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The document provides information for two problems regarding a paint production company's cost of production report for May. Problem 1 provides incomplete information about units, costs, and percentages for materials, labor, and overhead at different stages of production. Problem 2 provides additional context about the company's normal costing and production processes, and gives complete data for May production including beginning and ending work in process inventory levels. It asks to prepare cost reports and journal entries for May using both the weighted average and first-in, first-out costing methods.

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Kellyjean Intal
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534 views1 page

1

The document provides information for two problems regarding a paint production company's cost of production report for May. Problem 1 provides incomplete information about units, costs, and percentages for materials, labor, and overhead at different stages of production. Problem 2 provides additional context about the company's normal costing and production processes, and gives complete data for May production including beginning and ending work in process inventory levels. It asks to prepare cost reports and journal entries for May using both the weighted average and first-in, first-out costing methods.

Uploaded by

Kellyjean Intal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Assignment 1 – Simple Cost of Production Report

Problem 1: Compute for the missing items:

Actual Materials Labor Overhead


Qty. Schedule
Units WD EUP WD EUP WD EUP
In Process Beginning ? 30% ? 25% ? 55% ?
Started this period 14,000.00
Total ?
Completed and Transferred
In process Beginning ? ? ? 75% 1,500.00 45% ?
Started this period ? ? ? ?
In process End 1,500.00 ? ? ? ? 20% ?
? ? 14,750.00 ?

Materials is added 30% at the start, plus 30% when 50% complete as to labor and the remaining 40% is added only when the
products are 90% complete as to labor.

Problem 2: Springtime Paints makes quality paint in one production department. Production begins with the blending
of various chemicals, which are added at the beginning of the process, and ends with the canning of the paint.
Canning occurs when the mixture reaches the 90 percent stage of completion. The gallon cans are then transferred
to the Shipping Department for crating and shipment. Labor and overhead are added continuously throughout the
process. The company uses normal costing and applies factory overhead at the rate of P3 per direct labor hour.

Prior to May, when a change in the process was implemented, work in process inventories were insignificant. The
change in process enables more production but results in large amounts of work in process. The company has
always used the weighted average method to determine equivalent production and unit costs. Now production
management is considering changing from the weighted average method to the first-in, first-out method.

The following data relate to actual production during May:


Work in process inventory, May 1
Direct material—chemicals P 45,100
Direct labor (P10 per hour) 5,250
Factory overhead ?
Costs for May
Direct material—chemicals P 228,900
Direct material—cans 7,000
Direct labor (P10 per hour) 35,000
Factory overhead ?
Units for May (Gallons)
Work in process inventory, May 1 (25% complete) 4,000
Sent to Shipping Department 20,000
Started in May 21,000
Work in process inventory, May 31 (80% complete) 5,000
Required:
a. Prepare a cost of production report for May using the WA method.
b. Prepare a cost of production report for May using the FIFO method.
c. Prepare the journal entries to record the transactions for May.

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