Process Costing – Handouts
Problem 1
Alpha Company started manufacturing its product on January 1, 2023. The following information was
gathered for the month of January 2023:
Costs:
Direct materials P18,000
Direct labor 24,000
Factory overhead 19,200
Started in process 8,000 units
Completed and transferred 6,000 units
Work in process, end (60% complete) ?
All of the materials are added at the beginning of the production. There are no lost units during the
production.
Required:
1. Compute for the equivalent units of production for materials and conversion cost.
2. Compute for the cost of units completed and transferred.
3. Compute for the cost of work in process at the end of month.
Problem 2
Bravo Company uses the process costing in assigning cost to its product. The following information was
gathered for the month of February 2023:
Work in process – February 1 (55% completed) 20,000 units
Started in process 80,000 units
Work in process – February 28 (75% completed) 25,000 units
Direct materials Conversion cost Total
Work in process – February 1 220,000 120,050 340,050
Added cost for the month of February 530,000 479,950 1,009,950
Total 750,000 600,000 1,350,000
All materials are added at the beginning of the process. There are no lost units during the production.
Required:
1. Compute for the equivalent units of production for materials and conversion cost under weighted
average and FIFO.
2. Compute for the cost of units completed and transferred under weighted average and FIFO.
3. Compute for the work in process at the end of month under weighted average and FIFO.
KRBL
Problem 3
Charlie Company uses process costing in assigning costs to its product. The following information was
provided by Department B of Charlie Company:
Work in process – March 1 (40% completed) 30,000 units
Started in process 90,000 units
Work in process – March 31 (55% completed) 40,000 units
There are no lost units during the production.
Required:
1. Compute for the equivalent units production of direct materials under the following independent
scenarios using Weighted Average and FIFO:
A. All direct materials are added at the beginning of the production.
B. All direct materials are added at the end of the production.
C. All direct materials are added at 30% of the production.
D. All direct materials are added at 60% of the production.
E. 20% of the materials are added at 30% of the production, 50% of the materials are added
at 60% of production and 30% are added at the end of the production.
F. Materials are added evenly during the production.
Problem 4
Delta Company uses process costing in assigning costs to its product. Delta has three departments to
produce its product (Cutting, Assembly and Finishing). The following information was provided by the
Cutting and Assembly Department for the month of March 2023:
Cutting Department Assembly Department
WIP – March 1, 2023 20,000 units (25% complete) 10,000 units (40% complete)
Started in process/Transferred in 80,000 units ?
WIP – March 31, 2023 30,000 units (50% complete) 20,000 units (20% complete)
Cutting Department
Direct materials Conversion Cost
WIP – March 1, 2023 P220,000 P150,000
Added cost for the month of March 530,000 402,500
Assembly Department
Direct materials Conversion Cost Transferred-in
WIP – March 1, 2023 P120,000 P170,000 P380,000
Added cost for the month 420,000 550,000 ?
of March
KRBL
All materials are added at the beginning of the process for both departments. There are no lost units
during the production for both departments.
Required:
1. Compute for the cost of transferred out units in the Cutting Department using WA.
2. Compute for the cost of the ending work in process inventory in the Cutting Department using
WA.
3. Compute for the cost of the transferred out units in the Assembly Department using WA.
4. Compute for the cost of the ending work in process inventory in the Assembly Department using
WA.
Problem 5
Echo Company uses process costing in assigning costs to its product. Delta has three departments to
produce its product (Cutting, Canning and Finishing). The following information was provided by the
Cutting and Assembly Department for the month of March 2023:
Cutting Department Canning Department
WIP – March 1, 2023 20,000 units (25% complete) 10,000 units (40% complete)
Started in process/Transferred in 80,000 units ?
WIP – March 31, 2023 30,000 units (50% complete) 20,000 units (20% complete)
Cutting Department
Direct materials Conversion Cost
WIP – March 1, 2023 P220,000 P150,000
Added cost for the month of March 920,000 600,000
Canning Department
Direct materials Conversion Cost Transferred-in
WIP – March 1, 2023 P120,000 170,000 320,000
Added cost for the month 336,000 417,600 ?
of March
All materials are added at the beginning of the process for both departments. There are no lost units
during the production for both departments.
Required:
1. Compute for the cost of transferred out units in the Cutting Department using FIFO.
2. Compute for the cost of the ending work in process inventory in the Cutting Department using
FIFO.
3. Compute for the cost of the transferred out units in the Assembly Department using FIFO.
4. Compute for the cost of the ending work in process inventory in the Assembly Department using
FIFO.
KRBL