PROCESS COST SYSTEM (chapter 6)

AMERICAN CHAIR COMPANY

Has 2 departments:
1. Cutting dept
2. Assembly dept

I PRODUCTION DATA (In unit)

DEPT. I DEPT. II
units
Received from previous dept 600 500
WIP, beg inventory 100 180
Finished & transferred 500 580
WIP, end inventory 200 100

II COST DATA ($)

($) ($)
1 WIP, beg inventory:
- From previous dept. 8,320
- From the department:
- Material 1,892 830
- Labor 400 475
- FOH 796 518

2 Cost added during this period:

- Material 13,608 7,296
- Labor 5,000 9,210
- FOH 7,904 11,052

III DEGREE OF COMPLETION:

Dept I Dept II

WIP, end inventory

- Material 60% 100%
- Labor 20% 70%
- FOH 40% 70%

Dept I Dept II
WIP, beg inventory
- Material 80% 40% this data is for
- Labor 40% 20% FIFO method only
- FOH 60% 20%

IV REQUIRED: Cost of Production Report

- Average Method
- FIFO Method
BDP, persediaan awal:
- Bahan baku 80% 40%
- Biaya tenaga kerja 40% 20%
- Overhead 60% 20%
 AMERICAN CHAIR COMPANY
CUTTING DEPARTMENT (DEPT I)
COST OF PRODUCTION REPORT - AVERAGE METHOD

1 QUANTITY SCHEDULE (UNIT)

UNITS IN WIP BEG. 100
UNITS STARTED IN PROCESS THIS PERIOD 600
UNITS TRANSFERRED TO THE NEXT DEPT 500
UNITS IN WIP END. (60% MATERIAL, 20% LABOR, 40% FOH) 200

2 COST CHARGED TO THIS DEPT. ($) TOTAL EQUIVALENT COST

COST UNIT PER UNIT
COST CHARGED TO THE DEPT:
1. BEG WIP:
- MATERIAL 1,892
- LABOR 400
- FOH 796
TOTAL COST IN THE BEG. WIP INVENTORY 3,088
2. COST ADDED DURING THIS PERIOD:
- MATERIAL 13,608 620 25
- LABOR 5,000 540 10
- FOH 7,904 580 15
TOTAL COST ADDED DURING PERIOD 26,512
TOTAL COST CHARGED TO THIS DEPT. 29,600 50

3 COST ACCOUNTED FOR

1. TRANSFERRED TO THE NEXT DEPT = 500 x 50 = 25,000

2. WIP, ENDING INVENTORY:
- MATERIAL = 200 x 60% x 25 = 3,000
- LABOR = 200 x 20% x 10 = 400
- FOH = 200 x 40% x 15 = 1,200 4,600
TOTAL COST ACCOUNTED FOR 29,600

CALCULATION OF EQUIVALENT PRODUCTION: Department 1 (Cutting)

MATERIAL LABOR F. OVERHEAD

UNITS FINISHED 500 500 500

WIP ENDING 200 x 60% = 120 200 x 20% = 40 200 x 40% = 80
EQUIVALENT OF PRODUCTION 620 540 580

CALCULATION OF UNIT COST:

MATERIAL = (1.892 + 13.608) / 620 = 25
LABOR = (400 + 5.000) / 540 = 10
F. OVERHEAD = (796 + 7.904) / 580 = 15
 AMERICAN CHAIR COMPANY
ASSEMBLY DEPARTMENT (II)
COST OF PRODUCTION REPORT - AVERAGE METHOD

1 QUANTITY SCHEDULE (UNITS)

UNITS IN WIP BEGINNING 180
UNITS RECEIVED FROM PRECEDING DEPT. 500
UNITS TRANSFERRED TO THE NEXT DEPT. 580
UNITS STILL IN WIP ENDING (100% MATERIAL, 70% CONVERSION COST) 100

2 COST CHARGED TO THIS DEPARTMENT ($) TOTAL EQUIVALENT COST

COST UNIT PER UNIT
COST CHARGED TO THE DEPT:
1. BEGINNING INVENTORY:
- COST FROM PRECEDING DEPT. 8,320
- MATERIAL 830
- LABOR 475
- FOH 518
TOTAL COST IN BEG INVENTORY 10,143

2. COST ADDED DURING THE CURRENT PERIOD

- COST FROM PRECEDING DEPT. 25,000 680 49.00
- MATERIAL 7,296 680 11.95
- LABOR 9,210 650 14.90
- FOH 11,052 650 17.80
TOTAL COST ADDED DURING THIS PERIOD 52,558
TOTAL COST CHARGED TO THIS DEPT. 62,701 93.65

3 COST ACCOUNTED FOR

1. TRANSFERRED TO THE NEXT DEPT = 580 x 93,65 = 54,317

2. WIP, ENDING INVENTORY:
- COST FROM PRECEDING DEPT = 100 x 49 = 4,900
- MATERIAL = 100 x 100% x 11,95 1,195
- LABOR = 100 x 70% x 14,90 = 1,043
- F. OVERHAED = 100 x 70% x 17,80 = 1,246 8,384
TOTAL COST ACCOUNTED FOR 62,701

CALCULATION OF EQUIVALENT PRODUCTION: Department 2 (Assembly)

MATERIAL LABOR F. OVERHEAD

UNITS FINISHED 580 580 580

WIP ENDING 100x100%= 100 100*70% = 70 100*70% = 70
EQUIVALENT OF PRODUCTION 680 650 650
 CALCULATION OF UNIT COST:
MATERIAL = (830 + 7.296) / 680 = 11.95
LABOR = (475 + 9.210) / 650 = 14.90
F. OVERHEAD = (518 + 11.052) / 650 = 17.80
 AMERICAN CHAIR COMPANY
CUTTING DEPARTMENT (DEPT I)
COST OF PRODUCTION REPORT - FIFO METHOD

1 QUANTITY SCHEDULE (UNITS)

UNITS IN BEG WIP (80% MATERIAL, 40% LABOR, 60% FOH) 100
UNITS STARTED IN PROCESS THIS PERIOD 600 700
UNITS TRANSFERRED TO ASSEMBLY DEPT. 500
UNITS IN END WIP (60% MATERIAL, 20% LABOR, 40% FOH) 200 700

2 COST CHARGDE TO THIS DEPARTMENT ($) TOTAL COST

COST PER UNIT
1. WIP BEG INVENTORY:
- MATERIAL 1,892
- LABOR 400
- FOH 796
TOTAL COST IN BEG INVENTORY 3,088
2. COST ADDED DURING THE CURRENT PERIOD
- MATERIAL = 13,608 : 540 = 13,608 25.20
- LABOR = 5,000 : 500 = 5,000 10.00
- FOH = 7,904 : 520 = 7,904 15.20
TOTAL COST ADDED DURING THIS PERIOD 26,512
TOTAL COST CHARGED TO THIS DEPT. 29,600 50.40

3 COST ACCOUNTED FOR IS AS FOLLOWS ($)

1. TRANSFERRED TO ASSEMBLY DEPT:

a. FROM BEG INVENTORY: 3,088
COST TO COMPLETE BEG WIP INVENTORY THIS PERIOD:
- MATERIAL ADDED = 100 x 20% x 25.20 = 504
- LABOR ADDED = 100 x 60% x 10 = 600
- F. OVERHEAD ADDED = 100 x 40% x 15.20 = 608 4,800
b. STARTED & COMPLETED THIS PERIOD = (600 - 200) x 50.40 = 20,160
TOTAL COST TRANSFERRED TO ASSEMBLY DEPT 24,960

2. WIP ENDING INVENTORY

- MATERIAL = 200 x 60% x 25.20 = 3,024
- LABOR = 200 x 20% x 10.00 = 400
- F. OVERHEAD = 200 x 40% x 15.20 = 1,216 4,640
TOTAL COST ACCOUNTED FOR 29,600

CALCULATION OF EQUIVALENT PRODUCTION:

MATERIAL LABOR

UNITS FINISHED 500

WIP, BEG INVENTORY 100 x 80% = 80 100 x 40% =
420
WIP, END INVENTORY 200 x 60% = 120 200 x 20% =
EQUIVALENT PRODUCTION 540

CALCULATION OF UNIT COST:

MATERIAL = 13,608 / 540 = 25.20

367904344.xlsx
 LABOR = 5,000 / 500 = 10.00
F. OVERHEAD = 7,904 / 520 = 15.20

367904344.xlsx
AN CHAIR COMPANY
DEPARTMENT (DEPT I)
TION REPORT - FIFO METHOD

LABOR F. OVERHEAD

500 500
40 100 x 60% = 60
460 440
40 200 x 40% = 80
500 520

367904344.xlsx
 AMERICAN CHAIR COMPANY
ASSEMBLY DEPARTMENT (DEPT II)
COST OF PRODUCTION REPORT - FIFO METHOD

1 QUANTITY SCHEDULE (UNITS)

UNITS IN BEG WIP (40% MATERIAL, 20% LABOR, 20% FOH) 180
UNITS STARTED IN PROCESS THIS PERIOD 500 680
UNITS TRANSFERRED TO FG 580
UNITS IN END WIP (100% MATERIAL, 70% LABOR, 70% FOH) 100 680

2 COST CHARGDE TO THIS DEPARTMENT ($) TOTAL COST

COST PER UNIT
1. WIP BEG INVENTORY:
COST FROM PRECEDING DEPT 8,320
- MATERIAL 830
- LABOR 475
- FOH 518
TOTAL COST IN BEG INVENTORY 10,143
2. COST ADDED DURING THE CURRENT PERIOD
COST FROM PRECEDING DEPT = 24.960 : 500 = 24,960 49.92
- MATERIAL = 7,296 : 608 = 7,296 12.00
- LABOR = 9,210 : 614 = 9,210 15.00
- FOH = 11,052 : 614 = 11,052 18.00
TOTAL COST ADDED DURING THIS PERIOD 52,518
TOTAL COST CHARGED TO THIS DEPT. 62,661 94.92

3 COST ACCOUNTED FOR IS AS FOLLOWS ($)

1. TRANSFERRED TO ASSEMBLY DEPT:

a. FROM BEG INVENTORY: 10,143
COST TO COMPLETE BEG WIP INVENTORY THIS PERIOD:
- MATERIAL ADDED = 180 x 60% x 12.00 = 1,296
- LABOR ADDED = 180 x 80% x 15.00 = 2,160
- F. OVERHEAD ADDED = 180 x 80% x 18.00 = 2,592 16,191
b. STARTED & COMPLETED THIS PERIOD = (500 - 100) x 94.92 = 37,968
TOTAL COST TRANSFERRED TO FINISHED GOODS 54,159

2. WIP ENDING INVENTORY

COST FROM PRECEDING DEPT. = 100 x 49.92 4,992
- MATERIAL = 100 x 100% x 12.00 = 1,200
- LABOR = 100 x 70% x 15.00 = 1,050
- F. OVERHEAD = 100 x 70% x 18.00 = 1,260 8,502
TOTAL COST ACCOUNTED FOR 62,661

CALCULATION OF EQUIVALENT PRODUCTION:

MATERIAL LABOR

UNITS FINISHED 580

WIP, BEG INVENTORY 180 x 40% = 72 180 x 20%
508
WIP, END INVENTORY 100 x 100% 100 100 x 70%
EQUIVALENT PRODUCTION 608

CALCULATION OF UNIT COST:

367904344.xlsx
 MATERIAL = 13,608 / 540 = 0.00
LABOR = 5,000 / 500 = 40.65
F. OVERHEAD = 7,904 / 520 = 11.88

367904344.xlsx
LABOR F. OVERHEAD

580 580
36 180 x 20% 36
544 544
70 100 x 70% 70
614 614

367904344.xlsx