Allyson Charissa T.

Ansay
BSA – 2
Cost Accounting

Ex. 7-1. Cost of Production Report, WA

Required: Prepare a cost of production report and give all entries required to
record the above information.

Step 1.
Work in Process, 7/1, (30% completed) 5,000 units
Add: Units Started 20,000 units
Total units to account 25,000 units

Accounted as follows:
Units Completed and Transferred to next department 23,000 units
Less: Work in Process, 7/31, (20% completed) 2,000 units
Total units as accounted 25,000 units

Step 2.
EUP
Materials Labor Overhead
Completed and Transferred 23,000 23,000 23,000
IP, end (100%,M; 20%, L; 20%,O) 2,000 400 400
Total 25,000 23,400 23,400

Step 3.
Cost of beginning, Inventory P26,000
(Materials, P12,000; Direct Labor, P6,000;
Manufacturing Overhead , P8,000)
Add: Cost added in the current period
Materials P36,000
Direct Labor 16,000
Manufacturing Overhead 20,200 72,200
Total costs to account P98,200

Step 4.
Weighted Average:
Materials Mat cost (beg) + Mat cost (Current)/EUP
=12,000 + 36,000/25,000
=1.92

Direct Labor Direct Labor cost (beg) + Direct Labor cost (Current)/EUP
=6,000 + 16,000/23,400
=0.94

Manufacturing Overhead MOH cost (beg) + MOH cost (Current)/EUP

=8,000 + 20,200/23,400
=1.21
Total UC =4.07

Step 5.
Weighted Average
Completed & Transferred (23,000 x total UC of 4.07) P93,610
WIP, End Materials (2,000 x 1.92) + (400 x 0.94) + (400 x 1.21) 4,700
Total Costs as accounted P98,310

Journal Entries
(a) Work in Process P48,000
Raw Materials P48,000
To record cost of materials issued

(b) Work in Process 22,000

Payroll 22,000
To record cost of Direct labor

(c) Work in Process 28,200

 Manufacturing overhead 28,200
To record cost of manufacturing overhead

(d) Finished Goods 98,200

Work in Process 98,200
To record cost of goods completed

Ex. 7-4. Cost of Production Report using FIFO

Required:
1. Determine the EUP for materials and conversion cost in Process 1 &
Process 2.
2. Allocate the total costs to account to completed and transferred and to
work in process end

Process 1 Process 2
Work in Process, Jan 1 12,000 10,000
Add: Units Started 88,000 72,750_
Total Units to account 100,000 82,750

Process 1
EUP
Materials Labor Overhead
Completed and Transferred:
Beg inventory 12,000 P12,000 P8,400 P8,400
Started and completed 68,000 68,000 68,000 68,000
Total 80,000
WIP, end 20,000 3,600 3,600
Total units as accounted 100,000 80,000 80,000 80,000

Cost Per EUP

Materials
Current cost/EUP
P39,600/80,000 = 0.50

Labor
Current Cost/EUP
P28,400/80,000 = 0.36

Overhead
P5,200/80,000 = 0.07

Process 2
EUP
Materials Labor Overhead
Completed and Transferred:
Beg inventory 10,000 P10,000 P7,000 P7,000
Started and completed 64,000 64,000 64,000 64,000
Total 74,000
WIP, end 8,750 3,000 3,000
Total units as accounted 82,750 74,000 74,000 74,000

Cost Per EUP

Materials
Current cost/EUP
P69,598/74,000= 0.94

Labor
Current Cost/EUP
P54,940/74,000= 0.74

Overhead
P36,900/74,000= 0.50