EXERCISE 1

Step 1 Physical Flow of Units

WORK IN PROCESS (in units)
BWIP 10,000.00
SIP 120,000.00
130,000.00 130,000.00
Step 2 EUP
Weighted Average Direct Material Conversion Cost
C&T-out 100,000.00 100,000 (100%) 100,000 (100%)
E-WIP 30,000.00 30,000 (100%) 9,000 (30%)
EUP 130,000.00 109,000.00

Step 3 Cost to Account For Direct Material Conversion Cost

Beginning/Cost 2,100.00 2,030.00
Current Cost 33,000.00 109,695.00
Total Cost to Account For 35,100.00 111,725.00

Step 4 Cost per EUP Direct Material Conversion Cost

Total Cost to Account For 35,100.00 111,725.00
Divide by: EUP 130,000.00 109,000.00
Cost per unit of Production 0.27 1.025

Step 5 Allocate the Cost

C&T-out 27,000.00 102,500.00
E-WIP 8,100.00 9,225.00
TCAF 35,100.00 111,725.00

Journal Entries:
WIP - Dept 2 129,500.00
WIP - Dept 1 129,500.00
 Step 1 Physical Flow of Units

30,000.00 EWIP BWIP

100,000.00 C&T-out*1 10K B-WIP SIP
90K Started &
Completed Step 2 EUP
(S&C)
B-WIP
S&C
E-WIP
EUP
Total
4,130.00 Step 3 Cost to Account For
142,695.00
146,825.00

Total
146,825.00 Step 4 Cost per EUP

1.295

129,500.00 Step 5 Allocate the Cost

17,325.00
Total
146,825.00 Cost of
C&T-out

Journal Entries:
Physical Flow of Units
WORK IN PROCESS (in units)
10,000.00 30,000.00
120,000.00 100,000.00
130,000.00 130,000.00

FIFO Direct Material Conversion Cost

10,000.00 0 (no added new materials) 7,500 (75%)
90,000.00 90,000 (100%) 90,000 (100%)
30,000.00 30,000 (100%) 9,000 (30%)
120,000.00 106,500.00

Cost to Account For Direct Material Conversion Cost Total

Beginning/Cost 2,100.00 2,030.00 4,130.00
Current Cost 33,000.00 109,695.00 142,695.00
Total Cost to Account For 35,100.00 111,725.00 146,825.00

Cost per EUP Direct Material Conversion Cost Total

Current Cost 33,000.00 109,695.00 142,695.00
Divide by: EUP 120,000.00 106,500.00
Cost per unit of Production 0.275 1.030 1.305

Allocate the Cost

C&T-out (Prior) 2,100.00 2,030.00 4,130.00
C&T-out (Current) 0 7,725.000 7,725.00
S&C 24,750.00 92,700.00 117,450.00
E-WIP 8,250.00 9,270.00 17,520.00
TCAF 35,100.00 111,725.00 146,825.00

WIP - Dept 2 129,305.00

WIP - Dept 1 129,305.00

1.29305
EWIP
C&T-out*10000

129,305.00
EXERCISE 2

Step 1 Physical Flow of Units

WORK IN PROCESS - DEPT 1(in units)
BWIP 150,000.00
SIP 200,000.00
350,000.00 350,000.00

Step 2 EUP
Weighted Average Direct Material Conversion Cost
C&T-out 300,000.00 300,000 (100%) 300,000 (100%)
E-WIP 50,000.00 50,000 (100%) 20,000 (40%)
EUP 350,000.00 320,000.00

Step 3 Cost to Account For Direct Material Conversion Cost

Beginning/Cost 83,900.00 43,650.00
Current Cost 108,600.00 97,150.00
Total Cost to Account For 192,500.00 140,800.00

Step 4 Cost per EUP Direct Material Conversion Cost

Total Cost to Account For 192,500.00 140,800.00
Divide by: EUP 350,000.00 320,000.00
Cost per unit of Production 0.55 0.44

Step 5 Allocate the Cost Direct Material Conversion Cost

C&T-out 165,000.00 132,000.00
E-WIP 27,500.00 8,800.00
TCAF 192,500.00 140,800.00

Journal Entries

WIP - II 297,000.00
WIP - I 297,000.00

Unit Cost: 297,000/300,000 0.99

 Step 1 Physical Flow of Units
) WORK IN PROCESS - DEPT 2 (in unit
50,000.00 EWIP BWIP 90,000.00
300,000.00 C&T-out SIP 300,000.00

Step 2 EUP
Weighted Average
C&T-out 310,000.00
E-WIP 80,000.00
EUP

Total Step 3 Cost to Account For

127,550.00 Beginning/Cost
205,750.00 Current Cost
333,300.00 Total Cost to Account For

Total Step 4 Cost per EUP

333,300.00 Total Cost to Account For
Divide by: EUP
0.99 Cost per unit of Production

Total Step 5 Allocate the Cost

297,000.00 C&T-out
36,300.00 E-WIP
333,300.00 TCAF

Journal Entries

WIP - III
WIP - II

Unit Cost: 930,000/310,000

K IN PROCESS - DEPT 2 (in units)
80,000.00 EWIP
310,000.00 C&T-out
390,000.00 390,000.00

Direct Material Conversion Cost T-In

310,000 (100%) 310,000 (100%) 310,000 (100%)
80,000 (100%) 70,000 (87.%) 80,000 (100%)
390,000.00 380,000.00 390,000

Direct Material Conversion Cost T-in Total

44,640.00 33,300.00 89,100.00 167,040.00
306,360.00 388,500.00 297,000.00 991,860.00
351,000.00 421,800.00 386,100.00 1,158,900.00

Direct Material Conversion Cost T-in Total

351,000.00 421,800.00 386,100.00 1,158,900.00
390,000.00 380,000.00 390,000.00
0.90 1.11 0.99 3.00

Direct Material Conversion Cost T-in Total

279,000.00 344,100.00 306,900.00 930,000.00
72,000.00 77,700.00 79,200.00 228,900.00
351,000.00 421,800.00 386,100.00 1,158,900.00

930,000.00
930,000.00

3.00
EXERCISE 3

Step 1 Physical Flow of Units

WORK IN PROCESS - DEPT 1 (in units)
BWIP 60,000.00
SIP 440,000.00
500,000.00

Step 2 EUP
FIFO Direct Material
B-WIP 60,000.00 -
S&C 340,000.00 340,000 (100%)
E-WIP 100,000.00 100,000 (100%)
EUP 440,000.00

Step 3 Cost to Account For Direct Material

Beginning/Cost 40,000.00
Current Cost 198,000.00
Total Cost to Account For 238,000.00

Step 4 Cost per EUP Direct Material

Current Cost 198,000.00
Divide by: EUP 440,000.00
Cost per unit of Production 0.45

Step 5 Allocate the Cost Direct Material

C&T-out (Prior) 40,000.00
Total Cost of C&T-out C&T-out (Current) -
S&C 153,000.00
E-WIP 45,000.00
TCAF 238,000.00

Journal Entry:
WIP - II 349,000.00
WIP - I 349,000.00

Unit Cost (349K/400K) 0.8725

 Step 1
CESS - DEPT 1 (in units)
100,000.00 EWIP
400,000.00 C&T-out BWIP 60,000.00
500,000.00 S&C 340,000.00

Step 2
Conversion Cost
20,000 (1/3)
340,000 (100%) ALWAYS 100%
60,000 (3/5)
420,000.00

Conversion Cost Total Step 3

12,000.00 52,000.00
168,000.00 366,000.00
180,000.00 418,000.00

Conversion Cost Total Step 4

168,000.00 366,000.00
420,000.00
0.40 0.85

Conversion Cost Step 5

12,000.00 52,000.00
8,000.000 8,000.00
136,000.00 289,000.00 349,000.00
24,000.00 69,000.00
180,000.00 418,000.00

Journal Entry:
 Physical Flow of Units
WORK IN PROCESS - DEPT 2 (in units)
BWIP 50,000.00
SIP 400,000.00
450,000.00 450,000.00

EUP
FIFO Direct Material Conversion Cost
B-WIP 50,000.00 15,000 (30%) 20,000 (2/5)
T-in&C 320,000.00 320,000 (100%) 320,000 (100%)
E-WIP 80,000.00 56,000 (70%) 70,000 (7/8)
EUP 391,000.00 410,000.00

Cost to Account For Direct Material Conversion Cost

Beginning/Cost 36,850.00 50,000.00
Current Cost 347,990.00 459,200.00
Total Cost to Account For 384,840.00 509,200.00

Cost per EUP Direct Material Conversion Cost

Current Cost 347,990.00 459,200.00
Divide by: EUP 391,000.00 410,000.00
Cost per unit of Production 0.89 1.12

Allocate the Cost Direct Material Conversion Cost

C&T-out (Prior) 36,850.00 50,000.00
Total Cost of C&T-out C&T-out (Current) 13,350.00 22,400.000
T-in&C 284,800.00 358,400.00
E-WIP 49,840.00 78,400.00
TCAF 384,840.00 509,200.00

Journal Entry:
Finished Goods 1,065,000.00
WIP - II 1,065,000.00

Unit Cost (1065K/370K) 2.8784

ts)
80,000.00 EWIP
370,000.00 C&T-out BWIP 50,000.00
S&C 320,000.00

T-in
0
320,000 (100%) ALWAYS 100%
80,000 (100%)
400,000

T-in Total
20,000.00 106,850.00
349,000.00 1,156,190.00
369,000.00 1,263,040.00

T-in Total
349,000.00 1,156,190.00
400,000.00
0.873 2.88

T-in Total
20,000.00 106,850.00
- 35,750.00
279,200.00 922,400.00 1,065,000.00
69,800.00 198,040.00
369,000.00 1,263,040.00
EXERCISE 4

1 Normal Spoilage (Discrete : "Final Inspection")

Units completed & Passing Inspection 460,800.00
Units failing final inspection 22,600.00
Total units inspected 483,400.00
Multiply by: Normal Spoilage Rate 0.04
Normal Spoilage 19,336.00
2 Abnormal Spoilage
Units failing final inspection 22,600.00
Less: Normal Spoilage (19,336.00)
Abnormal Spoilage 3,264.00
EXERCISE 5: DISCRETE

Step 1 Physical Flow of Units

WORK IN PROCESS (in units)
BWIP 10,000.00
SIP 80,000.00

90,000.00 90,000.00

Step 2 EUP: INSPECTION POINT: 50% Processing

Added at the Start 40% of Processing
Weighted Average Direct Material 1 Direct Material 2
C&T-out 60,000.00 60,000 (100%) 60,000 (100%)
E-WIP 20,000.00 20,000 (100%) 0 (0%)
NL 3,000.00 3,000 (100%) 3,000 (100%)
AL 7,000.00 7,000 (100%) 7,000 (100%)
EUP-WAVE 90,000.00 70,000.00
LESS: EUP (B-WIP) 10,000 (100%) 10,000 (100%)
EUP-FIFO 80,000.00 60,000.00
 Step 1 Physical Flow of Units
s)
20,000.00 EWIP BWIP
60,000.00 C&T-out*10000 SIP
3,000.00 Normal Loss
7,000.00 Abnormal Loss

Step 2 EUP: INSPECTION POINT: End of P

End Evenly
Direct Material 3 DM4/CC
60,000 (100%) 60,000 (100%) C&T-out
0 (0%) 6,000 (30%) E-WIP
0 (0%) 1,500 (50%) NL
0 (0%) 3,500 (50%) AL
60,000.00 71,000.00 EUP-WAVE
0 (0%) 6,000 (60%) LESS: EUP (B-WIP)
60,000.00 65,000.00 EUP-FIFO
 WORK IN PROCESS (in units)
10,000.00 20,000.00
80,000.00 60,000.00
3,000.00
7,000.00
90,000.00 90,000.00

ION POINT: End of Processing

Added at the Start 40% of Processing End
Weighted Average Direct Material 1 Direct Material 2 Direct Material 3
60,000.00 60,000 (100%) 60,000 (100%) 60,000 (100%)
20,000.00 20,000 (100%) 0 (100%) 0 (100%)
3,000.00 3,000 (100%) 3,000 (100%) 0 (100%)
7,000.00 7,000 (100%) 7,000 (100%) 0 (100%)
90,000.00 90,000.00 60,000.00
10,000 (100%) 10,000 (100%) 0 (100%)
80,000.00 90,000.00 60,000.00
EWIP
C&T-out*10000
Normal Loss
Abnormal Loss

Evenly
DM4/CC
60,000 (100%)
6,000 (30%)
3,000 (100%)
7,000 (100%)
76,000.00
6,000 (60%)
70,000.00
EXERCISE 6: CONTINUOUS (SINCE NO INSPECTION POINT PROVIDED)
Note: most of the time, spoilage comes from the current period
Step 1 Physical Flow of Units
WORK IN PROCESS (in units)
BWIP 300,000.00
SIP 1,500,000.00

1,800,000.00 1,800,000.00

Step 2 EUP

Weighted Average Direct Materials Conversion Cost

C&T-out 1,200,000.00 1,200,000 (100%) 1,200,000 (100%)
E-WIP 360,000.00 360,000 (100%) 288,000 (80%)
NL 150,000.00 0 (NEGLECT) 0 (NEGLECT)
AL 90,000.00 90,000 (100%) 90,000 (100%)
EUP-WAVE 1,650,000.00 1,578,000.00
Less: BWIP 300,000.00 300,000.00 270,000.00
EUP-FIFO 1,350,000.00 1,308,000.00
 Step 1 Physical Flow of Units
s) WORK IN PROCESS (in
360,000.00 EWIP BWIP 300,000.00
1,200,000.00 C&T-out SIP 1,500,000.00
150,000.00 Normal Loss
90,000.00 Abnormal Loss

Step 2 EUP

FiFo
B-WIP 300,000.00
S&C 900,000.00
E-WIP 360,000.00
NL 150,000.00
AL 90,000.00
EUP-FIFO
 WORK IN PROCESS (in units)
360,000.00 EWIP
1,200,000.00 C&T-out
150,000.00 Normal Loss
90,000.00 Abnormal Loss
1,800,000.00 1,800,000.00

Direct Materials Conversion Cost

0 (100%) 30,000 (10%)
900,000 (100%) 900,000 (100%)
360,000 (100%) 288,000 (80%)
0 (NEGLECT) 0 (NEGLECT)
90,000 (100%) 90,000 (100%)
1,350,000.00 1,308,000.00
EXERCISE 7
DEPARTMENT 1 FIFO COSTING
Step 1 Physical Flow of Units
WORK IN PROCESS (in units)
BWIP 8,000.00 12,000.00
SIP 60,000.00 53,000.00
2,400.00
600.00
68,000.00 68,000.00

Step 2 EUP

FiFo Direct Materials Conversion Cost

B-WIP 8,000.00 0 (100%) 6,400 (4/5)
S&C 45,000.00 45,000 (100%) 45,000 (100%)
E-WIP 12,000.00 12,000 (100%) 8,000 (2/3)
NL 2,400.00 2,400 (100%) 2,400 (100%)
AL 600.00 600 (100%) 600 (100%)
EUP-FIFO 60,000.00 62,400.00

Step 3 Cost to Account For Direct Material Conversion Cost Total

Beginning/Cost 9,000.00 6,500.00 15,500.00
Current Cost 132,000.00 205,920.00 337,920.00
TCtoAcctFor 141,000.00 212,420.00 353,420.00

Step 4 Cost per EUP Direct Material Conversion Cost Total

Current Cost 132,000.00 205,920.00 337,920.00
Divide by: EUP 60,000.00 62,400.00
CPU production 2.20 3.30 5.50

Step 5 Allocate the Cost Direct Material Conversion Cost Total

Total C&T-out (Prior) 9,000.00 6,500.00 15,500.00
Cost of C&T-out (Current) 0 21,120.000 21,120.00
C&T-out S&C 99,000.00 148,500.00 247,500.00
* Normal Loss 5,280.00 7,920.00 13,200.00
** Abnormal Loss 1,320.00 1,980.00 3,300.00
E-WIP 26,400.00 26,400.00 52,800.00
TCAF 141,000.00 212,420.00 353,420.00

* Absorbed by good units

Normal Loss will be absorbed by the C&T only excluding EWIP since IP is at the end of production
* Final Total Cost of C&T-out 297,320.00
** Abnormal Loss Treated as Loss since period cost

Journal Entry
WIP - II 297,320.00
 Loss 3,300.00
WIP - I 300,620.00

Unit Cost (284,120/53,000) 5.36

But: Unit Cost (284,120+13,200/53,000) 5.61
 DEPARTMENT 2 WAVE COSTING
Step 1 Physical Flow of Units
WORK IN PROCESS (in units
EWIP BWIP 4,000.00
C&T-out SIP 53,000.00
Normal Loss
Abnormal Loss
57,000.00

Step 2 EUP

FiFo Direct Materials

S&C 48,500.00 48,500 (100%)
E-WIP 7,000.00 0 (100%)
NL 1,000.00 0 (100%)
AL 500.00 0 (100%)
EUP-WAVE 48,500.00

Step 3 Cost to Account For Direct Material

Beginning/Cost 14,325.00
Current Cost 56,000.00
TCtoAcctFor 70,325.00

Step 4 Cost per EUP Direct Material

Current Cost 70,325.00
Divide by: EUP 48,500.00
CPU production 1.45

Step 5 Allocate the Cost Direct Material

Total Cost of C&T-out C&T-out 70,325
* Normal Loss -
284,120.00 ** Abnormal Loss -
E-WIP -
TCAF 70,325.00

* Absorbed by good units

d of production Normal Loss will be absorbed by the C&T only excluding EWIP since IP is at 90% of p
* Final Total Cost of C&T-out 438,910.00
** Abnormal Loss Treated as Loss since period cost

Journal Entry
Finished Goods 438,910.00
 Loss 3,630.00
WIP - II

Unit Cost (431,650/48,500)

But: Unit Cost (431,650+7260/48,500)
T 2 WAVE COSTING

ORK IN PROCESS (in units)

7,000.00 EWIP
48,500.00 C&T-out
1,000.00 Normal Loss
500.00 Abnormal Loss
57,000.00

Conversion Cost T-in

48,500 (100%) 48,500 (100%)
5,000 (5/7) 7000 (100%)
900 (90%) 1,000 (100%)
450 (90%) 500 (100%)
54,850.00 57,000.00

Conversion Cost T-in Total

18,715.00 19,030.00 52,070.00
85,500.00 297,320.00 438,820.00
104,215.00 316,350.00 490,890.00

Conversion Cost T-in Total

104,215.00 316,350.00 490,890.00
54,850.00 57,000.00
1.90 5.55 8.90

Conversion Cost T-in Total

92,150.000 269,175.00 431,650
1,710.00 5,550.00 7,260 438,910.00
855.00 2,775.00 3,630
9,500.00 38,850.00 48,350
104,215.00 316,350.00 490,890.00

EWIP since IP is at 90% of production

Loss since period cost

442,540.00

8.90
9.05
EXERCISE 8: ANSWER AFTER PB
EXERCISE 9: OPERATIONS COSTING

WORK IN PROCESS (in units)

BWIP - - EWIP
SIP 25,000.00 25,000.00 C&T-out
25,000.00 25,000.00

Cost /EUP TCTAF EUP Cost/EUP

D1 360,000.00 25,000.00 14.4
D2 60,000.00 15,000.00 4
D3 84,000.00 10,000.00 8.4

Job Order No. of Sweaters Cost/EUP 456

DM 112,000.00
CC1 800.00 14.40 11,520.00
CC3 800.00 8.40 6,720.00
TOTAL COST 130,240.00

Job Order No. of Sweaters Cost/EUP 789

DM 94000
CC1 1300 14.4 18720
CC2 1300 4 5200
TOTAL COST 117,920.00
Dept 1: 25,000.00
Dept 2 (60%) 15,000.00
Dept 3 (40%) 10,000.00