Exercise 1-1 (EP under FIFO versus EP under Weighted Average Method)

From the following quantity production reports, draw a horizontal line separating sources from its target
in preparing quantity schedule, then compute the equivalent production (EP) using: 1) First-In, First-Out
(FIFO) method 2) Weighted Average method.

a) Starred in process 208,000 FIFO Weighted Average

Finished and transferred ?
In process, end 1/3 completed 36,000

b) Received from previous department 120,000 FIFO Weighted Average

Finished and transferred 90,000
Finished and on hand ?
In process, end 30% completed 24,000

c) In process, beginning 1/4 completed 36,000 FIFO Weighted Average

5/6 completed 48,000
Started and placed into process ?
Finished and transferred 102,000
WIP,end: 1/3 completed 30,000
1/4 completed 12,000

Exercise 1-2 (Calculation of EP under FIFO)

For each of the following independent cases, compute the Equivalent Production (EP) under FIFO
method:

A) Process I applies all material cost at the start of the process while labor and overhead cost are
charged uniformly.

Production Data May June

Started in process 150,000 120,000
Finished and transferred to Process II 120,000 105,000
In process, at the end of month 30,000 45,000
Stage of completion 4/5 2/5
B) Process II applies all material cost at the end of the process and conversion costs are applied evenly.

Production Data May June

Received from Process I 120,000 105,000
Finished and transferred to Process III 105,000 114,000
In process, end of month 15,000 6,000
Stage of completion 40% 3/5

C) Process III applies all material cost at 60% stage of completion while labor and overhead are
incurred uniformly throughout the process.

Production Data May June

Received from Process II 105,000 114,000
Finished and transferred to Process IV 75,000 90,000
In process, end of month 30,000 54,000
Stage of completion 2/3 1/4

D) Process IV applies material cost as follows: 30% at the start of the process and 70% at the end of the
process. Conversion costs are charged evenly.

Production Data May June

Received from Process III 75,000 90,000
Finished and transferred to storeroom 60,000 75,000
In process, end of month 15,000 30,000
Stage of completion 80% 40%

Exercise 1-3 (Calculation of EP under FIFO)

Determine the EP of each cost element for each department using FIFO method:

Dept. 1 Dept. 2 Dept. 3

Opening inventory 72,000 48,000 20,000
(% of completion) ¼ 2/3 40%
SIP/RPD 36,000 80,000 80,000
Finished & Transferred ? ? 56,000
Finished and on hand 28,000 --- 24,000
In process, end --- ? ?
(% of completion) --- 1/3 80%

NOTE: In Dept. 1, all materials are given at the start of the process.
In Dept. 2, all materials are given at the end of the process.
In Dept. 3, all materials are given at ¾ stage of completion.
In all departments, labor and overhead are incurred uniformly throughout the process.
Exercise 1-4 (Calculation of Unit Cost for each cost element)

Ultima Scents Inc. produces candles and in March 2013, the company’s production is 28800 equivalent
units for direct materials; 26,400 equivalent units for labor and 23,000 equivalent units for overhead.
Production costs incurred in March are as follows:

Direct Materials P80,240

Conversion Costs 120,400

Production Costs incurred last month were: P29,200 for direct materials, P36,200 for labor and P10,800
for overhead.

REQUIRED: Compute the cost per equivalent unit for direct material, labor and overhead for March
using:

a) Weighted Average Method

b) FIFO if Ultima Scents Inc. had 5,200 EUP for direct material in March’s beginning inventory,
7,400 EUP for direct labor, and 4,500 EUP for overhead.

Exercise 1-5 (Calculation of Weighted Average Unit Cost for each cost element)

Hoy Co. uses process costing with a weighted average cost flow assumption on its two (2) producing
departments. On April 1, Department B had no units in beginning inventory. During April, 25,000 units
were transferred from Department A to Department B. On April 30, Department B had 5,000 units of
work in process, 60% complete as to labor and 40% complete as to factory overhead. During the month,
20,000 units were transferred from Department B to Finished Goods Inventory. Materials are added in
the beginning of the process in Department B. The following journal entries summarize April activity.

Work in process – Department A P25,000

Work in process – Department B 16,250
Materials P41,250

Work in process – Department A P10,800

Work in process – Department B 10,350
Payroll P21,250

Work in process – Department A P14,600

Work in process – Department B 16,500
Applied factory overhead P31,100

Work in process – Department B P37,000

Work in process – Department A P37,000

Required: Compute the cost per equivalent unit for each element of cost in Department B.
Exercise 1-6 (Determination of units in process, beginning and their percentage of completion)

Bahini Manufacturing Co. reported the September 2013 production and cost information as follows:

Materials Labor Overhead

EP under weighted ave. 180,000 174,000 144,000
EP under FIFO 148,000 154,800 137,600
Costs incurred last month P54,560 P20,320 P15,240
Current period costs P468,000 P182,880 P391,160

All material is added at the beginning of the process.

REQUIRED: Determine how many units were in beginning inventory and at what percentage of
completion was each cost component?

Exercise 1-7 (Determination of WIP beginning and WIP end)

In February 2019, Targets Corp. computed its costs per equivalent unit under FIFO process costing as
follows:

Raw materials P31.85

Packaging 2.65
Direct labor 6.50
Overhead 9.00

The raw materials are all added at the start of the process. Packaging is added at the end of the
production process immediately before the units are transferred to the warehouse. Beginning inventory
cost was P1,259,250 and consisted of:

*P955,500 raw materials cost for 30,000 EUP

*P87,750 direct labor cost for 13,500 EUP
*P216,000 overhead cost for 24,000 EUP

Targets transferred a total of 200,000 units to finished goods during February, which left 50,000 units in
ending inventory. The ending inventory were 50% complete as to direct labor and 90% complete as to
overhead.

a) What was the total cost of the completed Work in Process Inventory, beginning?
b) What was the cost of the units started and completed in February?
c) What was the cost of February’s Work in Process, end?
Exercise 1-8 (Calculation of Material Costs and Conversion Costs for the Current Period)

Ponkana Co. produces a fruit drink. The units and equivalent units (in liters), as well as unit costs, for the
Initial Mixing Department are as follows:

Materials Conversion Costs

Equivalent units in beginning work in process 6,000 1,200
Units started and completed 40,000 40,000
Equivalent units in ending work in process 3,000 1,800
Unit Cost P.10 P.20

REQUIRED: Assuming the company uses FIFO method, compute the current period costs for

1. Materials
2. Conversion Costs

Exercise 1-9 (Calculation of EP, Unit Cost, Cost of Goods Completed and WIP end using Weighted
Average method)

Medrite uses a weighted-average process-costing system. Material A is added at the start of production
while the packaging material is added at the end of the process. Conversion costs are incurred evenly
throughout the process. The following selected data were extracted from the company’s production
report:

Units completed 15,000

Ending work in process (units) 6,000
Equivalent units: conversion cost 16,800
Equivalent-unit cost: material A P5
Equivalent-unit cost: packaging material P2
Total conversion cost P134,400

REQUIRED:

1. Compute the conversion cost per equivalent unit produced.

2. How far into the manufacturing process is the ending work-in-process inventory?
3. Would the total equivalent units for Material A and the packaging material be the same? Why?
4. Compute the cost of goods completed during the period.
5. Compute the cost of the ending work-in-process inventory.
Exercise 1-10 (True or False)

Instruction: Write C if the statement is true; write W if the statement is false.

1. Examples of industries that would use process costing include the pharmaceutical and
semiconductor industry.
2. The principal difference between process costing and job costing is that in job costing an
averaging process is used to compute the unit costs of products or services.
3. Process-costing systems separate costs into cost categories according to the timing of when
costs are introduced into the process.
4. Estimating the degree of completion for the calculation of equivalent units is usually easier for
conversion costs that it is for direct materials.
5. Process costing would be most likely used by a firm that produces heterogeneous products.
6. The last step in a process-costing system is to determine the equivalent units for the period.
7. Equivalent units are calculated separately for each input.
8. Process-costing journal entries and job-costing journal entries are similar with respect to direct
materials and conversion costs.
9. The accounting (for a bakery) entry to record the transfer of rolls from the Mixing Department
to the Baking Department is:

Work in Process – Mixing Department xx

Work in Process – Baking Department xx
10. The weighted-average process costing method does not distinguish between units started in the
previous period but completed during the current period and units started and completed
during the current period
11. In the weighted-average costing method, the costs of direct materials in beginning inventory are
not included in the cost per unit calculation since direct materials are almost always added at
the start of the production process.
12. The weighted-average cost is the total of all costs entering the Work-in-Process account
(whether they are from beginning work-in-process or from work started during the current
period) divided by total equivalent units of work done to date.
13. The first-in, first-out (FIFO) process costing method assigns the cost of the previous accounting
period’s equivalent units in beginning work-in-process inventory to the first units completed and
transferred out of the process.
14. A distinctive feature of the FIFO process costing method is that the work done on beginning
inventory before the current period is averaged with work done in the current period.
15. A major advantage of the weighted-average process costing is that it provides managers with
information about changes in the costs per unit from one period to the next.
Exercise 1-11 (Multiple Choice)

1. A process costing system is used by a company that

a. Produces heterogeneous products
b. Produces homogeneous products
c. Produces items by special request of customers
d. Accumulates costs by job

2. The FIFO method of process costing will produce the same cost of goods transferred out amount as
the weighted average method when
a. The goods produced are homogeneous.
b. There is no beginning work in process inventory.
c. There is no ending work in process inventory.
d. Beginning and ending work in process inventories are each 50% complete.

3. Transferred-in cost represents the cost from

a. The last department only.
b. The last production cycle.
c. All prior departments.
d. The current period only.

4. Which of the following is (are) the same between the weighted average & FIFO methods of
calculating equivalent production?

Units to account for EP calculations Total Cost to account for

a. No Yes No
b. Yes Yes Yes
c. Yes No No
d. Yes No Yes

5. Which of the following is subtracted from EP under weighted average to obtain EP under FIFO?
a. Beginning WIP EUP completed in current period.
b. Beginning WIP EUP produced in prior period.
c. Ending WIP EUP not completed.
d. Ending WIP EUP completed.

6. Which of the following statement/s is/are true?

I. In a process costing system, units transferred to the next processing department are presumed
to be 100% complete with respect to the work performed by the transferring department.
II. Under the weighted-average method, the equivalent units used to compute the unit costs of
ending inventories relate only to work done during the current period.
a. Statement I only.
 b. Statement II only.
c. Neither Statement I nor Statement II
d. Both Statement I and Statement II

7. Which of the following statements related to job-order costing and process costing are true?
a. Under both costing methods, manufacturing overhead costs are included in the computation of
unit product costs.
b. Under both costing methods, the journal entry to record the completion of production will
involve crediting a work in process inventory account.
c. Under both costing methods, the journal entry to record the cost of goods sold will involve
crediting the finished goods inventory account.
d. All of the above statements are true.

8. Marty Co. uses a weighted-average process costing system. All materials are added at the beginning
of the production process. The equivalent units for materials at Marty would be the sum of:
a. Units in ending work in process and the units started.
b. Units in beginning work in process and the units started.
c. Units in ending work in process and the units started and completed.
d. Units in beginning work in process and the units started and completed.

9. All of the following statements are correct when referring to process costing except:
a. Process costing would be appropriate for a jeweler who makes custom jewelry to order.
b. A process costing system has the same basic purposes as a job-order costing system.
c. Units produced are indistinguishable from each other.
d. Costs are accumulated by department.

10. The purpose of the equivalent-unit computation is to:

a. Convert completed units into the amount of partially completed output units that could be
made with that quantity of input.
b. Assist the business in determining ending inventory.
c. Convert partially completed units into the amount of completed output units that could be
made with that quantity of input.
d. Both b and c are correct.
Exercise 1-12 (Multiple Choice)

Instruction: Encircle the letter of your chosen answer.

1. Health Beverage Company uses a process costing system to collect costs related to the production
of its celery flavored cola. The cola is first processed in a Mixing Department at Health and is then
transferred out and finished up in the Bottling Department. The finished cases of cola are then
transferred to Finished Goods Inventory. The following information relates to Health’s two (2)
departments for the month of January:

Mixing Bottling
Cases of cola in Work in Process, January 1 10,000 3,000
Cases of cola completed and transferred out in January 77,000 ?
Cases of cola I Work in Process, January 31 4,000 8,000

How many cases of cola were completed and transferred to Finished Goods Inventory during
January?
a. 66,000
b. 71,000
c. 72,000
d. 74,000

2. Colby Co. has a process costing system in which the weighted-average method is used. The company
adds all materials at the beginning of the process in the Molding Department, which is the first two
stages of its production process. Information concerning the materials used in the Molding
Department during March is as follows:

Units Material Costs

Work in process, March 1 22,000 P11,000
Units started in March 90,000 46,120
Units completed & transferred to next department 97,000

What was the material cost of the work in process inventory at March 31?
a. P11,220
b. P7,500
c. P5,100
d. P7,650

3. Barnett Co. uses the weighted-average method in its process costing system. The company adds
materials at the beginning of the process in Department M. Conversion costs were 75% complete
with respect to the 4,000 units in work in process at May 1 and 50% complete with respect to the
6,000 units in work in process at May 31. During May, 12,000 units were completed and transferred
to the next department. An analysis of the costs relating to work in process at May 1 and to
production activity for May follows:
 Materials Conversion Costs
Work in process, May 1 P13,800 P3,740
Costs added in May 42,000 26,260

The total cost per equivalent unit for May was:

a. P5.02
b. P5.10
c. P5.12
d. P5.25

4. Roy Co. manufactures a product in Departments A and B. Materials are added at beginning of the
process in Department B. Roy uses the weighted-average method in its process costing system.
Conversion costs for Department B were 50% complete with respect to the 6,000 units in the
beginning process and 75% complete with respect to the 8,000 units in the ending work in process.
A total of 12,000 units were completed and transferred out of Department B during February. An
analysis of the costs in Department B for February follows:

Transferred- In Materials Conversion Costs

Work in process, February 1 P12,000 P2,500 P1,000
Costs added in February 29,000 5,500 5,000

The total cost per equivalent unit during February was closest to:
a. P2.75
b. P2.78
c. P2.82
d. P2.85

5. Jersey Co. has a process costing system in which it uses the weighted-average method. The
equivalent units for conversion costs for the month were 47,500 units. The beginning work in
process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The
ending work in process inventory consisted of 10,000 units, 75% complete with respect to
conversion costs. the number of units started during the month was:
a. 25,000 units
b. 34,000 units
c. 35,000 units
d. 40,000 units
6. Pelican Corp. uses a weighted-average process costing system to collect costs related to production.
The following selected information relates to March production:

Units completed and transferred out 5,000

Units in work in process, March 31 800
Equivalent units, Materials 5,800
Equivalent units, Conversion Costs 5,200
Materials Conversion Costs
Costs in Work in Process, March 1 P2,900 P4,680
Costs added to March production 71,050 131,040

All materials are added at the beginning of the production process. Conversion costs are incurred
uniformly over the production process. What total amount of cost should be assigned to the units in
work in process at the end of March?
a. P14,840
b. P15,420
c. P24,920
d. P25,860

7. Krumble Co. uses the FIFO method in its process costing system. At the beginning of the month,
Department D’s work in process inventory contained 2,000 units. These units were fully complete
with respect to materials and 40% complete with respect to conversion costs, with a total cost at the
point of P3,600. During the month, conversion costs amounted to P8 per equivalent unit. If all 2,000
units are fully complete by the end of the month, their total cost by that time will be:
a. P9,000
b. P10,000
c. P13,200
d. P19,600

8. Mars Co. uses the FIFO method in its process costing system. The equivalent units for March for
conversion costs totaled 37,500 units. The beginning work in process inventory in March consisted f
15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory
in March consisted of 10,000 units, 75% complete with respect to conversion costs. The number of
units started during the month was:
a. 25,000 units
b. 34,000 units
c. 41,500 units
d. 72,500 units
9. The equivalent production under weighted average costing method is arrived at as follows:

Finished and transferred 20,000 x 100% 20,000

In process, Feb. 28 3,000 x 2/3 2,000
22,000

With beginning work in process consisting of 5,000 units, 1/5 done, what should be the equivalent
production under FIFO?
a. 23,000
b. 21,000
c. 22,000
d. 19,000

10. Tasha Corp. uses the FIFO method in its process costing. Operating data for the Curing Department
for the month of March appear below:

% Completed as to
Units Conversion Costs
Work in Process Inventory, beginning 7,900 20%
Transferred in from the prior department during March 40,000
Completed and transferred to the next department 43,900
Ending Work in Process Inventory 4,000 60%

According to the company’s records, the conversion cost in work in process inventory beginning was
P11,850 at the beginning of March. The cost per equivalent unit for conversion costs for March was
P7.40. How much conversion cost would be assigned to the units completed and transferred out of
the department during March?
a. P325,018
b. P324,860
c. P313,168
d. P296,000
 For items 11-13:

Cerin Molding, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost
categories, direct materials and conversion costs. Each product must pass through Department A and
Department B. Direct materials are added at the start of the production process while conversion costs
are allocated evenly throughout the production process.

Data for Department A for February, 2013 are:

Work in process, beginning (40% converted) 200 units
Units started during February 600 units
Work in process, end 100 units
Costs for Department A for February, 2013 are:
Work in process, beginning:
Direct Materials P100,000
Conversion Costs P100,000
Direct materials costs added in February P1,000,000
Conversion costs added in February P1,250,000

Assume that FIFO method of costing is used.

11. What is the unit cost per equivalent unit in Department A?

a. P1,750
b. P3,500
c. P3,682.50
d. P3,750

12. How many units were completed and transferred out of Department A during February?
a. 100 units
b. 600 units
c. 700 units
d. 800 units

13. What were the equivalent units of direct materials and conversion costs, respectively, at the end of
February assuming that Cerin Molding, Inc. uses the weighted-average process costing method?
a. 800; 730
b. 800; 800
c. 800; 700
d. 600; 500
14. CYA Manufacturing Company manufactures a standard recliner. In February, the firm’s Assembly
Department started production of 75,000 chairs. During the month, it has completed 80,000 chairs,
and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in
ending inventory. There were 15,000 chairs in beginning inventory. All direct material costs are
added at the beginning of the production cycle and conversion costs are added uniformly
throughout the production process. The FIFO method of process costing is used by the company.
Beginning work in process was 30% complete as to conversion costs, while ending work in process
was 80% complete as to conversion costs.

Beginning inventory:
Direct materials P24,000
Conversion costs P35,000

Manufacturing costs added during the accounting period:

Direct materials P168,000
Conversion costs P278,000

How many of the units that were started in February were completed also in February?
a. 85,000
b. 80,000
c. 75,000
d. 65,000

For items 15-17:

The following were taken for Department 1 and Department 2 of Cool Corp. for the month of April:

Department 1 Department 2
Units in process beginning 3,500 8,000
Units started 55,000
Increase in number of units 6,200
Units completed 42,120 42,803
Units in process, end 16,380 13,517

All units in process at the beginning are 100% complete as to materials for both departments. In
Department 1, the units in process at the beginning were 60% converted and for Department 2, the
units in process at the beginning were 40% converted. All ending units in process are 100% complete as
to materials and 50% complete as to conversion costs in both departments.
15. For Department 2, what is the difference in EP for the conversion costs between using the weighted
average and the FIFO costing methods?
a. 2,100
b. 3,200
c. 4,400
d. 5,300

16. Under the FIFO method, the EP for materials in Department 1 is:
a. 48,210
b. 55,000
c. 58,500
d. 62,000

17. Under the average method, the EP for materials in Department 2 is:
a. 42,803
b. 49,562
c. 55,637
d. 56,320

For items 18-20:

The company’s records showed the following information for the month of August:

Work in process inventory, beginning:

Prior department costs P4,800 3,000 units (100% complete)
Direct Materials 1,080 (20% complete)
Conversion Costs 600 (25% complete)
Current work:
Prior departmental costs P9,600 8,000 units (100% complete)
Direct Materials 20,460
Conversion Costs 7,640

The ending inventory has 2,000 units which are 45% complete as to Materials, 65% complete as to
conversion costs, and 100% complete for prior department costs. FIFO costing is used.

18. What are the total units to be accounted for?

a. 8,000 units
b. 10,000 units
c. 11,000 units
d. 13,000 units
19. How many units were started and completed this period?
a. 6,000 units
b. 8,000 units
c. 10,000 units
d. 11,000 units

20. What is the prior department cost per unit using FIFO costing method?
a. P1.00
b. P1.20
c. P1.31
d. P1.60

Exercise 1-13 (Journal Entries under Process Costing System)

Verilite Candy Factory uses process costing in its two (2) producing departments. A separate WIP
account is kept in the general ledger for each producing department. The following data pertains to
December operations:

Production Costs Production Costs

Applied Last Month Added This Month
Direct Materials:
Department E P10,000 P50,000
Department Z 6,000 40,000
Direct Labor:
Department E 12,000 80,000
Department Z 9,000 70,000
Applied Factory Overhead:
Department E 24,000 180,000
Department Z 9,000 70,000

During December, 30,000 units with a unit cost of P10 were transferred from Department E to
Department Z, and 28,000 units with a unit cost of P16 were transferred from Department Z to the
stockroom.

REQUIRED: Prepare the journal entries to record the costs charged to the producing departments in
December including those that were transferred out during the month.
Exercise 1-14 (True or False)

Instruction. Write T if your answer is TRUE and F if it is FALSE.

1. If 30,000 units of materials enter production during the first year of operations, 25,000 of the
units are finished, and 5,000 are 30% completed, the number of equivalent units of production
would be 28,500.
2. If 16,000 units of materials enter production during the first year of operations, 12,000 of the
units are finished, and 4,000 are 75% completed, the number of equivalent units of production
would be15,000.
3. If the costs for direct materials, direct labor and factory overhead were P275,300, P42,600, and
P41,000, respectively, for 14,000 equivalent units of production, the total conversion cost was
P358,900.
4. If 10,000 units which were 40% completed are in process at November 1, 80,000 units were
completed during November, and 12,000 were 20% completed at November 30, the number of
equivalent units of production for November was 78,400. (Assume no loss of units in production
and that inventories are costed by the first-in, first-out method.)
5. In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30%
completed are in process at June 1, 28,000 units are completed during June, and 4,000 units
were 75% completed at June 30, the number of equivalent units for June was 33,400.

Exercise 1-15 (Journal Entries in Sequential Flow)

Dranreb Ogama Company manufactures window glass in two sequential departments. The following
cost data pertain to October 2019:

Department A Department B
Direct materials entered into production P160,000 P40,000
Direct labor 555,000 560,000
Applied manufacturing overhead 1,360,000 875,000
Cost of goods completed and transferred:
From Department A 1,925,000
From Department B 2,800,000

Required: Prepare journal entries to record the following:

A. Costs incurred for direct materials and direct labor, and application of manufacturing overhead
in Department A.
B. Transfer of goods from Department A to Department B.
C. Transfer of goods from Department B.
Problem 1-A (Preparation of CPR in one production department; FIFO vs. Weighted Average)

Dico Phil Inc. produces maong gloves in a single-process production system. The company’s accounting
records in June, 2013 reflected the following:

Work in process, beginning (all materials; 30% labor; 60% overhead) 42,000 units
Units started during the month 60,000 units
Work in process, end (all materials; 40% labor; 80% overhead) 30,000 units

Cost Component June 1 During June

Direct Materials P32,400 P90,000
Direct Labor 14,070 32,130
Factory Overhead 35,580 46,020

REQUIRED: Prepare a Cost of Production Report for the month of June assuming that:

a. the company uses the weighted average method.

b. the company uses the FIFO method.

Problem 1-A (Preparation of CPR with journal entries using FIFO method)

Mitando Co. produces a single model of a multi-purpose ergonomic stool. The company uses a process
costing system, with First-In-First-Out (FIFO) method of inventory costing, and maintains a separate
work in process account for each of its two (2) producing departments, Cutting and Assembly. The
ergonomic stool are made of pure polypropylene raw materials and metal cut in the Cutting Department
and then transferred to the Assembly Department, where they are put together with the addition of
springs, hinges, and wheels purchased from outside vendors. Data related to operations in September
are:

Cutting Assembly
Units started last month:
Cutting (80% materials, 50% labor, and 30% overhead) 10,000
Assembly (60% materials, 30% labor and overhead) 5,000
Units started in process in Cutting Department this month 30,000
Units transferred from Cutting to Assembly this month 25,000
Units transferred from Assembly to warehouse this month 18,000
Units still in process at the end of the month:
Cutting (100% materials, 80% labor, 60% overhead) 15,000
Assembly (80% materials, 40% labor and overhead) 12,000
 Cutting Assembly
Cost incurred last month:
Cost from preceding department P10,000
Materials P80,100 1,000
Labor 17,500 2,000
Factory overhead 7,900 4,000
Costs added this month:
Materials 288,000 98,400
Labor 64,000 42,600
Factory overhead 124,000 75,402

REQUIRED: Prepare the:

1. September Cost of Production Report (CPR) for each department.
2. Appropriate journal entries for both producing departments at the end of the month.

Problem 1-C (Preparation of CPR using Weighted Average method)

Robusta Coffee Co. roasts and packs coffee beans. The process begins in the Roasting Department, after
which the coffee beans are transferred to the Packing Department. The following is a partial WIP
account of the Roasting Department at July 31, 2019:

Account: Work in Process – Roasting Department Account # 3045

BALANCE
2019 ITEM PR Debit Credit Debit Credit
July 1 Balance: 25,000 units, 45% complete P640,000
31 Direct Materials, 325,000 units 325,000 965,000
31 Direct Labor 300,000 1,265,000
31 Factory Overhead 360,000 1,625,000
31 Goods Finished, 250,000 units ? ?
31 Balance _____ units, 75% complete ?

Costs incurred last month were as follows: Materials P325,000; Direct Labor P90,000 and Factory
Overhead P225,000.

REQUIRED: Prepare a Cost of Production Report using weighted average and identify the amounts for
WIP-Roasting Department.
Problem 1-D (Preparation of CPR using FIFO method)

The Work in Process accounts of Crunchy Cookie Co. that pertain to the making of “Tasty Snacks,” a new
cookie, during the month of August are presented below.

Work In Process – Mixing

Aug. 31 Materials 50,000 Aug. 31 Transferred out 120,000
Labor 18,800
Overhead 54,400

Work In Process – Baking

Aug. 1 Inventory 2,700 Aug. 31 Transferred out 183,600
31 Labor 10,600
31 Overhead 50,300
31 Transferred in 120,000

Work In Process - Packaging

Aug. 1 Inventory 5,370 Aug. 31 To Finished Goods ?
31 Materials 24,480
31 Labor 8,740
31 Overhead 28,370
31 Transferred in 183,600

Production and inventory data for the Baking and Packaging Departments are as follows:

Inventory August 1 Inventory August 31 Transferred

Department Units % complete Units % Complete Out
Baking 24,000 25 -0- ---- 1,224,000
Packaging 30,000 30 40,000 80 1,214,000
All materials are applied at the beginning of the process.

REQUIRED: Prepare the Cost of Production Report for the month of August using FIFO method for
Baking and Packaging Departments.
Problem 1-E (Preparation of CPR using Weighted Average Method)

The following data pertain to Jarina Milling Company for the month of October:

Units in process, beginning (25% complete as to conversion costs) ?

Units started in October 80,000
Total units to account for 100,000
Units completed and transferred out during October ?
Units still in process on October 31 (80% complete as to conversion costs) 16,000
Total equivalent units: direct materials 100,000
Total equivalent units: conversion costs ?
Work in process, October 1: direct materials P250,000
Work in process, October 1: conversion costs ?
Costs incurred during October: direct materials ?
Costs incurred during October: conversion costs 600,000
Work in process, October 1: total cost 739,000
Total costs incurred during October 1,325,000
Total costs to account for 2,064,000
Cost per equivalent unit: direct materials 9.75
Cost per equivalent unit: conversion costs ?
Total cost per equivalent unit 21.00
Cost of goods completed and transferred out during October ?
Cost remaining in ending work in process inventory: direct material ?
Cost remaining in ending work in process inventory: conversion costs 144,000
Total cost of October 31 work in process 300,000

Additional information:
a. Jarina Milling Company is using weighted average method.
b. Material is added at the beginning of the manufacturing process and conversion costs are
applied evenly throughout the process.

REQUIRED: Prepare the October Cost of Production Report and compute the missing amounts.
Problem 1-F (Preparation of CPR using FIFO or using Weighted Average Method including Journal
Entries)

One of the oldest candies in the world is the chewing gum. Mentholated chewing gum has amazing
variety of ingredients which are responsible for an assortment of proven health benefits (besides
ensuring fresh breath and pearly white teeth). It has also a clean and sweet taste which uses Xylitol as a
sweetener, instead of sugar or Aspartame (Nutrasweet) used in many other chewing gums. It is a an all-
natural sweetener made from the bark of hardwood trees thus providing a healthy environment for an
oral ecosystem

Tasty Chewing Gum Co. produces this type of bubble gum. Direct materials are blended at the start of
the manufacturing process. No materials are lost in the process, so one kilogram of material input yields
one kilogram of mentholated bubble gum. Conversion costs are incurred uniformly throughout the
blending process.

On September 30, 16,000 kg. were in process. All materials had been added and 70% complete as to
conversion costs. WIP beginning consists of direct material costs of P244,100 and conversion costs of
P56,800. During October, 405,000 kilograms of materials were used at a cost of P850,500. Direct labor
costs amounted to P344,000 and overhead applied in October amounted to P239,200. The ending WIP
was 28,000 kilograms. All materials have been added to those units and 25% of conversion costs have
been applied. Output from the Blending Department is transferred finally to the Packaging Department.

REQUIRED: Prepare the October cost of production report for the Blending Department using:

a) FIFO costing method or

b) Average costing method.

Prepare all the related journal entries for the month.

Problem 1-G (FIFO & Weighted Average Method)

Doc D, president of Junquerababes Incorporated manufactures toys for the big boys which are
distributed nationwide. Before the toys are ready for distribution, it undergoes several processes in two
departments (Dept. 1 and Dept. 2). The following costs were accumulated by Department 2 of
Junquerababes Company during April 2019:

Cost Transferred Conversion

From Dept. 1 Material Costs Total
Beginning Inventory P17,050 0 P5,450 P22,500
Current Period Cost 184,000 P34,000 104,000 322,000
P201,050 P34,000 P109,450 P344,500

Production for April in Department 2 (in units):

WIP – April 1 2,000 60% complete

Complete period transferred 20,000
WIP – April 30 5,000 40% complete

Required: Compute the cost of units completed and the value of ending WIP for:

a. Weighted average inventory assumption

b. FIFO inventory assumption