Gaceta, Judy Ann M.

BSA 3B
Multiple Choices - Theories:
1. B
2. A
3. B
4. D
5. B

Problem Solving:
1. Jake Department
Conversion
Quantity Schedule Actual WD EP
Units in Process, Beg 2,000
Units Started 8,000
10,000

Units completed and transferred,

including Normal Spoilage 7,000 100% 7,000
Units in process, End 2,500 80% 2,000
Spoilage - Normal 500 500
10,000 9,500

Units cost of conversion P 10,000 + P 75,500 = P 9.00

9,500

Original conversion of units transferred ( 7,000 x 9 ) P 63,000

Add: Cost of spoilage - normal ( 500 x 9 ) 4,500
Conversion cost transferred to the next
department P 67,500
2. Conversion Cost per Equivalent

FIFO METHOD
Conversion
Quantity Schedule Actual WD EP
Units in Process, beg 500
Units Transferred in 2,000
2,500
Units Completed
From in process, beg 500 3/5 300
Units completed and transferred out 1,200 100% 1,200
Units in process, end 300 1/3 100
Normal spoilage 200 100% 200
Abnormal Spoilage 300 100% 300
2,500 2,100

Conversion Cost per Equivalent unit P 3,990 =P 1.90

2,100

Average Method
Conversion
Quantity Schedule Actual WD EP
Units in Process, beg 500
Units Transferred in 2,000
2,500

Units Completed and transferred out 1,700 100% 1,700

Units in process, end 300 1/3 100
Normal Spoilage 200 100% 200
Abnormal Spoilage 300 100% 300
2,500 2,300

Conversion Cost per Equivalent unit P610 - P3,990 = P 2. 00

2,300

3. Conversion costs components of normal spoilage

FIFO METHOD AVERAGE METHOD

Normal Spoilage units 200 Normal Spoilage units 200

 Multiply by: Unit cost
Multiply by: Unit cost P 1.90 P 2.00
Conversion cost of Conversion cost of
normal spoilage P 380.00 normal spoilage P 400.00

4. Conversion cost components of abnormal spoilage

FIFO METHOD AVERAGE METHOD

Abnormal spoilage units 300 Abnormal spoilage units 300

Multiply by: Unit cost P 1.90 Multiply by: Unit cost P 2.00
Conversion cost of Conversion cost of
abnormal spoilage P 570.00 abnormal spoilage P 600.00

5. Bulls Company
Quantity Schedule Actual
In process, beg. 1,900,000
Units started 2,000,000
3,900,000

Accounted for as follows:

Units completed 2,700,000
Units in process, end 800,000
Defective Units 400,000
3,900,000

Units in process, beg. 1,900,000