PRODUCTION AND OPERATION COSTING

BPC32603

INDIVIDUAL ASSIGNMENT –PROCESS COSTING

1. In a single-process production system, Phunky Phingers produces wool gloves. For

November 2010, the company’s accounting records reflected the following:

Beginning WIP Inventory (100% complete as to material;

30% complete as to direct labor; 60% complete as to overhead) 12,000 units
Units started during the month 90,000 units
Ending WIP Inventory (100% complete as to material;
40% complete as to direct labor; 80% complete as to overhead) 20,000 units

Cost Component November 1 During November

Direct material $13,020 $90,000
Direct labor 1,908 45,792
Overhead 4,636 70,824

a. For November, prepare a cost of production report, assuming that the company uses the
weighted average method.
b. For November, prepare a cost of production report, assuming that the company uses
the FIFO method.

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 QUESTION A
Phunky Phingers
Cost of Production Report (WA Method)
For the Month of November 2013
Production Data: Units
Beginning WIP Inventory 12000
Units Started 90000
Units to account for 102000
Units Materials Labor Overhead
Beginning WIP Inventory 12000 12000 12000 12000
Started & Completed 70000 70000 70000 70000
Ending WIP Inventory 20000 20000 800 16000
Units accounted for 102000 102000 90000 98000
Cost Data: Total Materials Labor Overhead
Beginning WIP Inventory $19564 $13020 $1908 $4636
Currents Costs $206616 $90000 $45792 $70824
Total cost to account for $226180 $103020 $47700 $75640
Divided by EUP 102000 90000 98000
Cost per EUP $2.31 $1.01 $0.53 $0.77
Cost Assignment:
Transferred Out $189420
Ending Inventory:
Material $20200
Direct Labor $4240
Overhead $12320 $36760
Total Cost Accounted For $226180

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 QUESTION B

Phunky Phingers
Cost of Production Report (FIFO Method)
For the Month of November 2013
Production Data: Units
Beginning WIP Inventory 12000
Units Started 90000
Units to account for 102000
Units Materials Labor Overhead
Beginning WIP Inventory 12000 0 8400 4800
Started & Completed 70000 70000 70000 70000
Ending WIP Inventory 20000 20000 800 16000
Units accounted for 102000 90000 86400 908000
Cost Data: Total Materials Labor Overhead
Beginning WIP Inventory $19564
Currents Costs $206616 $90000 $45792 $70824
Total cost to account for $226180
Divided by EUP 90000 86400 90800
Cost per EUP $2.31 $1 $0.53 $0.78
Cost Assignment:
Transferred Out
Beginning WIP Inventory $19564
Complete Beginning WIP
DL 4452
OH 3744 $27760
Started & Completed $161700
Ending Inventory:

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 Material $20000
Direct Labor $4240
Overhead $12480 $36760
Total Cost Accounted For $226180

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 2. Found Sound Company mass-produces miniature speakers for personal sound systems.
The following cost information is available for June 2010:

Beginning inventory direct material cost $ 4,133.20

Beginning inventory conversion cost 873.10
Direct material issued during June 62,928.00
Direct labor incurred during June 13,070.00
Overhead applied during June 10,356.00

On June 1, the company had 1,000 units in process, which were 60 percent complete as to
material and 30 percent complete as to conversion. Found Sound started 8,400 units into
process during June and had 300 units still in process on June 30. Th e ending WIP units
were 80 percent complete as to material and 70 percent complete as to conversion.

a. Compute the unit costs for June under the weighted average method for direct
material and for conversion.
b. Determine the cost transferred out for June using the weighted average method.
c. Determine the cost of June 30 ending inventory using the weighted average method.
d. Compute the unit costs for June under the FIFO method for direct material and for
conversion.
e. Determine the total costs transferred to Finished Goods Inventory during June using
the FIFO method.
f. Determine the cost of June 30 ending inventory using the FIFO method.

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 QUESTION A

EUP Material Conversion

Completed 9100 9100
Ending WIP 240 210
9340 9310
Total Per unit
Material $67061.20 $7.18
CC $24299.10 $2.61
Total $91360.30 $9.79

QUESTION B

9100 × 9.79 = $89089

QUESTION C

91360.30 – 89089 = $2271.30

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 QUESTION D
EUP Material Conversion
Completed 9100 9100
less beginning 1000 1000
From Current 8100 8100
Worked in June
Beginning WIP 400 700
Ending WIP 240 210
8740 9010
Total Per unit
Beginning WIP $5,006.30
Material $62,928.00 $7.20
CC $23,426.00 $2.60
Total $91,360.30 $9.80

QUESTION E
Beginning WIP $5,006.30
400 × 7.2 + 700 × 2.6 $4,700.00
8100 × 9.8 $79,380.00 $89,086.30

QUESTION F
91360.3 - 89086.3 = $2,274.00

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