Problem 1: Cena Company employs FIFO process costing system concerning its only product

which undergoes production in assembly department and finishing department. The following
data for the year ended December 31, 2020 are provided:

January 1,2020
December 31, 2020
Units Started During the Year 400,000
Assembly Department
Units
100,000 units – 40%
completed as to conversion
cost
150,000 units – 80%
completed as to conversion
cost
Cost
Cost of Direct Material- P3M
Cost of Direct Labor – P5M
Cost of Factory OH – P2M
?
DM Cost added during 2020 – P12M
DL Cost added during 2020 – P15M
OH Cost added during 2020 – P13M

January 1,2020
December 31, 2020
Units Started During the Year
Finishing Department
Units
50,000 units – 70%
incomplete as to conversion
cost
30,000 units – 10%
incomplete as to conversion
cost
Cost
Cost of Transferred In – P10M
Cost of Direct Material- P6M
Cost of Direct Labor – P1M
Cost of Factory OH – P3M
?
DM Cost added during 2020 – P30M
DL Cost added during 2020 – P40M
OH Cost added during 2020 – P10M

Additional Information for the year:

a. It is the company’s policy to add conversion cost evenly throughout the period in the two
departments.
b. It is the company’s policy to add all direct materials in the assembly department at the start of
the process while all direct materials in the finishing department are added at the end of the
process.
c. There is no spoilage in both departments.

Requirement:

1. In the assembly department, what is the cost of goods manufactured or cost assigned to units
completed for the year ended December 31, 2020? (37,687,200)
2. In the assembly department, what is the cost assigned to December 31, 2020 work in process
inventory? (12,314,400)
3. In the finishing department, what is the cost of goods manufactured or cost assigned to units
completed for the year ended December 31, 2020? (130,923,150)
4. In the finishing department, what is the cost assigned to December 31, 2020 work in process
inventory? (6,764,430)

Problem 2: Glenda Manufacturing Company applies process costing in the manufacture of its
sole product, "Pharmanex".

o Manufacturing starts in Department I where materials are all added at the start of processing.
The good units are then transferred to Department 2 where all the incremental materials needed
for its completion are added after final inspection.

o In Department 1, units are inspected at the end of processing while in Department 2, inspection
takes place when the units are 90% completed.

o Department 1 uses FIFO costing while Department 2 uses the weighted average costing.
The production data for the month of August show the following:

Department 1 Department 2
Units
Beginning work in process, August 1 20,000 10,000
Work to be done 80% 20%
Ending work in process, August 31 30,000 17,500
Work Completed 2/3 5/7
Started in process during August 150,000
Normal Spoilage 4% of units started in process 2,500
Abnormal Spoilage ¼ of normal spoilage 1,250
Cost
Work in Process, August 1
Transferred In - 285,450
Materials 135,000 214,875
Conversion Cost 97,500 280,725
Current Cost
Transferred In - ?
Materials 1,980,000 840,000
Conversion Costs 3,088,800 1,282,500

1. What is the total cost transferred to Department 2 and the amount of work in process, end in
Department 1? (4,459,800; 792,000)
2. What is the total cost transferred to the storeroom and the amount of work in process, end in
Department 2? (6,583,650; 725,250)

Problem 3. CAVS Inc. employs weighted average process costing system regarding its cross-
over protector product. The following data are provided for the year ended December 31, 2020:

a. The January 1, 2020 work-in-process inventory consists of 4,000 units which have the
following costs: P100,000-direct material, 250,000-direct labor and P150,000-factory overhead.
The beginning inventory is 60% incomplete as to conversion cost.
b. The units started during the year totaled 6,000 units while the units completed during the
period totaled 5,000 units.
c. The December 31, 2020 work-in-process inventory consists of 3,000 units which is 90%
complete as to conversion cost.
d. The normal spoilage for the company is 20% of units started.
e. The total manufacturing costs added during the year consist of P2M-direct material, P1.5M-
direct labor and P1M-factory overhead.
f. The company inspects the products when the percentage of completion in conversion cost is
70%.
g. The company adds direct labor and factory overhead evenly throughout the period while of
direct materials are added at the start of the process while the remaining direct materials are
added at the end of the process.

What is the cost per equivalent unit for direct material and conversion cost, respectively?

A. 336 and 318.68

B. 154.85 and 274.73
C. 320 and 331.84
D. 254 and 294.82

Problem 4. Rudy Company employs process cost system, using FIFO method. A unit of product
passes through two departments: Assembly and Finishing before it is complete. Information
regarding Assembly Department follow:

Work in-process, Aug 1 10,000 units

Spoiled units 7,500
Started in Production 65,000
Transferred out 60,000

Raw materials are added at the beginning of processing in the Assembly department without
changing the number of units being processed. Work in Process on August 1 was 90% complete
as to conversion while 80% converted on August 31. The company usually experienced a 5%
loss based on the completed units. Cost data for the month of August follow:

Materials Labor Overhead

Work in Process beginning 81,000 66,000 71,250
Current Cost 279,000 220,500 286,875

What is the total cost of units transferred-out and total cost of work in process, end?

A. 870,600; 79,395
B. 870,600; 83,250
C. 864,000; 83,250
D. 864,000; 79,395