ReSA The ReviewSchool of Accountancy R. Papa Cor. S. H. Loyola Sts. , Sampaloc, Manila Tel Nos. 734-39-89 & 735-98-07 ADVANCED FINANCIAL ACCUNTING Cost Accounting & REPORTING - Process Costing Process Costing. this method is used when products are manufactured under the conditions of continuous processing or mass production methods Where the products manufactured within a department (or cost center) are homogenous (similar products} with equal amount of materials, labor, and overhead applied to such products. These conditions often exist in Sndustries that produces like-kind of preducts or conmedities such as paper, lumber, pipe petroleum, textiles, steel, wire, bricks, cement, flour, sugar peanut butter, meat, sugar, breakfast cereals, linoleum, leather, nylon, baby foods, paint, tires and tubes, qlass, mining, and canneries. Process costing is also used by firms that manufacture simple machined parts and small electrical parts (nails, nuts ang boits, light bulbs, semiconductor chips, ‘and floppy disks), and by assembly-type industries (automobiles, engines, tape recorders, personal computers, and household appliances. Some utility companies such as gas, water, and electricity and no-manufacturing businesses such as food preparation in fast-food, restaurants, mail sorting in post offices, check processing in banks, and student registration in college. In process costing, the oust accumulation of materials, labor and evarhoad must be by department or cost center. The cost assigned to each unit is determined by dividing the tetal cost charged to the cost center by the number of units produced. Tos. centers are usually departments but it may also be processing centers within the departments. The primary requirement is that all the products manufactured within the cost center during the period must be the same (similar in nature or homogenous) otherwise, process costing will result in a distortion of product cost. In manufacturing firms, production can take place in several departments, Each department performs a specific operation or process Yeading to the completion of the product. For example, the first department typically performs the start.ng phase of work on the product, such as cutting, stamping, molding, or shaping tne product or components parts. When the work in the first department is completed, the units are transferred to & Second department. The second devar:ment then performs its work, such as SeSempling, sanding, painting, or f2ckaging, and transfers the units on the which performs, its work and so forth, until the units are next department, ferred co the finished goods storeroom. finally completed and transi Methods of Treating Beginning Inventory in Process Costing (Cost Flow Assumptions) : 1. FIFO Method. Only the costs incurred this period are allocated between finished goods and ending vork-in process. Beginning inventory costs are from current period costs maintained separately Finished Goods this pericd cre costed separately as either started last period and completed this per/od or started this period or completed this period. 2. Weighted Average Mathod. It averages ali materials, labor and overhead both {incurred in the beginning work-in-process and those incurred this period. ‘Thus, no differentiation is made between goods started in the preceding and the current period. The result of such computation is that the FIFO Method EUP (equivalent Units of production) differs from the Weighted Average Method EUP by the ‘mount of EUP in beginning work-in process. Methods of Application of Costs Eluments in Process Costing: 1. Even Application of Conta - materials, labor, and overhead were applied at the same sate throughout the production, thereby, Tendering the equivalent units of production (EUP) to be of equal 2. Uneven Application of Coste ~ materials, labor an overhead may be applied at different stages of production rendering their equivalent aRles of production te be of unequal amounts AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING page 2 I - Equivalent Production L.Department IZ of Charity Manufacturing Company presents the following production data for the month of May: Opening inventory, 3/8 conplete [4,000 anita] Started in proces —- units Transferred anita [closing inventory, coupicte units a incomplete units What are the equivalent units of production for FIFO and Average Method the month of May? FIFO Average FIFO Average A. 12,500 13,000 ©. 12,500 14,000 B. 17,000 12,500 D. 5,000 14,000 Bart Company adds materials et following information pertas Apri the end of the process in Department M. The to Separtment M's work-in-process during Units Work-in-process, 4/1 ‘4 plete, conversion costs) 3,000 ‘Started in January ~ 25,000 [Completed = 20, 000 Work-in-process, 4/30 (76% complete conversion costs) 8,000 a age Materials Conversion Conversion A. 28,000 28,0 26, 000 Bl 20,000 20,000 26,000 26,000 €. 20,000 24,400 20,000 26,000 D. 24,200 20,009 26,009 20,000 3. Wentworth Company makes tabric-ccvered hatboxes. The company began Septenber with 500 boxes in process that were 100 percent complete as to Gerdboard, 80 percent complete 2s to cloth, and 60 percent complete as to SSkversion costs. During the month, 3,300 boxes were started. On Septenber So.'350 boxes were in process (100 percent complete as to cardboard, 70 pelcent complete as to clcth, and $5 percent complete as to conversion Beste), Osing che FIFO method, what sro equivalent units? Materials Cloth converesen A. “3,295 3,342.50 B. 3,595 3,542.50 ce 3,595 3,542.50 D. 3,298 2,242.50 4. Thomson Company makes small metal containers. The company began December with 250 containers in process that were 30 percent complete as to Inaterial and 40 percent complete as to conversion costs. During the month, §,000 containers were started. At month end, 1,700 containers were still in process (45 percent complete as co material and 80 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for materials ani conversion costs? Materials Conversion Materials Conversion Costs aL 4,315, 4,910 Cc. 4,485 3,890 B. 4,440 4,810 D. 4,315 4,810 Items 5 and 6 are based on the following question: Duke Company transferred 5,500 units to Finished Goods Inventory during” September. On September 1, the company had 300 units on hand (40 percent complete as to both material and conversion costs). On September 30, the company had 800 units (1U percent complete as to material and 20 percent complete as to conversion costs). 5. The number of units started and completed during September was: 2. 5,200 c. 8,800 AFAR-14 B. 5,380 D. 6,300ADVANCED FINANCIAL ACCOUNTING & REPORTING 6. The number of units started during September was: A. 5,200 c. B. 5,380 7. Dowell Company started 9,000 uni 7,000 finished units and ended the period with 3,500 uni percent complete as to boch material and conversion costs. in Process Inventory units were A. $00 : B. 600 D 8. Carter Company uses 2 weighted avel added at the start of production. production and had 4,500 units in process at tl uwersion costs. were 60 percent complete as to 5,500 6,000 » February. The company transferred out ts that were 40 Beginning Work 1,500 2,000 rage process costing system. Material is Dixie Company started 13,000 units into he start of the period that If Dixie transferred out ending Work in Process Inventory? 21,750 units, how many units were in A. 1,250 <. 3,500 B. 3,000 D. 5,750 9. The Wiring Department is the second stage of Flem Cot the BWIP contained 25,000 units which were 60% complete cycle. On May 1, as to conversion costs. During May, the first stage of Fles’s production cycle. On May 31, 804 complete as to conversion costs. 20,000 units which were added at the end of the process Transferred-in Costs Meterials A. 100, 000 325,960 B. 125,000 105,000 c. 125,000 205,000 D. 100,000 105,000 10. Using the same information in No. mpany’s production 100,000 units were transferred-in from EWIP contained Materials Using FIFO method, the EUP on May 32 Conversion Costs ~~ 106, 000 105, 000 121,000 106, 000 10, except that weighted average method is used, the £UP on May 31 were: Transferred-in Costs “Materials Conversion Costs A 100,000 125,00 100, 000 B. 125,000 195,060 105, 000 c. 125,000 108,099 121,000 D. 125,000 125,000 321,000 II - Coste Analysis Items 1 to 3 are based on the following information: Roy Company manufactures product x Department A and B. Department B- 6,000 units ii units in the ending work in ‘Conversion costs for Department B were 50% complete a: n the beginning work in process and 75¢ complete as to the 8,000 process. transferred out of Department B during february 2016 costs relating to work in process (WIP) in a two-stage production cycle in Materials are added at the beginning of the process in to the 12,000 units were completed and An analysis of the and production activity in Department B for February 2016 is as follows: _ aaa Cost Tf fransferred— in [Materials | Conversion wip, February 1: Costs attached B 12, 000 B 2,500 |P 1,000 February activity: Costs Added 29,000, 5,500 | 5,000 1. The cost per equiva: centavo) : Set A. P2.07 B. 2.78 >. 2. The current total unit cost_in this overhead) for product X (roundes cc FIFO Average A. P2.79 P2.78 c. B. P2.78 —P2.77 D. 3. The total unit. cos nearest centavo) ez_equivale FIFO Average AL P46 P4.83 ©. c. p2.7@ © P2.77 Bb Tent from the preceding department (rounded to nearest FIFO Average 2.77 P2.78 Pz.05 P2.07 department (for materials, nearest centavo): FIFO__Average P2.77 P2.78 2.78 P2.79 for February was: (rounded to FIFO_Average z.77 P2.78 4.83 e416 AFAR-14[ADVANCED FINANCIAL ACCOUNTING & REPORTING page 4 4. The total cost per equivalent unit transferred-out for February 2016 of product X, rounded to the neres centavo, wa FIFO Average EIFO_ Average . A. P2.77 82.77 ¢. ez.77 82.78 B. 2.78 77 DP. e2.78 2.78 Items 5 to 19 are based on the following informatio on April 1, 2016, the Collins Company had 6,000 units of work-in-process in Department B, the second and last stage of their production cycle. The costs attached to these 6,000 units were P12,000 of costs transferred-in from Department A, P2,500 of material cost added in Department B and P2,000 of conversion cost added in Department 3. Materials are added in the beginning of the process in Department B. Conversion costs was SOt complete on April 1, 2016. During April, 14,000 units were transferred-in from Department A at a cost of P27,000: and materials costs of 23,500 and conversion costs of P3,000 were added in Department B. On April 30, 2016, Department B had 5,000 units of work-in-process 60% complete as to conversion costs.The costs attached to these 5,000 units were P10,290 of costs transferred-in from Department A, P1,800 Sf material costs added in Uepactment B and P800 of conversion costs added in Department B. Using FIFO Method! 5. What are the unit costs (rounded to nearest centavo)? (Current Department) centavo) : A. P2.53 c. 20.58 B. P2.38 DL P0145 The cost of the work-in-process, beginning, finished and transferred to the next department (roundec to nearest peso): A. PO fc. P26, 500 B. 2600 D. P17, 100 The total cost of the units received, finished and transferred to next department (rounded to nearest peso): A. P17,100 7,090 B. P21,420 D. P21,420 9. The total cost transferred out (rounded to nearest peso): A. 22,020 c. £37,950 B. P34,020 DB. P36, 520 10. The portion of the total cost of ending work-1n-process attributable t) Transferred-in Materials onversion Costs AL P9, 650 PB 600, B. P9, 750, P ea c. 29, 000 2 810 D. P9, 650 P 840 11. The total cost of ending work-in-process (rounded to nearest peso): A. P 1,850 cc. P11,500 B. P 9,650 D. P21, 420 12. The total cost to be accounted for (rounded to nearest hundred): A. P22, 000 cc. Pat, 000 B. P34,000 D. PS0,000 Using Weighted-Average Method: : 13, What are the unit costs (rcundea te nearest centavo)? (preceding Dept.) (Current Department) Teansferred-In Materials Conversion costs a. PL.93 P25 P.20 By P95 P.30 2.28 c. P1890 P30 P27 D.Pl.70 2.25 e.29 AFAR-14[ADVANCED FINANCIAL ACCOUNTING & FEPORTING page 5 14. The total unit cost per equivalent unit for April was (rounded to nearest centavo) : A. P2.53 c. Po.5e B. P2.38 D. P0.45 15. The cost of the work-in-process, beginning, finished and transferred to the next department (roundsd to nearest peso): ‘A. PO Cc. P16, 500 B. P600 b. P27,100 16. The total cost transferred our (sounded to nearest peso): A. 22,020 5. P27, 950 B. P34, 020 D. P38, 520 ding work-in-process attributable to: ersion Costs . The portion of the total cost of Transferred-In Mater. A. 9, 650 7250 600 B. P3,750, PL, S06 P 840 c. 9,000, P1, 500, P 810 D. P9, 650, PL, 750 > 840 18. The total cost of ending vork-in process (rounded to nearest peso): A. P 1,850 c. P21, 500 B. P 9,650 D. 712,090 19. The total cost to be accounted for (rounded to nearest hundred): A. 22,000 cc. P38, 000 B. P34,000 1B. P50, 000 20. For the month of May 2016, tac Finishing Department of Apple, Inc. had in opening work-in-process $0! compiete units and in ending work-in-process 50% complete units. Relat. z the month follow: Conversion 7 _ units Costs Work-in-process 50,000 | P 88,000 Units started and costs incurred during May 270,000 | $72,000 Units completed and transterred during May 200,000 If the company uses FIFO costing, the conversion cost of the work-in- process at the end of May would be: A. P132,000 ¢. B, P156, 000 176,000 254,000 21. Using the same information in No. 20 and using average method (unit cost should be rounded to the nearest centavo), the conversion cost of the work-in-process at the end of May would be: ¢. P146, 400 €. P176,000 D.P152, 400 D. P254,000 22. Maurice Company adds materials at the beginning of the process in the Forming Department, which iy tne first of two stages of its production cycle. Information concerning the materials used in the Forming Department in Aprii is as follows: Waterials a _ units costs Work-in-process Fiz, 000 ~TP6, 000 Units started 100,000 | $1,120 ‘Units completed and 88, 000 decimals), what was the material cost of Using FIFO method (using ti WIP at April 30? A. P 6,120 cc. p12, 240 B, P11,040 D. P12, 269 23. Using the sane information in No. 22 and using weighted average method, what was the material cost of WIP at April 30? c. P 6,120 £12,400 D. P1L,0@ 2. P12, 240 AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING page 6 24. Following are the data for September taken from the cost records of the Mixing Department, Fair Manufacturing Company which uses the average costing method. Work-in-process, August 31 (all materials, 50® conversion costs) _ 1,000 units Put_inte process during the month 0,000 units Work-in-process, September 30 (all materials, 608 converted) _ 1,400 units costs: Work-in-process, August 31: Materials, wil -P 24,000 Labor... ~ 15,000 Factory overhead, 7,600 Put into process during t Material Som . 7 -P251,000 Lab OP en - 193, 000 Factory overhead. oe 7 149,000 Assuming no lost units, the unit cost for labor was: A. P10 c. P20 B. PIS D. P25 28. Using the same information in No. 24, the total cost of the units completed and transferred to the next department was! . A. 576,000 ©. 640, 400 B. P605, 400 D. 693,800 26. Using the same information in Ne. 24 compute the total cost of the work- in-process on September 30 was ¢ A. P29, 400 ¢. P 64,400 B. P46, 600 D. P103,800 27. Samahan Inc. manufactures a highly sensitive smoke alarms. The company usesthe FIFO method for process costing and for costing goods sold. In costing finished goods, the unit cost for units completed from the work in process inventory at the beginning is kept separate from the unit cost of ‘smoke alarm started and completed during the month. The total manufacturing costs for the month of dune is P264,000. There were 2,750 units completed and transferred. The inventories at the beginning of June are as follows: ‘Smoke alarm in process, estimated 80% complete 1,250 units P128, 000 Smoke alarm on hand (completed) 600 units) 76,800 ‘The inventories at the end of June sre: smoke alarm in process(estimsted 508 complete) 500 units ‘Smoke alarm on hand (completed) 700 units ‘The cost assigned to the work in prcess inventory at. the end is: A. P32,200 - 264,000 B. P33,000 D. P66,000 28. Using the same information in No. 27, the cost assigned to the finished goods inventory at the end is: A. B92, 400 B. P79, 200 300 29. Information for the month of Jenuary concerning Department A, the first stage of Ogden Corporation's production cycle is as follows: = Materials | Conversion Bae 8,000 |P 6,000 Current costs - 40,000 32,000 Total costs B48,000 | P 30,000 Equivalent unite using sveraye method [160,000 [ 35, 000 Rverage unit p48 [P40 90,000 units 70,000 units | Goods completed Te : AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING page 7 Materials are added at the beginning of the process. The ending work-in- conversion costs. How would the total costs process is 50% complete us using the average method? accounted for be distributed, Goods CompletedEnding WIP Ay 30 Bl. 32. A. P79, 200, B. P79, 200 c P86, 000 D. P86, 000 £ Simon Company is_as follows: sfer~ Conversion | materials | costs Total [Pp -0-| P 3,400] 6,300 | transferred-in 17,500] 25,500 15,000 | 58,000 OG] 44,300 | 920,400} 25,500} P18, 400 | P64, a | completed 37,000} 3,009, Conversion costs were 20% complece as to the beginning work-in-process and 40% complete as to the endins werk-1n-process. All materials are added at the end of the process. Siron Company uses the weighted average method. The portion of the t transferred-in costs ist ALB -0- c. 1,530 B. P1,500 8. P1,650 1. cost of ending work-in process attributable to 1 manufactures only one product in which the raw The Glorious Corporati cesses A, B, and C in that order before material must pass thzoug completion. Inventoriesof Process ¢ ad 0: Finished Goods on October 1 were as follows: Process C - 1,200 unite, 2/4 completed P4,200 Finished goods ~ 1,000 units at P3.00 per unit During October the following trensactions were completed: 2,000 units with « value of P5,000 were transferred from Process B. Direct labor epplicd to vrocess G during October was Pa, 100. Overhead costs for O.tber applied to Process C were P3, 200. Inventories on October 31 are as follows: Process C ~ 600 units, % completed Finished goods - i,300 units Using FIFO method, the value of Process C inventory in process for October 31 is: A. P4,200 c. PS, 400 B. P3,500 B. P2,400 During March, Bly Company eat Y equivalent unit product costs, computed under the weighte [Waterials— Fi Conversion costs 3] ‘Trans ferred-in - 5) Materials are introduced at the end of the process in Department Y. There were 4,000 units (40% complete as to conversion costs) in WIP at March 31. The total costs assigned to the March 31 WIP inventory should be: 36, 000 ce. P27, 200 7 AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING page 8 III - Lost Units Materials are added at tne stert of the process in Cedar Company’ s blending department, the first stage of the production cycle. The following information is available for July. 1 units Work in process, July 1(¢0s complete as to conversion cost 60, 000 started in duly 150,000 Transferred so he next depactrent 119,000 Lost. in product {or 30,000 Work in process, Juiy 21 (50% complete (as to conversicn costs) 70,000 Under Cedar’s cost accounting system, the costs incurred on the lost units are absorbed by the remaining goods units. What are the equivalent units for the materials unit cost calculation? EIS. AVERA FIFO (AVERAGE A. 180,000 120,900 c. 180,000 210,000 B. 120,000 160, 000 ®. 140,000 210,000 Using the same information in jie. 1, what are the equivalent units for the conversion cost unit calculation? EIEO AVERAGE FIFO AVERAGE A. 145,000 103, 65 2 135, 000 175,000 B. 109,000 145,000 D. 109,000 175,000 3. Basic Chemical Industries, Inc. produces product through a continuous Process in different departments (FIFO). Each department has an independent cost accountant who is tasked with cumulating costs and the Preparation of reports for the department assigned to him. You have been assigned as cost accountant for Dsjactment A.Production data of Department. A for the month of September, 201. ware as follows: Work in process, September i 14,000 kg. Percentage of Completa Toe Started in process 70,000 kg. Work in Process, September 20 12,000 kg. Percentage of completion 608 Lost units (normal) at end of process 2,000 kg. In this department, costs aze applied as follows: Materials- added at start Labor and overhead ~ evenly distributed. Department cost incurred in September was: Materials 56,000, Labor 17,350 overhead 13,880 Work in process cost, September 1 8,000 Compute the current total unit for materials, labor and overhead. aA. P1.23 c. PL.17 BL P1.04 o. PL.25 4. Using the same information in No. 3, what is the cost of the: Units transferred Process, September 30 AL P82, 390 3, 600 B. 81,830 5,600 c. 72,000 12,840 D. 390 12,840 IV - BUP Computations: Normal and Abnormal Loss (Continuous Loss) ‘The Northern Division of Cagayan Valley Paint produces environmental paints In which spoilage takes place on a continual basis. Management considers normal spoilage to be 0.5% or less of gallons of material placed into! production. ‘The following operating statistics are available for June 2011 for the paint “ITALIANO”: Beginning inventory (203 conplets as to material; 208 complete as to conversion} wom. 8,000 gallons Started during June... -- 180,000 gallons Ending inventory (60% compiete as to material; 70% completeas to conversion} connnennmn 4,000 gallons Spoiled ee nineniinnnnnn - 1,400 gallons AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING page 9 Determine the folloring: 1. How many gallons were transferred out? A, 180,000 c. 182,600 8B. 181,200 D. 188,000 2. The normal spoilage occurred: A. 0 c. 900 B. 500 D. 1,400 3. The abnormal spoilage occurred? A. 0 c. 900 B. 500 D. 2,400 4. What are the FIFO equivalent units of production for materials? For conversion costs? Materials Conversion Materials Conversion A. 183,900 183,500 c. 185,500 183, 500 B. 183,900 185, 900 D. 185,500 1185, 900 5. What are the Weighted Average Method equivalent units of production for materials? For conversion costs? Materials Conversion Materials Conversion A. 183, 900 183, 500 c. 185,500 183, 500 B. 183,900 185, 900, D. 185,500 185, 900 6. How should normal spoilage be handled? A. Product costs C. Allocated between CGS and Expenses B. Period costs D. Ignore 7. How should abnormal spoilage be handled? A. Product costs C. Allocated between CGS and Expenses B. Period costs D. Ignore V - Normal & Abnormal Lost (End of Process) Given for a certain process and all materials are added at the start of the production while conversion costs were applied evenly throughout the production: Beginning work-in process, 2/5 convertec 500 units Transferred-in.. 2,000 units Normal lost... 200 units Abnormal lost... 300 units Goods completed and transforred out... 1,700 units Ending work in process. 1/3 converted "300 units Beginning Added this Inventory period Costs charged to the department: Costs from preceding department... P 812.50 PB 1,000.00 Materials. eu - 750.90 2,000.00 Conversion costs. 3,990.00 10.00 All lost units occur at the eng of the process. 1. The equivalent units of producticn for materials: FIFO Average FIFO Average A. 2,500 2,000 c. 2,500 "2,500 B. 2,500 2,500 D. 2,000 2,500 2. The equivalent units of production for conversion costs: FIFO Average Average A. 2,300 2,100 c. 2,300 "2,300 B. 2,100 2,100 D. 2,100 2,300 3. The materials cost per equivalert unit for: FIFO Average Average A, P1.10 P1.00 & P 1.10 B. 1.00 1.00 D. 1.00 1.10 ‘The conversion cost per equivalent unit fo! FIFO Average FIFO Average A. P2.00 P2.00 c. P2.00 P 1.90 B. 1.90 1.90 DB. 1.90 2.00 5. The normal lost per equivalent anit: FIFO Average FIFO Average A. P45 P40 c.P.40 P .40 B. 45 45 DB. .a0 245; 6. The total cost per equivalent unit: FIFO Average A. P4,275 P3.800 c. B. 4.275 4.275 D.ADVANCED FINANCIAL ACCOUNTING & REPORTING page 10 7. The total cost transferred to next department: FIFO Average FLEO Average A. P7,502.50 P7, 267.50 ¢. 27,267.50 P7,267.50 B, 7,267.50 7,267.50 D. 7,267.50 7,502.50 8. The unit cost transferred to next dep3 EIFO ‘Average Average A. P4413 Pa.a13 ee 4.275 B. 4.275 4.273 D. 4.275 4.413 9. The cost of the work-in-process, ending as to preceding department: FIFO Average FIFO Average A. P2i7.50 150.00 c. P150.00 217.50 B. 217.50 217.50 D. 150.00 150.00 10. The cost of the work-in-process, ending as to materials: FIFO Average EEO Avera ‘A, 330.00 300.00 c. 300.00 300.00 B. 330.00 330.00 vo. 300.00 330.00 11. The cost of the work-in-process, ending as to conversion FIFO Average EIEO Average A, 200.00 P190.00 c. p200.00 P200.00 B. 190.00 190.00 D. 190.90 200.00 12. The cost of the work-in-process, arding: FIFO Average Average A. P640.00 747.50 c. 50. B747.50 B. 640.00 640.00 DL 747.50 640.00 13. The cost of lost units chargeable to product costs: EIFO Average EIEO Average A. P6B0.00 —P765.00 c. P1,020.00 1,147.50 B. 765.00 680.00 D. 1,147.50 1,020.00 14. ‘The cost of lost units chargeable to’ period costs: EIEO Average FIEO Average A. 680.00 765.00 c. P1,020.00 P1,147.50 B. 765.00 680.00 D. 1,147.50 1,020.00 VI - Normal and Abnormal 3 Steelman Industries manufectures wood furniture. In the Lamination Department, varnish is added when the goods are 60 percent complete as to. overhead. The units that are spoiled during processing are found upon inspection at the end of production. Spoilage is considered discrete. Production Data for May 2016 Beginning inventory (608 cumplece as to labor, 70% 2,000 units complete as to overhead, Transferred in during month 14,900 units Ending inventory (40# complete as to labor, 208 complete 3,000 units ‘as to overhead) Normal spoilage (found during final quality inspection) 200 units Abnormal spoilage-found at 30% completion of direct 400 units Tabor and 158 of conversion; the sanding machine was misaligned and scarred the chairs) ALL other units were transferred to ‘inished goods Cost Data for May 2016 Beginning work in process inventory: Prior department costs P 15,020 varnish 1,900 Direct labor 4,388 overhead 11,044 P 32,352 current period cost: Prior department costs . 137,080 varnish 14,030 Direct labor 46,000 Overhead 113, 564 310, 674 Total costs to account for 1. The equivalent units of production ‘or materials: FIFO Average FIFO Average A. 11,500 13,500 c. 11,500 11,500 B, 13,500 11,500 D. 13,500 13,500 2. The equivalent units of production for’ Labor: "FIFO Average FIFO Average A. 13,220 14,820 Cc. 14,820 13,220 B, 14,820 14,820 D. 13,220 13,220 AFAR-14[ADVANCED FINANCIAL ACCOUNTING & REPORTING page 11 3. The equivalent units of production for overhead: FIFO Average FIFO Average A, 12,760 14,160 c. 14,160 12,760 B. 14,160 12,760 D. 12,760 12,760 The materials cost per equivalent unit for? FIFO Average FIFO Average A, PI.22 P1168 c. P18 =P 1.22 B. 1.22 1.22 pb. 2.18 1.18 5. The labor cost per equivalent unit fo! FIFO Average FIFO Average A, P3.48 | P3.40 c, P3.40 BP 3.48 B, 3.48 | 3.48 Dp. 3.40 3.40 6. The overhead cost per equivalent unit for: FIFO Average Average A..P8.90 PB.80 c. P6.60 P 9.90 B. 8.90 8.90 pb. 8.80 8.80 7, Bhe cost per equivalent of transferred-in (from preceding department! FIFO Average FIFO Average A. P9.20P9.00 c. 3,00 P 9.20 B. 9.00 9.20 0. 9.00 9.00 8. The total cost per equivalent unit: FIFO Average FIFO Average A, P22.80 P22.38 c. p22.38 P22.80 B. 22.80 22.80 D. 22.38 22.32 9. The total cost transferred to next department: FIFO Average FIFO Average A. P301,284 302,130 c. p302,130 P301, 284 B, 302,130 302,130 D. 301,284 302,284 10. The unit cost transferred to next department FIFO Average EIFO average A. P22.65 22.72 c. 722.72 P22.65 B. 22.65 22.65 bo. 22.72 22.72 aie Ine cost of the work-in-process, ending as te preceding department: FIFO ‘Average Average A. P27,600 —P27,000 c. 27, 600, BL 27,600 27, 600 >. 36,360 12. the cost of the work-in-prcvess, ending as to labor: EIFO Average FIFO Average A. P4176 P4,080 cc. Pk,080 PA, 176 B. 4,176 4,176 a. 4,080 4,080, 1a. the cost of the work-in-process, anding as to overhead: EEO ‘Average FIFO Average A. P5, 340 P5, 280 c. P5,280 5,340 B. 5,340 5,340 b. 5,280 5,280 14. me cost of the work-in-process, ending: EIEO ‘Average FIFO Average A, P37,116 P36, 360 c. 36,360 P37, 116 B. 37,116 37,116 D. 36,360 33, 360 15. ine cost of lost units chargeable to normal lost: ETFO ‘Average FIFO Average A. P4560 P4,476 c. Pa,476 PA, 560 B. 4,560 4,560 2. 4,476 4,476 16. "the cost of lost units chargeable to abnormal losts: FLEO Average FIFO Average A. P4632 P4536 c. Pa,536 PA, 632 B. 4,632 4,632 D. 4,536 4,536 ee8 ame best way to teach character is to have it around the house. * ore Cae Pe tay truer neavare of a man than by what he does, it mast be by ‘wiat he giveo.* auan for the sake of gutting a living forgets to live.* ame diftermos between personality and character: Personality is what you eee tote of people are srocnd: Character is vhat you are when everybody goes hone* to horse gets anywhere until he is harnessed. Ho 1ife grows great until 1 We focused, dedicated, and disciplined.* AFAR-14ADVANCED FINANCIAL ACCOUNTING & REPORTING 1. Equivatent Production AFAR-14 Soll ‘Acid. For As Follows IP, beg. FBT Started. Fond T in Process, end. FIFO. Quantity Schedule: IP, beginning Slorted In Process ‘Accounted For As Follows: 1, beg. FAT Started, FondT in Process, end __ Average ‘Quantity Schedule; IP, beginr Started in Process ‘Accounted For As Follows FandT, In Process, end FEO. . —— ‘Quantify Schecke: ‘Asiva [WO TP, beginning 25,000 Rec'd from PO/iransferedin_ ‘Accounted For As Fallows: iP. beg. F &T : woe | 10,000 Received FandT Toox | 80,000 in Process, end - ‘80% | 14000 | ; = Toso 10. Average 7 ity Schedule: wT seco} 25,000.ADVANCED FINANCIAL ACCOUNTING & REPORTING AFAR-14 Sol2 N= Cost Anotysis Nos. 5-12: FIFO ‘Guonfty Schedule: IP, beginnin — Rec'd from PD/iransferredin ‘Accounted For As Follows: 1P, beg. FBT. SF 7 %. M1 6 8. to. 12, Nos. 13-19: Average ‘Quantity Schedule: wo pce | IP, beginning Rec'd from PO/iransfered.in 13, 15, 7. 19. 4. V— Normal and Abnorma! Lost Units FIFO _ ‘Quaniily Schedule: —_—— Ip, begin Rec'd from PO/iransienedin ‘Accounted For As Folows +t iP, beg. FAT wo of 361 05 Received , FandT te 7,200 | 100% 1,200 100% | 1,200 infrocess, end = 300] loos | 300 1/81 — ‘T00 NL _ 200 | 100%. 200 | 100%. 200 AL = = 100% | 309 | — 100% | 300 | 2.000 2.100 | Ave je Quoniiy Schedule: IP, beginning | “Rec'd from PD/fronstenectin ‘Accounled For As Follows: Fand =] 00% | ~1.700 | oom | 1.700 In Process, end 7 100% _ 300 V3 100 NL _ 100% 200 100% 200 AL 100% | 209 100% | 3001 at 2.500 2.300ADVANCED FINANCIAL ACCOUNTING 6 REPORTING AFAR-14 S013 Problem III - 1. 8B 2.8 FIFO ee [Quantity Schedule: _____{ Actual | | eem | wo | ep-cc | IP, beginning ~ [Started In Process ‘Accounted For As Follows: |_IP, beg. F &T_ 0| 40% | 24,000 Started, F and T 50,000 | 100% | 50,000 In Process, end _ 70,000 | 50% | 35,000 Normal lost. 0 0 409,000 | Average : [accounted For As Follows: F and T ___ ___| 110,000 110,000 | 100% | 110,000 Jn Process, end "70,000 70,000| _¥/5| 35,000 Normal lost 139,000 | 7 0 1 210,000 | 180,000 145,000 | 3. D ~ (P56,000/70,000 EUP-Mat) = P.80 + [(P17,350+P13,880)/69,400] = P.45 4.0 P 8,000 Po 1,890 1,890 P 9,890 NL; 2,000 x (P.80+P.45) 2500 ‘Transferred: 56,000 x P1.25 _70.000 ‘Total transferred pez In process, end: eae Po CTD: (12,000 x P.80) + (7,200 x P.45) 2.840 pazeao WO | EP-CC | 30% | 4,200] 100% | “56,000 | 60% | 7,200 ‘Normal lost (end) F-24000 | 100% |— 21000 | 100% | —2'090 | = ____| 84,0007 | 70,000 69,400 |ADVANCED FINANCIAL ACCOUNTING & REPORTING AFAR-14 Sol4 Problem Iv - 1.¢ 3.8 2. a.a FIFO uantity Schedules 1P, beginning [Started In Process: ae (Accounted For As Follows: (A, beg. Fac 70% | 5,600 ‘Started, FandT 00% | "774,600 In Process, end 70% | 2,800 ‘Normal lost 0 0. “Abnormal lost = 183,500 Average ‘Accounted For As Flows: es Sandi. = 182,600 | i00%6 | 162,600 | 100% | 182,600 Jo Process, end 60% | 2,400 | 70% | 2,800 ‘Normal lost a ot i a i ‘Abnormal ost 300 0 185,200 | FIFO antity Schedule: 1p, beginning Rec'd from Pre, Dept/T-in ‘Recounted For As Follows: TP, beg. F&T 35 [300 R FandT Tooke [7.200 In Process, end y 100 Normal lost “Bos | 200, ‘Abnormal loz 100% [300 100. Average Quantity Schedule ~ee_ [we [esaber | 1P, beginning a Rec'd from Pre. Dept,/T-in. J ‘Accounted For As Follows: T FandT 100% 1,700 100% 1,700, In Process, end 300_ 41/3 100 ‘Normal lost_ 200 | 100% 200. ‘Abnormal lost aan t0%6 | 300 | 100% asm 2so0 | {2.300 | “The price of success Is hard work, dedication to the job at hang, and the determination that whether wé win woh orl “Keep your dreams alive, Understand to work, determination, and dedication. Remember ;pplied the best of ourselves to tne task at hand”, achiove arything requires faith and belief in yoursolf, vision. hard all things are possible for those who believe.” AFAR-Sol4[ADVANCED FINANCIAL ACCOUNTING & REPORTING AFAR-14 Sol5 Problem VI- Normal and Abnormal Lost Units: FIFO vs. Average FIFO iP, beginning Rec from Pre, Dept Ts Oo} 3% | 400] 30% | 600 R Fant 100% | 11,300 | Too | 73,300 n Process, end ~ 40% | 1,200 | 20% [600 Normal lost t iow | “200 | —i00% | 200 ‘Abnormal lost 30% 320 15% | __60. = 220 [i760 Average > [Quantity Schedule IP, beginning Rec'd from Pre. Dept /T-in ‘Recourted For As Follows Tt F and T 13,500 13,300 | 100% | 73300 In Process, end 3,000 | 1,200 20% ‘600 Normal lost. 00 200 | 100% [200 ‘Abnormal lost - 15% 60 6,210. 14,820 760 spatience ls power. Patience ls net an absence of ection rather i ie “timing” it waits on the right ime 86 ae. for the right prindpies and inthe right way” se crn bavt cn mucniis inaites atti aa: Ry tae