New Era University

College of Accountancy
COST ACCOUNTING
Process Costing Answers and Solutions
1. C. Dr. Work in Process--Department C, 468,000; Cr. Work in Process--Department B, 468,000
Beginning work in process Department A
Add total manufacturing costs1 Department A
Less ending work in process Department A
Transferred-out to Department B
Add beginning work in process Department B
Add total manufacturing costs1 Department B
Less ending work in process Department B
Transferred-out to Department C

P 60,000
300,000
- 48,000
P312,000
60,000
144,000
- 48,000
P468,000

Direct materials + direct labor + applied factory overhead

2. A. was 40% complete with respect to conversion costs.

Step 1: Compute for the units in ending work in process:
Units in beginning work in process
Add units started
Units to account for
Less units completed and transferred out
Units in ending work in process

15,000 units
105,000
120,000 units
- 100,000
20,000 units

Step 2: Compute for the EUP in ending work in process:

Units completed and transferred out
Add EUP in ending inventory (SQUEEZE)
Total weighted-average EUP

100,000 units
8,000
108,000 units

Step 3: Determine the percentage of completion of units in ending work in process:

EUP in ending inventory
8,000 units
Divide by units in ending work in process
20,000
Percentage of completion of units in ending work in process
40 %
3. C. 46,000 units.
Units in beginning work in process
Add units started (SQUEEZE)
Units to account for
Less units completed and transferred out
Units in ending work in process

16,000 units
46,000
62,000 units
- 50,000
12,000 units

4. D. 247,000
Step 1: Compute for the units manufactured/completed:
Units manufactured (SQUEEZE)
Add beginning finished goods inventory
Units available for sale
Less ending finished goods inventory
Units sold

235,000 units
75,000
310,000 units
- 60,000
250,000 units

Step 2: Compute for the total weighted-average EUP:

Units completed
Add EUP in ending work in process (16,000 x 75%)
Total weighted-average EUP

235,000 units
12,000
247,000 units

5. D. 46,870
Units completed (SQUEEZE)
Add EUP in ending work in process (4,800 x 60%)
Total weighted-average EUP

46,870 units
2,880
49,750 units

6. A. 17,000
Step 1: Compute for the EUP to complete beginning work in process:
EUP to complete beginning work in process (SQUEEZE)
6,800 units
Units started and completed
50,000
EUP in ending work in process (24,000 x 30%)
7,200
Total FIFO EUP
64,000 units
Step 2: Compute for the units in beginning work in process:
EUP to complete beginning work in process
Divide by percentage to complete (100% 60%)
Units in beginning work in process

6,800 units
40 %
17,000 units

7. D. 10,000; 60%
Weighted-average EUP for direct material
Less FIFO EUP for direct material
EUP in beginning inventory for direct material

40,000 units
- 30,000
10,000 units

Since all materials are added at the beginning of processing, the EUP in beginning inventory for
direct material represents the number of units. The percentage of completion for the direct labor
component is computed as follows:
Weighted-average EUP for direct labor
Less FIFO EUP for direct labor
EUP in beginning inventory for direct labor
Divide by units in beginning inventory
Units sold

38,000
- 32,000
6,000
10,000
60

units
units
units
%

8. 76,800
Step 1: Compute for the units in beginning work in process:
Units in beginning work in process (SQUEEZE)
Add units started
Units to account for
Less units completed and transferred out
Units in ending work in process

27,000 units
75,000
102,000 units
- 87,000
15,000 units

Step 2: Compute for the EUP to complete beginning work in process:

Units in beginning work in process
27,000 units
Multiply by percentage to complete (100% 60%)
x 40 %
EUP to complete beginning work in process
10,800 units
Step 3: Compute the total FIFO EUP for conversion costs:
EUP to complete beginning work in process
Units started and completed (75,000 15,000)
EUP in ending work in process (15,000 x 40%)
Total FIFO EUP for conversion costs

10,800 units
60,000
6,000
76,800 units

9. C. 3,580 and 3,255, respectively

Units in beginning work in process
Add units started
Units to account for
Less units in ending work in process
Units completed

980 units
2,600
3,580 units
- 650
2,930 units

Units completed
Add EUP in ending inventory:
Material A: 650 x 100%
Material B: 650 x 50%
Conversion: 650 x 80%
Total weighted-average EUP

Material A
2,930

Material B
2,930

Conversion
2,930

325
_____
3,255

520
3,450

650
_____
3,580

10. A. P30.07
Beginning inventory costs conversion
Current period costs conversion
Total costs to account for conversion
Divide by weighted-average EUP (see no. 9)
Average cost per EUP conversion

P 5,640
98,100
P103,740
3,450 units
P 30.07 per unit

11. C. P2.04
Beginning inventory cost material
Current period cost material
Total cost to account for material
Divide by weighted-average EUP for material2
Weighted-average cost per EUP material

P 8,000
28,700
P36,700
18,000 units
P 2.04 per unit

Computation: 15,000 + (3,000 x 100%)

12. B. P300,000
Materials (P50 x 7,500 x 0%)
Conversion cost [(P20 + P30) x 7,500 x 80%]
Cost of ending work-in-process inventory

P
0
300,000
P300,000

13. C. P15,000
Step 1: Compute for the EUP:
Materials
21,600

Conversion
21,600

2,400
________
24,000

720
22,320

Materials
P 96,000
24,000
P 4.00

Conversion
P167,400
22,320
P 7.50

Step 3: Assign cost to ending work-in-process inventory:

Materials
Cost per EUP
P 4.00
Multiply by EUP in ending inventory
x 2,400
Cost in ending inventory
P 9,600

Conversion
P 7.50
x 720
P 5,400

Units completed
Add EUP in ending inventory:
2,400 x 100%
2,400 x 30%
Total EUP
Step 2: Compute for the cost per EUP:
Total costs
Divide by EUP
Cost per EUP

P9,600 + P5,400 = P15,000

14. B. P1,977,210
Cost of incomplete beginning inventory
Cost to complete beginning inventory3
Cost of completed beginning inventory

P1,026,810
950,400
P1,977,210

Computation of cost to complete beginning inventory:

Direct material [P30 x (54,000 54,000)]
Packaging [P4 x (54,000 0)]
Direct labor [P12 x (54,000 16,200)]
Manufacturing overhead [P8 x (54,000 18,900)]
Total

P
0
216,000
453,600
280,800
P950,400

15. D. P17,604,000
Total unit cost (P30 + P4 + P12 + P8)
Multiply by units started and completed (380,000 54,000)
Cost of units started and completed

54 per unit
x 326,000 units
P17,604,000

16. B. P456,000
Direct material (P30 x 12,000 x 100%)
Packaging (P4 x 12,000 x 0%)
Direct labor (P12 x 12,000 x 30%)
Manufacturing overhead (P8 x 12,000 x 55%)
Cost of ending inventory

P360,000
0
43,200
52,800
P456,000

17. D. 70,000 units

EUP to complete beg. inventory (15,000 x 0%)
Units started and completed (85,000 15,000)
EUP in ending inventory (10,000 x 0%)
EUP for direct materials

0 units
70,000
0
70,000 units

Note: The beginning inventory was 100% complete as to direct materials because the units have
already passed the 25% stage of completion. Hence, the EUP to complete these units is zero. On
the other hand, the ending inventory was 0% complete as to direct materials because the units
have not yet reached the 25% stage of completion.
18. C. P55,300
Step 1: Compute for the EUP:
Units completed
Add EUP in ending inventory:
3,000 x 100%
3,000 x 50%
Total EUP

Materials
7,000

Conversion
7,000

3,000
________
10,000

1,500
8,500

Materials
P 27,000
10,000
P 2.70

Conversion
P 44,200
8,500
P 5.20

Step 2: Compute for the cost per EUP:

Total costs
Divide by EUP
Cost per EUP
Step 3: Assign cost to units transferred out:
(P2.70 + P5.20) x 7,000 = P55,300
19. A. P23.29
Beginning inventory cost materials
Current period cost materials
Total cost to account for materials
Divide by weighted-average EUP for materials4
Weighted-average cost per EUP materials
4

Computation: 6,200 + [(400 + 6,800 6,200) x 85%)]

P 5,500
158,700
P164,200
7,050 units
P 23.29 per unit

20. D. P109,810
Step 1: Compute for the weighted-average EUP:
Transferred-in
Units completed (B + S E)
79,000
Add EUP in ending inventory:
Transferred-in: 6,000 x 100%
6,000
Direct material: 6,000 x 0%
Conversion: 6,000 x 80%
__ ___
Total weighted-average EUP
85,000

Direct material
79,000

Conversion
79,000

0
___ __
79,000

4,800
83,800

Direct material
P
0
10,270
P10,270
79,000
P 0.13

Conversion
P 3,598
14,000
P17,598
83,800
P 0.21

Transferred-in
85,000
-5,000
80,000

Direct material
79,000
___ _0
79,000

Conversion
83,800
-1,500
82,300

Step 2: Compute for the cost per EUP:

Transferred-in
Current period costs
P80,000
Divide by EUP
80,000
Cost per EUP
P 1.00

Direct material
P10,270
79,000
P 0.13

Conversion
P14,000
82,300
P 0.17

Step 2: Compute for the cost per EUP:

Transferred-in
Cost in beg. inventory
P 9,250
Current period costs
80,000
Total costs
P89,250
Divide by EUP
85,000
Cost per EUP
P 1.05
Step 3: Assign costs to units completed:
(P1.05 + P0.13 + P0.21) x 79,000 = P109,810
21. A. P6,816.52
Step 1: Compute for the FIFO EUP:
Weighted-average EUP
Less EUP in beg. inventory
FIFO EUP

Step 3: Assign costs to units in ending inventory:

Transferred-in: P1.00 x 6,000 x 100%
Direct material: P0.13 x 6,000 x 0%
Conversion: P0.17 x 6,000 x 80%
Cost of ending inventory

P6,000.00
0.00
816.52
P6,816.52

22. B. P157,000
Cost in beg. inventory
Cost to complete beg. inventory (2,500 x 20% x P4.10)
Cost of units started and completed [(38,500 2,500) x P4.10]
Conversion cost assigned to units completed

P 7,350
2,050
147,600
P157,000

23. A. 5,400 units

EUP to complete beg. inventory (500 x 20%)
Units started and completed (5,100 500)
EUP in ending inventory (1,400 x 50%)
EUP for materials

100 units
4,600
700
5,400 units

24. C. P14.95
Step 1: Compute for the FIFO EUP for conversion costs:
EUP to complete beg. inventory (500 x 55%)
Units started and completed (5,100 500)
EUP in ending inventory (1,400 x 45%)
FIFO EUP for conversion costs
5

275 units
4,600
630
5,505 units

Step 2: Compute for the FIFO cost per EUP:

Conversion costs added during the month
Divide by EUP for conversion costs
FIFO unit cost for conversion costs

P82,300
5,505 units
P 14.95 per unit

25. A. P240,555
Labor cost
Applied factory overhead (P41,280 x 112.5%)
Conversion cost
Divide by EUP for conversion [59,250 + (15,750 x 1/3)]
Unit cost for conversion
Unit cost for transferred-in
Total unit cost
Multiply by number of units transferred out
Cost of finished goods transferred out

P 41,280
46,440
P 87,720
64,500
P 1.36
2.70
P 4.06
x 59,250
P240,555

units
per unit
per unit
units

26. C. P203,000
Cost in beg. inventory
Cost to complete beg. inventory (10,000 x 40% x P4.50)
Cost of completed beg. inventory
Cost of units started and completed [18,000 x (P3.10 + P4.50)]
Cost of units completed and transferred out

P 48,200
18,000
P 66,200
136,800
P203,000

27. D. P72,916.33
Step 1: Compute for the FIFO EUP:
Material
EUP to complete beg. inventory
Material: 7,500 x (100% 100%)
Conversion: 7,500 x (100% 40%)
Units started and completed
Normal spoilage (1,100 x 100%)
Abnormal spoilage (900 x 100%)
Add EUP in ending inventory:
Material: 16,200 x 100%
Conversion: 16,200 x 70%
Total FIFO EUP

Conversion
0

65,800
1,100
900

4,500
65,800
1,100
900

16,200
________
84,000

11,340
83,640

Material
P125,000
84,000
P 1.4881

Conversion
P360,000
83,640
P 4.3042

Step 2: Compute for the FIFO cost per EUP:

Current costs
Divide by FIFO EUP
FIFO cost per EUP

Step 3: Assign cost to units in ending inventory:

Material: P1.4881 x 16,200 x 100%
Conversion: P4.3042 x 16,200 x 70%
Cost of ending inventory

P24,107.14
48,809.18
P72,916.33

Note: Both normal and abnormal spoilage should be included in the computation of EUP. The
spoiled units were 100% complete as to both material and conversion because the inspection
point is at the end of the process.
28. A. P6,373.60 assigned to units transferred out

Step 1: Compute for the weighted-average EUP:

Material
Units transferred out
73,300
Normal spoilage (1,100 x 100%)
1,100
Abnormal spoilage (900 x 100%)
900
Add EUP in ending inventory:
Material: 16,200 x 100%
16,200
Conversion: 16,200 x 70%
________
Total weighted-average EUP
91,500
Step 2: Compute for the weighted-average cost per EUP:
Material
Beginning WIP costs
P 10,400
Current costs
125,000
Total costs to account for
P135,400
Divide by weighted-average EUP
91,500
Weighted-average cost per EUP
P 1.4798
Step 3: Assign cost to normal spoilage:
Material: P1.4798 x 1,100 x 100%
Conversion: P4.3144 x 1,100 x 100%
Cost assigned to normal spoilage

Conversion
73,300
1,100
900
11,340
86,640
Conversion
P 13,800
360,000
P373,800
86,640
P 4.3144
P1,627.76
4,745.84
P6,373.60

Note: The normal spoilage should be assigned to units transferred out only because the
inspection point is at the end of the process.
29. B. P431,087.43
Cost of good units [(P1.4798 + P4.3144) x 73,300]
Cost assigned to normal spoilage (see no. 28)
Cost assigned to units transferred out

P424,713.83
6,373.60
P431,087.43

30. B. 14,502 units; 8,098 units

Units completed and passing inspection
Units failing final inspection
Total units inspected
Multiply by normal spoilage rate
Units assigned to normal spoilage

460,800
22,600
483,400
x3
14,502

Units assigned to abnormal spoilage: 22,600 14,502 = 8,098 units

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