000.00 Units
Ending in process 10,000.00 10,000.00 10,000.00 5,000.00 Units
Loss 10,000.00 10,000.00 10,000.00 6,000.00 (60% comp)
80,000.00 80,000.00 80,000.00 71,000.00
TOTAL
Total Cost to account for 560,000.00 175,000.00 365,625.00 1,100,625.00
Costs/EUP 7.00 2.19 5.15

Costs of (Costs/EUP) x Units End in process 70,000.00

Completed and Transferred Out 860,228.87 21,875.00
25,748.24
117,623.24
Abnormal Loss Units 70,000.00 TOTAL
(EXPENSED) 21,875.00 1,100,625.00
30,897.89
122,772.89
 4) Abnormal loss units discovered at end
 Estimated value of spoiled units are P12 each

Transferred In Materials Conversion Cost

Completed and Transferred Out 60,000.00 60,000.00 60,000.00 60,000.00 Units
Ending in process 10,000.00 10,000.00 10,000.00 5,000.00 Units
Loss 10,000.00 10,000.00 10,000.00 10,000.00 Units
80,000.00 80,000.00 80,000.00 75,000.00
TOTAL
Total Cost to account for 560,000.00 175,000.00 365,625.00 1,100,625.00
Costs/EUP 7.00 2.19 4.88

Costs of (Costs/EUP) x Units End in process 70,000.00

Completed and Transferred Out 843,750.00 21,875.00
(To Finished Goods) 24,375.00
116,250.00
Abnormal Loss Units (-12)
(EXPENSED), ((7.00+2.19+4.88) -12 ) x 10,000 20,625.00 TOTAL
1,100,625.00
Spoiled Inventory, Inventory Account
(10,000 x 12) 120,000.00

Problem 8

 Normal Spoilage is 5% of output

 Materials are added and Inspection for spoilage are done at the end of the process
 Department 2 received 28,000 units from Department 1 at a cost of P280,000
 Costs for Department 2: Materials (P24,000), Conversion Cost (P180,000)
 Transferred Out (16,000 units) End in process (10,000 units) (60%complete)
 Make a cost of production report for Department 2

Total Units to account for Total Units accounted for

Beginning - Completed and transferred out 16,000.00
Transferred In 28,000.00 End in process 10,000.00
28,000.00 Normal Loss (16k x 5%) 800.00
Abnormal Loss 1,200.00
28,000.00

Transferred In Materials Conversion Cost

Completed and Transferred Out 16,000.00 16,000.00 16,000.00 16,000.00 Units
Ending in process 10,000.00 10,000.00 6,000.00 Units
Normal Loss 800.00 800.00 800.00 Units
Abnormal Loss 1,200.00 1,200.00 1,200.00 Units
28,000.00 28,000.00 16,000.00 24,000.00
TOTAL
Total Cost to account for 280,000.00 24,000.00 180,000.00 484,000.00
Costs/EUP 10.00 1.50 7.50

- No materials for loss units since inspection is done before they are added
 Costs of (Costs/EUP) x Units
Completed and Transferred Out 304,000.00
Normal Loss 14,000.00
(To Finished Goods) 318,000.00

Abnormal Loss Units (EXPENSED) 21,000.00

End in process 145,000.00

TOTAL 484,000.00

Problem 9

Materials are added in each department, increasing the number of units manufactured.

Department 1: 60,000 units were put into production which includes 15,000 normal loss units. 36,000 were completed and
transferred to Department 2. For End in process, all materials have been added and 33% of conversion cost is applied

Department 2: 9000 units were purchased and added to the units received from Department 1. 39,000 units were
completed and transferred. For End in process, all materials have been added and 40% of conversion cost is applied

COSTS Department 1 Department 2

Materials 180,000.00 135,000.00
Labor 78,000.00 82,800.00
Overhead 15,600.00 41,400.00
93,600.00 124,200.00

 Compute for Equivalent Production for both departments

 Unit Cost and Cost of Units completed and in process for both departments

Department 1 Total Units to account for Total Units accounted for

Beginning - Completed and transferred out 36,000.00
Transferred In 60,000.00 End in process 9,000.00
60,000.00 Normal Loss 15,000.00
60,000.00

Department 1 Materials Conversion Cost

Completed and Transferred Out 36,000.00 36,000.00 36,000.00 Units
Ending in process 9,000.00 9,000.00 3,000.00 Units
Normal Loss 15,000.00 They knew the normal number so none Units
60,000.00 45,000.00 39,000.00
TOTAL
Total Cost to account for 180,000.00 93,600.00 273,600.00
Costs/EUP 4.00 2.40

Costs of (Costs/EUP) x Units

Completed and Transferred Out 230,400.00
(To Finished Goods)
230,400.00
End in process 43,200.00
TOTAL 273,600.00
 Department 2 Total Units to account for Total Units accounted for
Beginning - Completed and transferred out 39,000.00
Transferred In 36,000.00 End in process 6,000.00
Added 9,000.00 45,000.00
45,000.00

Department 2 Transferred In Materials Conversion Cost

Completed and Transferred Out 39,000.00 39,000.00 39,000.00 39,000.00 Units
Ending in process 6,000.00 6,000.00 6,000.00 2,400.00 Units
45,000.00 45,000.00 41,400.00
TOTAL
Total Cost to account for 230,400.00 135,000.00 124,200.00 489,600.00
Costs/EUP 5.12 3.00 3.00

Costs of (Costs/EUP) x Units

Completed and Transferred Out 433,680.00
(To Finished Goods)
433,680.00
End in process 55,920.00
TOTAL 489,600.00

Problem 10: Company uses Cutting and Finishing department

 Units are inspected at the end of the process

 Spoiled units are transferred to Spoiled Goods Inventory (Salvage value P15)
 5000 units are transferred from Cutting to Finishing
 3800 units are transferred from Finishing to Finished Goods
 800 units are still in process (40% complete to materials), (20% complete as to conversion)

COSTS Finishing Department

Materials 22,600.00
Transferred In 60,000.00
Labor 17,440.00
Overhead 13,080.00
30,520.00 Prepare cost of production report

Total Units to account for Total Units accounted for

Beginning - Completed and transferred out 3,800.00
Transferred In 5,000.00 End in process 800.00
5,000.00 Normal Loss (remaining) 400.00
5,000.00
 Transferred In Materials Conversion Cost
Completed and Transferred Out 3,800.00 3,800.00 3,800.00 3,800.00 Units
End in process 800.00 800.00 320.00 160.00 Units
Normal Loss 400.00 400.00 400.00 400.00 Units
5,000.00 4,520.00 4,360.00
TOTAL
Total Cost to account for 60,000.00 22,600.00 30,520.00 113,120.00
Costs/EUP 12.00 5.00 7.00

Costs of (Costs/EUP) x Units

Completed and Transferred Out 91,200.00
Normal Loss 9,600.00
(To Finished Goods)
100,800.00
End in process 12,320.00
TOTAL 113,120.00

Problem 11: Compute for equivalent production, costs of units transferred out and in process

Units Transferred in 55,000.00 Units added to production 5,000.00

Units transferred Out 48,000.00 Units in Process 12,000.00 100% Materials
70% Conversion
Costs
Transferred In 24,750.00 Conversion Cost 53,580.00
Direct Materials 7,200.00

Total Units to account for Total Units accounted for

Beginning - Completed and transferred out 48,000.00
Transferred In 60,000.00 End in process 12,000.00
60,000.00 60,000.00

Transferred In Materials Conversion Cost

Transferred Out 48,000.00 48,000.00 48,000.00 48,000.00 Units
End In process 12,000.00 12,000.00 12,000.00 8,400.00 Units
60,000.00 60,000.00 56,400.00 Units
TOTAL
Total Cost to account for 24,750.00 7,200.00 53,580.00 85,530.00
Costs/EUP 0.41 0.12 0.95

Costs (Costs/EUP) x Units

Completed and Transferred Out 71,160.00
End In process 14,370.00
TOTAL 85,530.00
Problem 12

 All materials are added at the beginning

 Product is inspected when it is 80% completed and spoilage is identified at that point
 Normal spoilage is 5% of GOOD OUTPUT (everything that went through inspection, transferred out and in process)
 10,500 units were put into process and 3000 units are still in process (90% complete) and 7000 units completed

Costs
Materials 52,500.00
Labor 39,770.00
Overhead 31,525.00
123,795.00 Compute for the costs of units completed and in process

UTAF UAF Transferred In Material Conversion

Beginning - Completed and Transferred Out 7,000.00 7,000.00 7,000.00 7,000.00
T-In 10,500.00 Ending In process 3,000.00 3,000.00 3,000.00 2,700.00 90%
Normal losses, (7k+3k) x 5% 500.00 500.00 500.00 400.00 80%
EUP 10,500.00 10,500.00 10,500.00 10,100.00
TOTAL
Total costs to account for 52,500.00 71,295.00 123,795.00
Costs/EUP 5.00 7.06

(Costs/EUP) x Units
Completed and Transferred Out 84,412.38
Allocation
To be Allocated CTO EWIP TOTAL
Normal Loss 5 x 500, Materials 2,500.00 7,000.00 3,000.00 Materials 10,000.00
7.06 x 400, Conversion 2,823.56 7,000.00 2,700.00 Conversion 9,700.00

From CTO From EWIP

1,750.00 750.00 Material
2,037.62 785.94 Conversion
3,787.62 1,535.94

Normal losses is composed of items from transferred out and in process so we allocate it

End In process 34,059.06

TOTAL 123,795.00