Ateneo de Zamboanga University

School of Management and Accountancy

Cost Accounting and Cost Management, Part II

Assignment 1: Process costing – weighted average method and FIFO method

Instructor: Kelvin Jaluag Culajara, BSA, CPA

Problem 1

Solsa Company manufactures clay pots in a two-department process: Assembly and

Finishing. The materials in each of the two processes are added at the start
of production. For January, the following production data and costs were
gathered:

Assembly Department: Units

Beginning WIP inventory (40% complete for direct
labor, 30% complete for overhead) 1,250
Units started in process during the month 17,600
Ending WIP (70% complete for direct labor, 90%
complete for overhead) 720

Assembly Department: Direct Direct Overhead

Costs Materials Labor Costs Total
Beginning WIP inventory ₱ 12,000 ₱ 23,000 ₱ 34,000 ₱ 69,000
Current costs 321,000 543,000 126,000 990,000
₱1,059,00
Total costs ₱ 333,000 ₱ 566,000 ₱ 160,000 0

Finishing Department: Units

Beginning WIP inventory (15% complete for direct
labor, 40% complete for overhead) 250
Units started in process during the month 7,600
Ending WIP (30% complete for direct labor, 65%
complete for overhead) 20

Finishing Department: Direct Direct Overhead

Costs Materials Labor Costs Total
Beginning WIP inventory ₱ 9,000 ₱ 8,000 ₱ 7,000 ₱24,000
Current costs 87,000 76,000 650,000 813,000
₱837,00
Total costs ₱ 96,000 ₱ 84,000 ₱ 657,000 0

Required:
1. Assuming that the company uses weighted average method, prepare a cost
of production report for the Assembly Department and the Finishing
Department, and prepare the required journal entries.
2. Assuming that the company uses FIFO method, prepare a cost of production
report for the Assembly Department and the Finishing Department, and
prepare the required journal entries.
3. Assuming that the company uses weighted average method in the Assembly
Department and FIFO method in the Finishing Department, prepare a cost
of production report with the required journal entries.
4. Assuming that the company uses weighted average method in both
departments, and that the direct materials in both processes are added
at the end, prepare a cost of production report with the required
journal entries.
5. Assuming that the company uses FIFO method in both departments, and that
the direct materials in both processes are added at the end, prepare a
cost of production report with the required journal entries.
6. Assuming that the company uses weighted average method in both
departments, and that the direct materials in Finishing Department are
added at the end, prepare a cost of production report with the required
journal entries.
7. Assuming that the company uses FIFO method in both departments, and that
the direct materials in Finishing Department are added at the end,
prepare a cost of production report with the required journal entries.