CHAPTER 10 (PROCESS COSTING)

Problem 1 - Mat. & Conversion

Actual WD EP
a) Units completed 8,000 100% 8,000
Units IP end 2,000 1/2 1,000
10,000 9,000

b) Units completed 21,000 100% 21,000

Units IP end 4,000 3/4 3,000
25,000 24,000

c) Units completed 6,000 100% 6,000

Units IP end 1,000 3/4 750
500 2/5 200
7,500 6,950

d) Units completed 18,000 100% 18,000

Units IP end 5,000 ½ 2,500
4,000 ¾ 3,000
27,000 23,500

e) Units completed 32,000 100% 32,000

Units IP end 1,500 1/5 300
4,000 ¾ 3,000
37,500 35,300

Problem 2 - Casper Corporation

1) Units started 11,000

Units completed 9,000 100% 9,000

Units in process, end 2,000 ¾ 1,500
11,000 10,500

2) Materials Labor Overhead

Cost incurred P 15,750 P 40,950 P 25,200
Equivalent prod. 10,500 10,500 10,500
Unit cost P 1.50 P 3,90 P 2.40

Problem 3 -
Case 1 Materials Conversion
Started 5,000 WD EP WD EP

Completed 4,000 100% 4,000 100% 4,000

In process, end 1,000 100% 1,000 ¾ 750
 5,000 5,000 4,750
Case 2
Received 50,000

Completed 44,000 100% 44,000 100% 44,000

In process end 6,000 - ¼ 1,500
50,000 44,000 45,500
Case 3
Started 35,000

Completed 29,000 100% 29,000 100% 29,000

In process, end 3,000 75% 2,250 1/3 1,000
3,000 100% 3,000 1/2 1,500
35,000 34,250 31,500

Problem 4 - Beautiful Co.

Started 12,000

Completed 10,500 100% 10,500 100% 10,500

In process end 1,500 50% 750 2/5 600
1. EUP 12,000 11,250 11.100
Unit cost
M = 72,000/11,250 = P6.40 CC (P88,800 + P44,400) / 11,100 = P12.00

2. Completed & transferred ( 10,500 x P18.40) P193,200

3. In process, end
Materials ( 750 x P6.40) P4,800
L & OH ( 600 x P12.00) 7,200 12,000
Total cost accounted for P205,200

Problem 5 - ABM Company

Department 1 Department 2
Materials Conversion Materials Conversion
Actual EP EP Actual EP EP
Started/received 60,000 40,000

Completed 40,000 40,000 40,000 30,000 30,000 30,009

IP, end 20,000 20,000 15,000 10,000 5,000 8,000
60,000 60,000 55,000 40,000 35,000 38,000

Costs charged to the department

Cost from preceding dept. 720,000 18.00
Cost added in the dept.
Materials 480,000 8.00 245,000 7.00
Labor 330,000 6.00 190,000 5.00
 Overhead 220,000 4.00 114,000 3.00
Total costs added 1,030.000 18.00 549,000 15.00
Total costs 1,030,000 18.00 1,269,000 33.00

Total costs accounted for as follows:

C & T (40,000 x 18) 720,000 (30,000 x 33) 990,000
IP end
Cost from preceding dept. (10,000 x 18) 180,000
Materials ( 20,000 x 8) 160,000 ( 5,000 x 7) 35,000
Labor (15,000 x 6) 90,000 ( 8,000 x 5) 40,000
Overhead (15,000 x 4) 60,000 310,000 ( 8,000 x 3) 24,000 279,000
Total cost as accounted for 1,030,000 1,269,000

CHAPTER 11 (AVERAGE AND FIFO COSTING)

PROBLEM 1
1) FIFO
Units in process, beg. 10,000
Units started 50,000
60,000
Units completed & transferred (40,000)
IP beg. 10,000 70% 7,000
Started & completed 45,000 100% 45,000 100% 45,000
Units in process, end 5,000 100% 5,000 60% 3,000
60,000 50,000 55,000
2) AVERAGE
Units in process, beg. 10,000
Units started 50,000
60,000

Units completed 55,000 100% 55,000 100% 55,000

Units IP end 5,000 100% 5,000 60% 3,000
60,000 60,000 58,000

PROBLEM 2
1) FIFO
Units in process, beg. 3,000
Units started 50,000
53,000
Units completed & transferred (45,000)
IP beg. 3,000 25% 750
Started & completed 42,000 100% 42,000 100% 42,000
Units in process, end 8,000 100% 8,000 60% 4,800
53,000 50,000 47,550
2) AVERAGE
Units in process, beg. 3,000
Units started 50,000
53,000

Units completed 45,000 100% 45,000 100% 45,000

Units IP end 8,000 100% 8,000 60% 4,800
53,000 53,000 49,800

PROBLEM 3
1)
Units in process beg. 300
Units started 2,000
2.300
Units comp. & transf. (1,700)
IP beg. 300 40% 120 70% 210
Started & completed 1,400 100% 1,400 100% 1,400
Units in process, end 600 40% 240 20% 120
2,300 1,760 1,730
2)
540
Unit cost - Materials 3,714/1760 = 2.110227
Conversion 2,258/1730 = 1.305202
6,512 3.415429

3) Cost of units transferred out

From IP beg.
Cost last month 540
Cost added Mat. ( 120 x 2.110227) 253
Conversion ( 210 x 1.305202) 274 1,067
From units started & completed (1,400 x 3.415429) 4,782
5,849
4) Cost of ending inventory
Materials (240 x 2.110227) 507
Conversion ( 120 x 1.305202) 156
663

PROBLEM 4 -
1) FIFO
Units in process, beg 8,000
Units started 14,000
22,000
Units Completed ( 17,000)
IP beg. 8,000 70% 5,600 70% 5,600
Started & completed 9,000 100% 9,000 100% 9,000
Units in process, end 5,000 80% 4,000 40% 2,000
22,000 18,600 16,600
Page 3
48,240
Unit cost Materials 126,852/18,000 = 6.82
Conversion 219,120/16,600 = 13.20
394,212 20.02

Completed & transf.

IP beg.
Cost labor month 48,240
Cost added (5,600 x 20.02) 112,112 160,352
Started & completed ( 9,000 x 20.02) 180,180 340,532

IP end
Materials ( 4,000 x 6.82) 27,280
Conversion ( 2,000 x 13.20) 26,400 53,680
394,212
2) AVERAGE
Units completed 17,000 100% 17,000 100% 17,000
Units IP end 5,000 80% 4,000 40% 2,000
22,000 21,000 19,000

Unit cost Materials 16,440 + 126,852 = 6.823428

21,000
Conversion = 31800 + 219,120 = 13.206316
19,000 20.029744

Completed & transferred ( 17,000 x 20.029744) 340,506

IP end
Materials ( 4,000 x 6.823428) 27,294
Conversion (2000 x 13.206316) 26,412 53,706
394,212

PROBLEM 5 – Auto Novelties, Inc.

a. Average
1) Units in process beg. 15,000
Units started 250,000
265,000

Units completed & transf. 245,000 100% 245,000 100% 245,000

Units in process end 20,000 100% 20,000 40% 8,000
265,000 265,000 253,000

2) Unit cost Materials 210,000 + 3,500,000 = 14.00

265,000

Converion 60,000 + 1,458,000 = 6.00

253,000 20,00
3) Completed & transf. (245000 x 20) 4,900,000
4) IP ined
Materials ( ( 20,000 x 14) 280,000
Conversion ( 8000 x 6) 48,000 328,000
5,228,000
b) FIFO
1) Units completed ( 245,000)
IP beg 15,000 - 1/3 5,000
Started & completed 230,000 100% 230,000 100% 230,000
Units IP beg. 20,000 100% 20,000 40% 8,000
265,000 250,000 243,000

2)Unit cost: Materials 3,500,000/250,000 = 14.00

Conversion 1,458000/243,000 = 6.00
20.00
3) Completed& transferred
From IP beg.
Cost last month 270,000
Cost added ( 5,000 x 6) 30,000 300,000
From started & completed ( 230,000 x 20) 4,600,000 4,900,000

4) IP end
Materials ( 20,000 x 14) 280,000
Conversion (8,000 x 6) 48,000 328,000
5,228,000

CHAPTER 12 –JOINT PRODUCTS/BY-PRODUCTS

Problem 1 – Owen Company

1. Market Value method
Product Units Produced MVat SO Total MV Percentage Share in JC
A 20,000 4.00 80,000 70% 56,000
B 32,000 1.75 56,000 39,200
C 36,000 3.00 108,000 75,600
D 24,000 2.75 66,000 46,200
310,000 217,000

2. Average Unit Cost Method

Product Units Produced Average Unit Cost Share in JC
A 20,000 1.9375 38,750
B 32,000 62,000
C 36,000 69,750
D 24,000 46,500
217,000
[Link] average method
Product Units Produced WF Total WF Cost/WF Share in JC
A 20,000 3.0 60,000 .3875 23,250
 B 32,000 5.5 176,000 68,200
C 36,000 5.0 180,000 69,750
D 24,000 6.0 144,000 55,800
217,000

Problem 2 - Meadows Company

a. Sales value at split-off method
Product SV at SO Percentage Share in JC
A 88,000 60% 52,800
B 77,000 46,200
C 55,000 33,000
132,000
b. Physical units method
Product Units Produced Average UC Share in JC
A 13,200 5.00 66,000
B 8,800 44,000
C 4,400 22,000
132,000

Page 2
Problem 3 – Anchor Company
1. Market value method
Product SV at SO Percentage Share in JC Add’l Cost Total Cost
A 420,000 60% 252,000 88,000 340,000
B 270,000 162,000 30,000 192,000
C 60,000 36,000 12,000 48,000
450,000 130,000 580,000
2. Average unit cost method
Product Units Produced Ave UC Share in JC Add’l Cost Total Cost
A 50,000 4.50 225,000 88,000 313.000
B 40,000 180,000 30,000 210,000
C 10,000 45,000 12,000 57,000
450,000 130,000 580,000

CHAPTER 13 - STANDARD COSTING

Problem 1 – Michelle Corporation

1. Actual price P 2.52 2/. Actual qty. used 4.450
Std. price ( 2.50) Std. qty. (4,050)
Difference 0.02 Difference 400
X Act. Qty. 4,450 x Std. price x 2.50
MPV 89.00 U MQV 1.000 U

3 Actual rate P 3.00 4. Actual hours 3,150

Std. rate ( 3.10) Std. hours ( 3,000)
 Difference ( 0.10) Difference 150
X Actual Hrs. 3,150 x Std. rate 3.10
Labor rate var. ( 315) F LEV 465 U

Problem 2 – Longview Hospital

1. Actual price (9,540/3,600) 2.65 2. Actual qty. used 3,200
Std. price (2.75) Std. qty ( 1,500 x2)(3,000)
Difference (0.10) Difference 200
X Actual quantity 3,600 x Std. price 2.75
MPV ( 360) F MQV 550U

2. Actual rate (5100/340) 15.00 4. Actual hrs. 340

Std. rate 15.00 Std. hrs. (1,500 x .2) (300)
Difference 0 Difference 40
X Std. rate 15.00
LEV 600 U
5. Actual hrs. 340
Std. hrs. ( 300)
Difference 40
X Variable rate 7.00
Variable efficiency 280 U

Problem 3 - Golden Shower Company

5,000 DLHrs.
Total Per DLHr Std. hrs./unit = 5,000 DLHrs..
Fixed 5,000 1.00 4,000 units
Variable 7,500 1.50
Total 12,500 2.50 = 1.25 Hrs./unit

Materials
1. Actual price P 1.02 2. Actual qty. 7,200
Std. price ( 1,00) Std.(3,500 x 2) 7,000
Difference .02 Difference 200
X actual qty. 7,200 x Std. price 1.00
MPV 144 U MQV 200 U
Labor
1. Actual rate (33,750/4,500) 7,50 2/ Actual hrs. 4,500
Std. rate ( 8.00) Std. hrs. (3,500 x 1.25) 4,375
Difference ( 0.50) Difference 125
X actual hrs. 4,500 x Std. rate 8.00
LRV (2,250) F LEV 1.000U
Factory overhead
1. Actual overhead 11.250.00
Less: Budget allowed on std. hrs.
Fixed 5,000
Variable (4,375 x 1.50) 6,562.50 11,562.50
 Controllable variance ( 312.50) F

2. Budget allowed on std hrs. 11,562.50

Less: OH applied to production
(4,3,75 x 2.50) 10,937.50
Volume variance 625.00

Problem 4 – Fenton Company

155,000 DLHrs.
Total Per DLHr
Fixed 620,000 4.00 (4 x 155,000) Std. hrs./unit = 10.00/4
Variable 465,000 3.00 (465,000/155,000) = 2.5 Hrs.
Total 1,085,000 7.00

1. Actual variable overhead 475,000

Less: AH x Variable rate ( 148,000 x 3) 444,000
Variable spending variance 31,000 U

AH x Variable rate 444,000

Less: Std. hrs. x V rate ( 60,000 x 2.5 x 3) 450,000
Variable efficiency variance ( 6,000) F

2. Actual fixed overhead 632,500

Less: Fixed overhead at normal capacity 620,000
Fixed spending variance 12,500 U

Fixed overhead at normal capacity 620,000

Less: Std. hrs. x fixed rate (150,000 x 4) 600,000
Fixed volume variance 20,000 U

3. Actual factory overhead (475,000 + 632,500) 1,107,500

Less: Budget allowed on std. hrs.
Fixed 620,000
Variable ( 150,000 x 3) 450,000 1,070,000
Controllable variance 37,500 U
Budget allowed on std. hrs 1,070,000
Less: Std. hrs. x OH rate (150,000 x 7) 1,050,000
Volume variance 20,000 U

4. Actual factory overhead 1,107,500

Less: Budget allowed on actual hrs.
Fixed 620,000
Variable (148,000 x 3) 444,000 1,064,000
Spending variance 43,500 U

Budget allowed on actual hrs. 1,064,000

 Less: Budget allowed on std. hrs. 1,070,000
Efficiency variance ( 6,000) F

Budget allowed on std. hrs. 1,070,000

Less: Std. hrs. x FO rate (150,000 x 7) 1,050,000
Volume variance 20,000 U

5. Spending variance 43,500 U

Variable efficiency variance ( 6,000) F

Actual hours 148,000
Less: Standard hours 150,000
Difference ( 2,000)
X Fixed overhead rate 4.00
Fixed efficiency variance ( 8,000) F

Budget allowed on actual hours 1,064,000

Less: Actual hrs. x factory OH rate
148,000 x 7 1,036,000
Idle capacity variance 28,000 U