CORPORACIÓN UNIVERSITARIA MINUTO DE DIOS

PUBLIC ACCOUNTING
COSTS I
UNIT 3
ACTIVITY 5
WORKSHOP. PROCESS COSTS

With data from the company Piscinas S.A.S. the following is requested:

a. Prepare the respective production cost reports for June.

b. Prepare journal entries to record June transactions.
c. Prepare the cost card for each process.

Swimming Pools S.A.S. is a company that manufactures chemical products for the
treatment of swimming pool water. The company uses a cost system in which two
processes are distinguished:

Mixing and filtering

At the beginning of the first process, the raw materials are incorporated and a mixture is
prepared. This is transferred to the second process, where more raw materials are added
before the chemical is sent to the finished goods warehouse. The product flows through
the processes in a continuous stream and conversion costs are incurred evenly throughout
both processes. The product is sold in 5 liter containers.

The operating data are as follows:

Concept Mixing Filtering

Work in process (June 1) - -
Production started 9.600 8.700
Finished and transferred production 8.000 7.000
Retained production 700 900
Work in process (June 30) 900 800
Grade of finish raw materials 100 % -
Degree of completion conversion costs - 1/3
Raw materials used $6.200.000 $2.480.000
Labor $3.100.000 $ 1.240.000
Indirect costs
Supervision 124.000 93.000
Depreciation 644.800 198.400
Insurance 6.200 3.100
Property taxes 31.000 15.500
 Maintenance and repair 62.000 31.000
SERVICES 155.000 93.000
Materials, spare parts and accessories 310.000 124.000

During the period, the company purchased raw materials on credit for $12,100,000 and
the opening balance was $830,000, and 4,200 gallons were sold for cash at $5,240 per
unit. The value of finished goods inventories amounted to $252,840 at the end of June.

Source: Sinisterra, G. and Rincón, C. A. (2017). Cost accounting: With approximation to

international standards (2nd ed.). Ecoe, p. 537.
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