Illustration: Cost of Production Report.

Case 1. Manufacturing company with only one(1) processing department; with be beginning inventory;materials a
Kimberly Mfg. Corporation manufactures peanut butter in a single department . Data for the month of March, 201
Units:
Work in process, beginning
Materials, 100% complete, conversion cost, 80% complete 200 units
Started in process during the period 2,000 units
Completed and transferred out 2,080 units
Work in process, end
Materials, 100% complete, conversion cost, 50% complete 120 units
Cost:
Work in process, beginning
Materials, 100 % complete ₱3,000.00
Conversion cost, 80% complete 2,000.00 ₱5,000.00
Cost added during this period
Materials 30,000.00
Conversion cost 19,400.00
₱54,400.00

Required: 1. Prepare Cost of Production Report, Weighted average method and appropriate accounting entries.
2. Prepare Cost of Production Report, FIFO method and appropriate accounting entries.

SOLUTION:
1. Weighted Average Method
KIMBERLY MFG. CORPORATION
Cost of Production Report - Weighted Average Method
for the month ended March 31,2016

Quantity Schedule and Equivalent Units

Quantity Equivalent units
Schedule Materials
Units to be accounted for:
Work in process, beginning 200
Started in process during the period 2,000
Total units to be accounted for 2,200
Units accounted for:
Completed and transferred out 2,080 2,080
Work in process, end (Materials, 100%; Conversion cost,5 120 120
Total units accounted for 2,200 2,200

Total and Unit costs

 Costs
Total Materials
Cost to be accounted for:
Cost added by department:
Work in process, beginning ₱5,000.00 ₱3,000.00
Added this period 49,400.00 30,000.00
Total cost to be accounted for ₱54,400.00 ₱33,000.00
Cost per equivalent unit ₱25.00 ₱15.00
Cost accounted for
Completed and transferred out (2,080 units x P25.00) ₱52,000.00
Work in process, end:
Materials ( 120 units x P15.00 ) ₱1,800.00
Conversion costs (60 units x P10.00) 600.00
2,400.00
Total cost accounted for ₱54,400.00

2. FIFO Mehtod
KIMBERLY MFG. CORPORATION
Cost of Production Report - FIFO Method
for the month ended March 31,2016

Quantity Schedule and Equivalent Units

Quantity Equivalent Units
Schedule Materials
Units to be accounted for
Work in process, beginning 200
Started in process during the period 2,000
Total units to be accounted for 2,200
Units accounted for;
Completed and transferred out;
From work in process, beginning 200
From started in process during the period 1,880.00 1880
Work in process, end (Materials - 100%,Conversion -50%) 120 120
Total units accounted for 2,200 2,000

Total and Unit Costs

Costs
Total Materials
Cost to be accounted for
Work in process, beginning ₱5,000.00
Cost added by department:
 Added this period 49,400.00 ₱30,000.00
Total cost to be accounted for ₱54,400.00 ₱30,000.00
Cost per equivalent unit ₱24.80 ₱15.00
Cost accounted for:
Completed and transferred out:
From work in process, beginning:
Beginning cost ₱5,000.00
Cost to complete:
Conversion (40 units x P9.80) 392.00 ₱5,392.00
From started during the period (1,880 units x P24.80) 46,620.00
Total 52,012.00
Work in process, end:
Materials (120 units x P15.00) 1,800.00
Conversion costs (60 units x P9.80) 588.00 2,388.00
Total cost accounted for ₱54,400.00
nning inventory;materials added at the beginning of the process
for the month of March, 2016 are as follows:

riate accounting entries.

ting entries.

Journal Entries:

1. Work in process ₱30,000.00

Materials ₱30,000.00
To record materials used
Equivalent units #
Conversion 2. Work in process 19,400.00
Various accounts 19,400.00
To record conversion costs
#
3. Finished Goods Inventory 52,000.00
Work in process 52,000.00
2,080 To record cost of goods completed
60 and transferred to finished goods.
2,140 #
Costs
Conversion

₱2,000.00
19,400.00
₱21,400.00
₱10.00

Journal Entries:

1. Work in process ₱30,000.00

Materials ₱30,000.00
To record materials used.
Equivalent Units #
Conversion 2. Work in process 19,400.00
Various accounts 19,400.00
To record conversion costs
#
3. Finished Goods Inventory 52,012.00
Work in process 52,012.00
To record cost of goods completed
40 and transferred to finished goods.
1880
60
1980

Costs
Conversion
₱19,400.00
₱19,400.00
₱9.80