Process Costing

Degree of Uniqueness of Products or Services

>> Unique Job Order Costing
>> Standardized Process Costing
- Few identical, low cost items
- Products are mass produced in continuous process
- Cost are accumulated by process or by department
- (equivalent of job cost sheet) WIP has production report for each

Similarities between Job-order and Process Costing

>> Assign Materials and overhead costs to products
>> Uses Manufacturing overhead, raw materials, WIP, and Finished Goods
>> Flow of Cost

Types of Processing
>> Sequestial Processing
- Goes throught each department
- Units flow in sequence
>> Parallel Processing
- Pwede maging simultaneous ang paggawa for theproduct
- Some units go through different processing department

Processing Department
- Activities performed are performly uniformed
- Outputs are homogenous

Direct Materials
Direct Labor Processing Department
Manufacturing Overhead

Equivalent Units of Production

Porcess Costing Illustration (Double Diamond Skis)

>> Shaping and Milling Department Dr. Raw Materials, Cr. WIP

At beginning of May, Ship and Milling Dept. had 200 units partially completed: 55% on
[Link] had beginning balance of 15,175 which consisted of 9,600 in direct materials
During the month, Deptl. Received 368,600 of Direct materials and incorrued 350,900
They began work on 5,000 units and completed 4,800 units which were later transferr
 200 Beginning
5000 During
4800 Completed
400 Ending Inventory At end of May, there where 400 units

>> Graphics Application Department

>> Molding Department
>> Grinding and Sending Dept.
>> Finishing And Pairing Dept.
>> Finished Goods

FIFO Method
Total cost
Physical Units
DM
WIP, Beg. 200 9,600
Started into Production 5000 368,600
Total Units to account for 5,200 378,200

Total cost
Physical Units DM
WIP, Beg. 9,600
200
Completion of WIP, Beg. 6,840
Started and Completed 4600 349,600
WIP, Ending 400 12,160
Total Units Accounted for 5200 378,200

Weighted Average Method

Total cost
Physical Units
DM
WIP, Beg. 200 9,600
Started into Production 5000 368,600
Total Units to account for 5,200 378,200

Total cost
Physical Units DM
WIP, Beg. 8,388
200
Completion of WIP, Beg. 6,863
Started and Completed 4600 350,750
 WIP, Ending 400 12,200
Total Units Accounted for 5200 378,200

Short Quiz
FIFO Method
Total cost
Physical Units
DM
WIP, Beg. 25000 117,000
Started into Production 50000 363,000
Total Units to account for 75,000 480,000

Total cost
Physical Units DM
WIP, Beg. 117,000
25,000
Completion of WIP, Beg. 33,000
Started and Completed 40,000 264,000
WIP, Ending 10,000 66,000
Total Units Accounted for 75,000 480,000

FIFO Method (with spoilage)

Total cost
Physical Units
DM
WIP, Beg. 1000 9,700
Started into Production 35000 87,500
Total Units to account for 36,000 97,200

Total cost
Physical Units DM
WIP, Beg. 9,700
1000
Completion of WIP, Beg. -
Started and Completed 30000 75,000
Normal 680 1,700
Abnormal 380 950
WIP, Ending 4000 10,000
Total Units Accounted for 36060 97,350

Total Units Comp 31000 86,400

Cost 2.79
uous process
y department
production report for each batch of products

inished Goods

Finished Goods COGS

w Materials, Cr. WIP

s partially completed: 55% on direct material and 30% conversion cost

ted of 9,600 in direct materials and 5,575 in conversion cost
terials and incorrued 350,900 in conversion cost
nits which were later transferred in Graphics Application Dept.
of May, there where 400 units in WIP inventory which were 40% complete on direct materials and 25% comple

25,000 Beg
50000 During
65000 Completed
10,000

Total cost % of Completion

CC Total DM CC
5,575 15,175 55% 30%
350,900 719,500
356,475 734,675

Total cost % of Completion

CC Total DM CC
5,575 15,175 55% 30%
10,150 16,990 45% 70%
333,500 683,100 100% 100%
7,250 19,410 40% 25%
356,475 734,675

Total cost % of Completion

CC Total DM CC
5,575 15,175 55% 30%
350,900 719,500
356,475 734,675

Total cost % of Completion

CC Total DM CC
4,365 12,753 55% 30%
10,185 17,048 45% 70%
334,650 685,400 100% 100%
 7,275 19,475 40% 25%
356,475 734,675

Total cost % of Completion

CC Total DM CC
14,500 131,500 80% 20%
234,000 597,000
248,500 728,500

Total cost % of Completion

CC Total DM CC
14,500 131,500 80% 20%
72,000 105,000 20% 80%
144,000 408,000 100% 100%
18,000 84,000 100% 50%
248,500 728,500

Total cost % of Completion

CC Total DM CC
10,000 19,700 100% 60%
72,000 159,500
82,000 179,200

Total cost % of Completion

CC Total DM CC
10,000 19,700 100% 60%
893 893 0% 40%
66,956 141,956 100% 100%
1,518 3,218 100% 100%
848 1,798 100% 100%
1,785 11,785 100% 20%
82,000 179,350

79,366 165,766
2.56 5.35
rect materials and 25% complete in conversion cost

Equivalent Units of Production Cost per EUP

DM CC DM CC
110 60 87.27 92.92
4,850 4,840 76 72.50
4,960 4,900

EUP Cost per EUP

DM CC DM CC
110 60 87.27 92.92
90 140
4600 4600 76 72.50
160 100
4,960 4,900

Equivalent Units of Production Cost per EUP

DM CC DM CC
110 60
4,850 4,840
4,960 4,900 76.25 72.75

EUP Cost per EUP

DM CC DM CC
110 60 76.25 72.75
90 140
4600 4600 76.25 72.75
 76.25 72.75
160 100
4,960 4,900

Equivalent Units of Production Cost per EUP

DM CC DM CC
20000 5000 5.85 2.90
55,000 65,000 6.60 3.60
75,000 70,000

EUP Cost per EUP

DM CC DM CC
20000 5000 5.85 2.90
5000 20000
40000 40000 6.60 3.60
10000 5000
75,000 70,000

Equivalent Units of Production Cost per EUP

DM CC DM CC
1000 600 9.70 16.67
35,000 32,260 2.50 2.23
36,000 32,860

EUP Cost per EUP

DM CC DM CC
1000 600 9.70 16.67
0 400
30000 30000
680 680 2.50 2.23
380 380
4000 800
36,000 32,860
Template
FIFO Method
Total cost
Physical Units
DM CC
WIP, Beg. 200 9,600 5,575
Started into Production 5000 368,600 350,900
Total Units to account for 5,200 378,200 356,475

Total cost
Physical Units DM CC
WIP, Beg. 9,600 5,575
200
Completion of WIP, Beg. 6,840 10,150
Started and Completed 4600 349,600 333,500
WIP, Ending 400 12,160 7,250
Total Units Accounted for 5200 378,200 356,475

Weighted Average Method

Total cost
Physical Units
DM CC
WIP, Beg. 200 9,600 5,575
Started into Production 5000 368,600 350,900
Total Units to account for 5,200 378,200 356,475

Total cost
Physical Units DM CC
WIP, Beg. 8,388 4,365
200
Completion of WIP, Beg. 6,863 10,185
Started and Completed 4600 350,750 334,650
WIP, Ending 400 12,200 7,275
Total Units Accounted for 5200 378,200 356,475

FIFO Method (with spoilage)

Total cost
Physical Units
DM CC
WIP, Beg. 1000 9,700 10,000
Started into Production 35000 87,500 72,000
Total Units to account for 36,000 97,200 82,000

Total cost
 Physical Units DM CC
WIP, Beg. 9,700 10,000
1000
Completion of WIP, Beg. - 893
Started and Completed 30000 75,000 66,956
Normal 680 1,700 1,518
Abnormal 380 950 848
WIP, Ending 4000 10,000 1,785
Total Units Accounted for 36060 97,350 82,000

Total Units Com 31000 86,400 79,366

Cost 2.79 2.56

Exercises!
26 Given
Beginning WIP 20,000
% of Completion (CC) 10%
Conversion cost in Beg WIP 7,000
Started units during the month 63,000
Ending WIP 10,000
% of Completion (CC) 10%
Total cost Incurred 237,600
What would be Cost per EUP for conversion cost of the Month?
= Total Cost / EUP Beg. WIP
3.305 Completed Beg. WIP
Started & Completed
End
Total EUP

27 Given
Beg. WIP 10,000
%C cost 50%
CC 37,500
SPDM 98,000
End. WIP 17,000
%C cost 80%
Total CC during the month 727,080
Find cost per EUP for the month
Beg. WIP 50% 5000
10,000
Completed Beg. WIP 50% 5000
Started & Completed 81,000 100% 81000
 End 17,000 80% 13600
Total EUP 104600
Total Cost during the Month 764,580
Cost per EUP 7.310

28 Beg WIP 40% 5200

Beg. WIP Complete 13,000 60% 7800
SPDM 87,000 100% 87000
End. WIP 11,000 30% 3300
Total EUP 103300

CC in Beg. 39,364
Add. CC 721,035
Total Cost 760,399

Cost Per EUP 7.361

29 Beg WIP 90% 9000

Beg. WIP Complete 10,000 10% 1000
SPDM 58,000 100% 58000
End. WIP 17,000 40% 6800
Total EUP 74800

CC in Beg. 77,490
Add. CC 552,062
Total Cost 629,552

Cost Per EUP 8.416

30 Find equivalent units for conversion costs

Beg. WIP 4,000 20% 800
80% 3200
SPDM 48,000 100% 48000
End WIP 14,000 30% 4200
Total EUP 56200

31 Find equivalent units for conversion costs

Beg. WIP 5,000 60% 3000
40% 2000
SPDM 63,000 100% 63000
End WIP 18,000 80% 14400
 Total EUP 82400

32 Find equivalent units for conversion costs

Beg. WIP 6700 50% 3350
50% 3350
SPDM 50200 100% 50200
End WIP 7600 60% 4560
Total EUP 61460

33 Beg. WIP 4700 40% 1880

60% 2820
SPDM 50300 100% 50300
End WIP 6300 60% 3780
Total EUP 58780

34 Find Cost per EUP

Beg WIP 80% 10400
13,000 20% 2600
SPDM 55,000 100% 55000
End. WIP 11,000 30% 3300
Total EUP 71300

CC in Beg. 23,920
Add. CC 127,890
Total Cost 151,810

Cost Per EUP 2.129

35 Find Cost per EUP

Beg WIP 18,000 60% 10800
40% 7200
SPDM 60,000 100% 60000
End. WIP 24,000 30% 7200
Total EUP 85200

CC in Beg. 64,800
Add. CC 431,520
Total Cost 496,320

Cost Per EUP 5.825

36 Find Cost Per EUP
Beg WIP 7,400 60% 4440
40% 2960
SPDM 62,300 100% 62300
End. WIP 3,700 70% 2590
Total EUP 72290

CC in Beg. 31,302
Add. CC 497,341
Total Cost 528,643

Cost Per EUP 7.313

37 Find Cost Per EUP

Beg WIP 9,600 50% 4800
50% 4800
SPDM 35,900 100% 35900
End. WIP 7,100 10% 710
Total EUP 46210

CC in Beg. 17,318
Add. CC 161,085
Total Cost 178,403

Cost Per EUP 3.861

38 Find equivalent units for conversion costs

Beg. WIP 3000 70% 2100
30% 900
SPDM 72000 100% 72000
End WIP 18000 50% 9000
Total EUP 84000

39 Find equivalent units for conversion costs

Beg. WIP 13000 20% 2600
80% 10400
SPDM 54000 100% 54000
End WIP 1000 50% 500
Total EUP 67500

40 Find equivalent units for conversion costs

Beg. WIP 7700 80% 6160
20% 1540
 SPDM 47700 100% 47700
End WIP 1100 90% 990
Total EUP 56390

41 Find equivalent units for conversion costs

Beg. WIP 3400 30% 1020
70% 2380
SPDM 45400 100% 45400
End WIP 4100 90% 3690
Total EUP 52490

42 Conversion cost assigned to units transferred out

Beg. WIP 1,100 40% 440
60% 660
SPDM 41,400 100% 41400
End. Inventory 4600 30% 1380

Transferred Out 1,100 1100

41,400 41400
EUP of Transferred 42500
Cost per EUP 9.24
Conversion cost assigned to units transferred out 392,700

43 Conversion cost assigned to units transferred out

Beg. WIP 6,200 20% 1240
80% 4960
SPDM 41,800 100% 41800
End. Inventory 3200 60% 1920
Total EUP 49920

Transferred Out 6,200 6200

41,800 41800
EUP of Transferred 48000
Cost per EUP 7.42
Conversion cost assigned to units transferred out 356,160

44 How many units were transferred to the next department?

Beg. WIP 59,000
Additional Transfer (SPDM) 367,000
End. WIP 35,000

Beg WIP 59,000

SPDM 332,000
391,000
45 How many units were transferred to the next department?
Beg. WIP 78,000
Additional Transfer (SPDM) 254,000
End. WIP 21,000

Beg WIP 78,000

SPDM 233,000
311,000

46 Find total cost of units completed and transferred out of department

Beg. WIP 2,000
%C (DM) 100%
%C (CC) 40%
Total cost 25,000

Started and Completed 50,000

Cost per EUP (DM) 1.5 75000
Cost per EUP (CC) 3.2 160000
235,000

47 Find conversion cost assigned to ending WIP

Ending WIP 2,300
%oC 40%
920
Cost per EUP 5.29
CC 4866.80

48 Find conversion cost assigned to ending WIP

Ending WIP 1,100
%oC 20%
220
Cost per EUP 1.12
CC 246.40

49 What would be Cost per EUP for the month

Beg. WIP 14,000 Beg. WIP
%oC 70%
CC 20,580 SPDM
SPDM 53,000 End WIP
End. WIP 17,000
%oC 20%
CC 80,660 CC
SPDM
50 What would be Cost per EUP for the month
Beg. WIP 10,000 50% 5000 5000
50% 5000
SPDM 66,000 100% 66000
End WIP 10,000 80% 8000 79000
84000 84000

CC 541,150
SPDM 79000
6.850

51 What would be Cost per EUP for the month

Beg. WIP 21,000 60% 12600 12600
40% 8400
SPDM 42,000 100% 42000
End WIP 22,000 70% 15400 65800
78400 78400

CC 172,396
SPDM 65800
2.620

52 What would be Cost per EUP for the month

Beg. WIP 14,000 10% 1400 1400
90% 12600
SPDM 75,000 100% 75000
End WIP 22,000 70% 15400 103000
104400 104400

CC 671,560
SPDM 103000
6.520

53 What were the EUP

Beg. WIP 5,000 80% 4000 4000
20% 1000
SPDM 60,000 100% 60000
End WIP 2,000 20% 400 61400
65400 65400

54 What were the EUP

Beg. WIP 10,000 10% 1000 1000
80% 8000

47800
 SPDM 36,000 100% 36000
End WIP 19,000 20% 3800 47800
48800 48800

55 What were the EUP

Beg. WIP 6,400 10% 640 640
80% 5120
SPDM 47,400 100% 47400
End WIP 3,800 40% 1520 54040
54680 54680

56 What were the EUP

Beg. WIP 7,200 20% 1440 1440
80% 5760
SPDM 67,500 100% 67500
End WIP 2,600 80% 2080 75340
76780 76780

57 What were the Cost per EUP

Beg. WIP 20,000 80% 16000 16000
20% 4000
SPDM 110,000 100% 110000
End WIP 40,000 25% 10000 124000
140000 140000

CC 186,000
124000
1.500

58 What were the Cost per EUP

Beg. WIP 22,000 70% 15400 15400
30% 6600
SPDM 50,000 100% 50000
End WIP 21,000 40% 8400 65000
80400 80400

CC 148,850
SPDM 65000
2.290

59 What were the Cost per EUP

Beg. WIP 14,000 20% 2800 2800
80% 11200
SPDM 81,000 100% 81000
End WIP 11,000 10% 1100 93300
 96100 96100

CC 92,367
SPDM 93300
0.990

60 What were the Cost per EUP

Beg. WIP 6,600 70% 4620 4620
30% 1980
SPDM 52,000 100% 52000
End WIP 2,000 40% 800 54780
59400 59400

CC 444,047
SPDM 54780
8.106

61 What were the Cost per EUP

Beg. WIP 9,600 70% 6720 6720
30% 2880
SPDM 40,000 100% 40000
End WIP 7,000 90% 6300 49180
55900 55900

CC 190,130
SPDM 49180
3.866

62 Find total cost of units completed and transferred out of department

Started and Completed 15,000
Cost per EUP (DM) 3.10 46500
Cost per EUP (CC) 4.50 67500
114,000
Cost of WIP Beg. 48200
Cost of WIP Beg. Completion 18000
180,200

63 What are the EUP

DM CC
WIP Beg. 500 100% 40%
60%
SPDM 1600 100% 100%
WIP End. 400 100% 25%
64 What are the EUP
CC CC
WIP Beg. 20000 60% 0
40% 8000
SPDM 300000 100% 300000
WIP End. 40000 40% 16000
324000

65 What are the EUP

CC CC
WIP Beg. 8000 25% 0
75% 6000
SPDM 30000 100% 30000
WIP End. 10000 60% 6000
42000

66 CC CC
WIP Beg. 8000 25% 0
75% 6000
SPDM 30000 100% 30000
WIP End. 10000 60% 6000
42000
al cost % of Completion Equivalent Units of Production
Total DM CC DM CC
15,175 55% 30% 110 60
719,500 4,850 4,840
734,675 4,960 4,900

al cost % of Completion EUP

Total DM CC DM CC
15,175 55% 30% 110 60
16,990 45% 70% 90 140
683,100 100% 100% 4600 4600
19,410 40% 25% 160 100
734,675 4,960 4,900

al cost % of Completion Equivalent Units of Production

Total DM CC DM CC
15,175 55% 30% 110 60
719,500 4,850 4,840
734,675 4,960 4,900

al cost % of Completion EUP

Total DM CC DM CC
12,753 55% 30% 110 60
17,048 45% 70% 90 140
685,400 100% 100% 4600 4600
19,475 40% 25% 160 100
734,675 4,960 4,900

al cost % of Completion Equivalent Units of Production

Total DM CC DM CC
19,700 100% 60% 1000 600
159,500 35,000 32,260
179,200 36,000 32,860

al cost % of Completion EUP

 Total DM CC DM CC
19,700 100% 60% 1000 600
893 0% 40% 0 400
141,956 100% 100% 30000 30000
3,218 100% 100% 680 680
1,798 100% 100% 380 380
11,785 100% 20% 4000 800
179,350 36,000 32,860

165,766
5.35

10% 2000
20,000
90% 18000
53,000 100% 53000
10,000 10% 1000
74000

Total Cost 244,600

14,000 0.7 9800 9800
0.3 4200
36,000 100% 36000
17,000 20% 3400 43600
53400 53400

80,660
43600
1.850
DM CC
0 0
0 300
1600 1600
400 100
2000 2000
 Cost per EUP
DM CC
87.27 92.92
76 72.50

Cost per EUP

DM CC
87.27 92.92

76 72.50

Cost per EUP

DM CC

76.25 72.75

Cost per EUP

DM CC
76.25 72.75

76.25 72.75

Cost per EUP

DM CC
9.70 16.67
2.50 2.23

Cost per EUP

DM CC
9.70 16.67

2.50 2.23
LQ1 Set A

Given: WIP 210,000

2 uncompleted jobs
DM 70,000
20,000
DL 50,000
10,000

Solution: DM 70,000
20,000
Total DM
DL 50,000
10,000
Total DL
Total

WIP
Total DL and DM
Total Overhead Applied

Total Overhead Applied

Total Direct Labor
Predetermined Overhead Rate
Solution: Dept. A
DM
DL
Manufacturing overhead

Dept. B
DM
DL
Manufacturing overhead

Total Manufacturing Cost

Solution: Underapplied OH = Actual OH - Applied OH

4,680 = 472,590 - Applied OH
472,590 - 4,680 = Applied OH
467,910 Appplied OH

Applied OH = POHR x Actual DL hours

477,590 = POHR x 29,000
POHR = 467,910/29,000
POHR 16.13

POHR = Est. OH / Est. DL

16.1348275862069 = 477,590
Est. DL = 477,590
Est. DL = 29600
Solution: (1) Find Ending WIP
Total Debits 767,500
COGM 602,500
(1) Ending WIP 165,000

(2) Calculate Total DL in Ending WIP

POHR = Est. MO
187,500
POHR = 0.75

DL in End. WIP = Applied OH

48,000
DL in End. WIP = 64,000

(3) Calculate Direct Materials in WIP

End. WIP = DM
165,000 = DM
DM in End. WIP 53,000

Solution: Overapplied OH = Actual OH

4,900 665,700
Applied OH = 670,600
 Applied OH = POHR
670,600 = ?
POHR = 670,600
POHR 18.524861878

POHR = Est. OH Cost

18.524861878453 = 670,700
Est. DL = 670,700
Est. DL = 36,205

Solution: Under. OH = Actual OH

15,400 233,000
Applied OH 217,600

Applied OH = POHR
217,600 ?
POHR 13.6

POHR = Est. OH Cost

13.6 ?
Est. OH Cost 238,000

Solution: Over. OH = Actual OH

5,000 120,000
Applied OH 125,000
 Applied OH = POHR
125,000 ?
POHR 8

POHR = Est. OH Cost

8 ?
Est. OH Cost 128000

Solution: Applied OH = POHR

? ?
318,970 19.1

POHR
19.1

Applied OH 318,970
Actual Overhead 336,890
-17,920 Underapplied

Solution: Applied OH = POHR

? ?
375,440 24.7

POHR
24.7

Applied OH 375,440
Actual OH 350,680
 24,760 Overapplied

Solution: Applied OH = POHR

? ?
413,100
POHR 21.29

Under. OH 5650
Actual OH 418,750
Applied OH 413,100

Solution: POHR = Est. OH/Est. DL

Applied OH = POHR*Actual DL

Applied OH = POHR
? ?
367,200 ?
POHR 15.30

Overapplied 8060
Actual OH 359140
Applied OH 367,200
Solution: POHR = Est. OH/Est. DL
Applied OH = POHR*Actual DL

POHR = Est. OH
3.90 39,000

To go back to
#27
#28

Solution Applied OH = POHR

37,000 2

Applied OH 37,000
Actual OH 38,000
- 1,000 Underapplied
Solution: POHR=Est. OH/Est. DL
POHR = Est. OH Cost
38 684,000

Cost for Job 23

DM 850
DL 600
Manuf. Overhead 380
1830

LQ2: Process Costing

Solution: DM 100,000
WIP 4,000 ---------->
25 --------->

DM 100,000
2,500
40

Solution: Completed 3,500

Cost per EUP 25
87,500
Solution: Transferred out 2000
Cost per EUP 40
80,000

Solution: End. WIP 500

Cost per EUP 40 25
20,000 12,500
Spoiled are ignored

Cost
Solution: Physical Units DM
WIP, Beg. 10,000 50,000
Beg. Complete
SPDM 28,400 100,000
(26)Normal Spoilage 1920
(27)Abnormal Spoilag 1,680
WIP, End 8,000
 Total 50,000 150,000

SPDM 40,000
WIP, End. 8,000
Completed 32,000
Transferred out (Fro 28,400 =38,400 - 10,000(WIP, Beg.)
(25) Total Spoiled Uni 3,600

(FIFO) Cost
Solution: Physical Units DM
WIP, Beg. 5,000.00 9,700.00
SPDM 35,000.00 87,500.00
40,000.00 97,200.00

WIP Beg 9,700.00

5,000.00
Completion
S&C 23,000.00 57,500.00
Normal 840.00 2,100.00
Abnormal 3,660.00 9,150.00
Ending 7,500.00 18,750.00

SPDM 35,000.00
WIP, End. 7,500.00
Completed 27,500.00
Transferred out (Fro 23,000.00
Total Spoiled Units 4,500.00

(Weighted-Average) Cost
Physical Units DM
WIP, Beg. 5,000.00 9,700.00
SPDM 35,000.00 87,500.00
40,000.00 97,200.00

WIP Beg 12,150.00

5,000.00
Completion
S&C 23,000.00 55,890.00
Normal 840.00 2,041.20
Abnormal 3,660.00 8,893.80
Ending 7,500.00 18,225.00
 90,000

60,000
150,000

210,000
150,000
60,000

60,000
60,000
1 -------->
 25,000
? 80000
40,000 40000

5,000
30,000
0 60000

240,000

/ Est. DL
/ 16.1348275862069
 / Est. DL
/ 250,000

/ POHR
/ 0.75

+ DL
+ 64,000

+ Applied OH
+ Applied OH
x Actual DL
x 36,200
/ 36,200

/ Est. DL
/ ?
/ 18.524861878453

- Applied OH
- ?

x Actual DL
16,000

/ Est. DL
17,500

- Applied OH
?
x Actual DL
15,625

/ Est. DL
16,000

x Actual DL
16,700
16,700

= Est. OH cost
341,890

x Actual DL
15,200
15,200

= Est. OH Cost
355,680
x Actual DL
19,400
19,400

x Actual DL
24,000
24,000
/ Est. DL
10,000

x Actual DL
18,500
/ Est. DL
18,000

Ginamit lahat kasi End. WIP are complete

Recognized

Ignored (spoilage)
= >(2000+1500) - 4000

Spoiledd are recognized

CC
30,000

140,000
 170,000

,400 - 10,000(WIP, Beg.)

CC
9,600.00
72,000.00
81,600.00
178,800.00

9,600.00 19,300.00
6,750.00 6,750.00
51,750.00 109,250.00
1,890.00 3,990.00
8,235.00 17,385.00
3,375.00 22,125.00

WIP Beg
Completion
S&C
Normal
 Total cost of transferred units
Completed Units
Total cost per unit

CC
9,600.00
72,000.00
81,600.00
178,800.00

4,800.00 16,950.00
7,200.00 7,200.00
55,200.00 111,090.00
2,016.00 4,057.20
8,784.00 17,677.80
3,600.00 21,825.00
Following formula na Applied overhead = POHR x Actual Direct Labor
+ Manuf. OH
+ 48,000
/ Est. DL
/ 17,900

/ Est. DL
14,400
% EUP Cost Per EUP
DM CC DM CC DM CC
100% 75% 10000 7500
25% 2500
100% 100% 28400 28400
100% 100% 1920 1920
100% 100% 1680 1680
100% 65% 8000 5200
 50,000 47,200 3.00 3.60

% EUP Cost Per EUP

DM CC DM CC DM CC
1.00 0.40 5,000.00 2,000.00 1.94 4.80
35,000.00 32,000.00 2.50 2.25
40,000.00 34,000.00

0.40 2,000.00
1.00 0.60 5,000.00 3,000.00 1.94 4.80
1.00 1.00 23,000.00 23,000.00 2.50 2.25
1.00 1.00 840.00 840.00
1.00 1.00 3,660.00 3,660.00
1.00 0.20 7,500.00 1,500.00
40,000.00 34,000.00

19,300.00
6,750.00
109,250.00
3,990.00
 139,290.00
28,000.00
4.97

% EUP Cost Per EUP

DM CC DM CC DM CC
1.00 0.40 5,000.00 2,000.00
35,000.00 32,000.00
40,000.00 34,000.00 2.43 2.40

0.40 2,000.00
1.00 0.60 5,000.00 3,000.00 2.43 2.40
1.00 1.00 23,000.00 23,000.00 2.43 2.40
1.00 1.00 840.00 840.00
1.00 1.00 3,660.00 3,660.00
1.00 0.20 7,500.00 1,500.00
40,000.00 34,000.00
Costs
DM CC

5,040.00 6,050.85 11,091 (29)

24,000.00 18,728.81 (30)
(28)
LQ3
Given: DM 3
DL 2
Variable OH 1
Fixed OH 175,000
Variable S&A 0.5
Fixed S&A 125,000

1st Year
Produced 50,000
Sold 40,000
Price/Unit 18

2nd year
Produced 25,000
Sold 35,000
Price/Unit 18

Solution: Product Cost Per Unit

Year 1 DM 3
DL 2
Variable OH 1
Fixed OH 3.5
Product Cost/Unit (AC) 9.5

Year 2 DM 3
DL 2
Variable OH 1
Fixed OH 7
Product Cost/Unit (AC) 13

COGS
Year 1 Total Sales 720000
Less: VC
Beg. Inventory 0
DM 150000
DL 100000
Variable OH 50000
Total COGAFS 300000

Total Ending Inventory of Year 1

 Ending Inventory 10,000
Product Cost/Unit (AC) 9.5
Ending Inventory 95,000

Total Fixed Manufacturing Overhead

Fixed OH 3.5
Ending Inventory 10,000
Defered in Ending Inv. 35,000

COGS under VC
Year 1 Total Sales 720000
Less; Variable Costs
Beg. Inv 0
DM 150,000
DL 100,000
Variable OH 50,000
Total COGFS 300,000
Ending Inventory - 60,000
Total COGS 240,000
Variable S&A 20000 260,000

Total Sales Revenue During Year 2

Sold 35,000
Price/Unit 18
630,000

Gross Margin
Year 2 Total Sales 630,000
Less: COGM
Beg. Inv 95,000
DM 75000
DL 50000
Variable OH 25000
Fixed OH 175000
COGAFS 420,000
Less: Ending Inv. 0
COGS 420,000

Gross Margin 210,000

Less: S&A
Variable S&A 17500
Fixed S&A 125,000 142500
Operating Income 67,500
What is the gross profit of Product Y assuming the physical measure method is u
X Y Total
2,000 6,000 8,000
0.25 0.75
12000 36000 48,000
5,000 10,000
17000 46000

Sales Revenue 48000 84000

COGS
DM 3
DL 2
Variable OH 1
Product Cost/Unit (VC) 6

DM 3
DL 2
Variable OH 1
Product Cost/Unit (VC) 6
Contribution Margin
Total Sales 630,000
Less: VC
Beg. Inv. 60000
DM 75000
DL 50000
Variable OH 25000
COGAFS 210000
Less: End. Inv 0
COGS 210000
Add: Variable S&A 17500 227500
Contirbution Margin 402,500

Less: Fixed Cost

Fixed S&A 125,000
Fixed OH 175,000 300,000
Operating Income 102,500
physical measure method is used to allocate joint costs?
Fabrication Activity Pool
Wages 340,000 30% 102000
Depreciation 160,000 15% 24000
Occupancy 220,000 15% 33000
159000
Fabrication Cost Pool 30,000
5.3 Per Machine Hours

Wages 300,000 20% 60000

Depreciation 200,000 40% 80000
Occupancy 140,000 30% 42000
182000 Cost in Total

Assembly 436,240 28,000 15.58 Per Machine Hours

Processing Order 60,896 1,600 38.06 Per Order
Inspection 82767 1410 58.7 Per Inspection Hours

Machine Hours 7478.4

Order 1903
Inspection-Hours 1761
11142.4

DM 2921
DL 10563.9
24627.3
Sales 29118
4491 Product Margin