Process Costing

Equivalent Production
Exercise: without WIP
Exercise:with Closing WIP
Execise: with Opening and Closing WIP
 A B C Process A
Material 2000 1000 dm 2,000
Labour 1500 700 800 dl 1,500
Manufacturing Overheads 4500 mo 2,250
total 5,750

SGA 2,000 Transfer to B 5,750

Sale of final output 8,500 wip 0
5,750
absorption rate (AbR) 1.5
lc 3000
mo 4500
 Process B Process C Finished Goods
transfer from A 5,750 transfer from B 8,500 sales 8,500
dm 1,000 material 0 less
dl 700 dl 800 cost from FG 10,500
mo 1,050 mo 1,200 -2,000
8,500 10,500 SGA 2,000
NI -4,000
transfer to C 8,500
wip 0 transfer to FG 10,500
8,500 wip 0
 With Closing WIP_ Process A
Units introduced 10,000 Process A
Units complete 6,000 Material 85,000
WIP 4,000 Labour 120,000
Degree of Completion 60% Overheads 150,000
355,000 35.50
FG 213,000
WIP 142,000
355,000
Process Cost
Material 85,000 Process A (with Equivalent Cost)
Labour 120,000 Material 85,000
Overheads 150,000 Labour 120,000
Overheads 150,000
355,000
Finished goods 253,571
No Opening WIP Clsing WIP 101,429
355,000
 degree of completion
doc
fg 6000 100% 6000
wip 4000 60% 2400
8400
cp 42.2619
 With Closing WIP_ Process A
Units introduced 3,500 Process A
Units complete 3,000 Material 24,500
WIP 500 Labour 13,200
Degree of Completion Overheads 9,600
Material 100% 47,300
Labour 60% FG 40,543
Overheads 40% WIP 6,757
47,300
Process Cost
Material 24,500 Process A (with Equivalent Cost)
Labour 13,200 Material 24,500
Overheads 9,600 Labour 13,200
Overheads 9,600
47,300

No Opening WIP
0
 Statement of Equivalent Production
Physical Units Equivalent Units
input output Material Labour Overheads
3,500 3,000 100% 3,000 100% 3,000 100% 3,000
13.51 500 100% 500 60% 300 40% 200
3,500 3,500 3,300 3,200

Statement of Cost
Cost EQ
material 24,500 3,500 7.0
labour 13,200 3,300 4.0
overheads 9,600 3,200 3.0
14

Assignment of Cost
fg 3,000 14
wip 500
m
l
o
0
 With Opening and Closing WIP

Process COST Process A

Opening WIP 225
DOC: Material 100% 180,000
DOC: CC 60% 81,000
Input 275
Finished Goods 400
Closing WIP 100
DOC: Material 100%
DOC: CC 50%
Cost
Material Cost 198,000 Process A (equivalent Cost)
Conversion Cost 163,800
361,800
622,800
 Weighted Average

Statement of Equivalent Production

Physical Units Equivalent Units
Material CC Overheads

0.00
0

Statement of Cost

0.00

Assignment of Cost