XAVIER UNIVERSITY - ATENEO DE CAGAYAN

School of Business and Management

Department of Accountancy
(AEC 21 – Cost Accounting and Control)

COST OF PRODUCTION REPORT (CPR)

ILLUSTRATION PROBLEM: NORMAL LOST UNITS; UNEVEN COST APPLICATION; PLURAL

DEPARTMENTS (FIFO METHOD)

SUPERIOR CHEMICAL MANUFACTURING COMPANY produces a product in two (2)

processing departments: Department 1, and 2. The March, 2022 data for Department 2 are
shown as follows:
Units:
In process, beg. (all materials; 1/4 labor & overhead) 4,000
Received from Department 1
36,000
In process, end (all materials: 1/3 labor & overhead)) 3,000
Lost units 1,000
Costs:
Work in process, beg. P 15,860
From preceding department P 126,000
Costs added this month:
Materials P 35,000
Labor 33,120
Factory overhead 19,440

In this department, materials are added 100% at the start of the process.

Required:

Prepare Cost of Production Report under the following assumptions:

1) Lost units classified as normal, discovered at the beginning of the process.

2) Lost units classified as normal, discovered at the end of the process.
3) Lost units classified as normal, discovered when 60% completed.
4) Lost units classified as abnormal, discovered at the end of the process

(END)

das/AEC 21