Republic of the Philippines

GENERAL SANTOS CITY

AFAR Review 1 - Process Costing

Equivalent Units of Production (EUP) - 1 Department

Determine the EUP in Department 1, given the following:

Units in process, beginning (60% complete) 10,000

Started during the period 90,000
Completed, transferred to Dept. 2 80,000
Units in process, ending (20% complete) 20,000

1 (FIFO & AVERAGE) The materials are added at the START of the process in Department 1.

2 (FIFO & AVERAGE) The materials are added at the END of the process in Department 1.

3 (FIFO) The materials are added at these stages in Department 1:

 50% at the START of the process

 50% when the units are 20% completed

4 (FIFO) Determine the EUP in Department 1, given the following:

Units in process, beginning (60% complete) 30,000

Started during the period 270,000
Completed, transferred to Dept. 2 240,000

No units were lost, and ending units need 80% completion.

The materials are added at these stages in Department 1:

 50% at the START of the process

 40% when the units are 20% completed
 10% at the END of the process

5 (AVERAGE) Determine the EUP in Department 1, given the following:

Units in process, beginning (2/5 complete) 25,000

Started during the period 125,000
Units in process, ending (4/5 complete) 10,000

No units were lost.

The materials are added at these stages in Department 1:

 60% at the START of the process

 40% when the units are 75% completed

Multi-Department Costing

Determine the EUP in Departments 1 and 2, given the following:

Department 1 Department 2
Units in process, beginning (60% D1, 50% D2) 10,000 2,000
Started during the period 90,000 -
Received from prior department - 92,000
Increase in units received, due to added materials* 25%
Units in process, ending (20% D1, 70% D2) 8,000 17,000

There are no lost units.

The materials are added at these stages:

 For Department 1 - when units are 20% done

 For Department 2 - *START of the process

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Costs data are as follows:

Department 1 Department 2
Beginning costs:
In process - Materials P 10,000 P 4,000
In process - Labor 15,000 10,595
In process - FOH 18,000 5,550
From preceding department - 6,100
Materials added during the period 270,000 467,510
Labor added during the period 306,600 336,295
Factory overhead applied during the period 262,800 386,100

Lost Units

Determine the EUP in Department 2, given the following:

Units in process, beginning (60% complete) 5,000

Received from Department 1 95,000
Completed 80,000
Units in process, ending (80% complete) 14,000
Units lost (or spoiled units) 6,000

6 (FIFO) Materials are added at the START of the process in Department 2.

 Lost units are NORMAL.

 Lost units are DETECTED at the START of the process. (or normally occur at early stage)

7 (AVERAGE) Materials are added at the START of the process in Department 2.

 Lost units are NORMAL.

 Lost units are DETECTED at the END of the process.

8 (AVERAGE) Materials are added at the START of the process in Department 2.

 Lost units are ABNORMAL.

 Lost units are DETECTED at the END of the process.

9 (FIFO) Determine the EUP in Department 2, given the following:

Units in process, beginning (30% of work completed) 50,000

Received from Department 1 250,000
Units in process, ending (45% of work remaining) 50,000
Units lost 12,500

Materials are added at the MIDPOINT of the process in Department 2.

Inspection of goods is at the END of the process.

10 (AVERAGE) Determine the EUP in Department 1, given the following:

Units in process, beginning (80% of work completed) 20,000

Started in production 150,000
Completed in production 120,000
Units in process, ending (30% of work remaining) 40,000

Materials are added at these stages:

 1/4 at the START of the process

 3/4 at the END of the process

Inspection of goods is at the HALFWAY point of the process.

11 (FIFO) Determine the EUP in Department 2, given the following:

Units in process, beginning (80% of work completed) 3,000

Received from Department 1 97,000
Completed 90,000
Units in process, ending (30% of work remaining) 4,000

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Materials are added at these stages:

 50% at the START of the process

 40% when the units are halfway done
 10% at the end of the process

Inspection of goods is when the units are 75% completed.

12 (AVERAGE) Determine the EUP in Department 1, given the following:

Units in process, beginning (1/4 done on conversion) 40,000

Started in the period 296,000
Transferred out during the period 244,000
Spoiled units 32,000

 Materials are added at the START of the process.

 Conversions costs are incurred evenly during the process, and 80% complete at the end.
 Inspection occurs when production is 100% complete.
 Normal spoilage is 10% of good units transferred out during the period.

Determine the EUP in Department 1, given the following:

Units in process, beginning (60% complete) 5,000

Started in process 95,000
Completed 80,000
Units in process, ending (80% complete) 14,000
Units lost 6,000

13 (AVERAGE) Materials are added at the START of the process.

Units lost are expected and continuous.

14 (AVERAGE) Materials are added at the START of the process.

Units lost are abnormal.

15 (FIFO) Determine the EUP in Department 1, given the following:

Units in process, beginning (75% complete) 14,500

Started in process 75,000
Normal spoilage (continuous) 5,000
Abnormal spoilage 2,500
Transferred out 66,000
Units in process, ending (60% complete) 16,000

All materials are added at the START of production.

Costing - Lost Units

16 (AVERAGE) Determine the EUP in Department 1, given the following:

Costs
Materials Conversion
Units in process, beginning (90% converted) 4,000 P 10,000 P 58,400
Started in the period 26,000 182,000 501,000
Transferred out during the period 24,000
Spoiled units 3,000
Units in process, ending (80% converted) 3,000

 Materials are added at the START of the process.

 Inspection takes place when units are 75% converted.
 Usual experience of a 5% loss on completed units.

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17 (AVERAGE) Determine the EUP in Department 1, given the following:

Materials Costs Conversion Costs
Units in process, beginning (90% converted) 4,000 P 22,800 P 55,000
Started in the period 26,000 150,000 500,000
Transferred out during the period 24,000
Spoiled units (continuous) 3,000
Units in process, ending (80% converted) 3,000

 Materials are added at the START of the process.

 Usual experience of a 5% loss on completed units.

18 (AVERAGE) Determine the EUP in Department 2, given the following:

Materials L/FOH Total
Units in process, beginning (30% of work completed): 20,000
Materials & Labor P 40,000 P 46,000 P 86,000
From Department 1 - - 20,000
Received from Department 1 100,000 - - 880,000
Costs added in Department 2 - 500,000 620,000 1,120,000
Completed 95,000
Units in process, ending (45% of work remaining) 20,000
Units lost (inspected at the end of the process) 5,000

Materials are added at the MIDPOINT of the process in Department 2.

Determine the following:

Finished goods inventory - under normal loss
Finished goods inventory - under abnormal loss
Work in process inventory (end)

MORE PRACTICE QUESTIONS

1. Alander Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were
presented for August 2023:

Work in process, beginning inventory = 100,000 units

Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)

Transferred in during current period = 300,000 units

Completed and transferred out = 250,000 units

Work in process, ending inventory = 50,000

Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)

Question 1: Under FIFO method, what is the EUP for materials and conversion cost?

Materials Conversion Materials Conversion

A. 300,000 292,500 C. 350,000 382,500
B. 350,000 292,500 D. 300,000 382,500

Question 2: Under Average method, what is the EUP for materials and conversion cost?

Materials Conversion Materials Conversion

A. 300,000 292,500 C. 350,000 382,500
B. 350,000 292,500 D. 300,000 382,500

2. Glo Co., a manufacturer of combs, uses the weighted-average method in its process costing system. The company sold 125,000 units during the
month of April. There is only one processing department. The following additional information is provided:

Inventory at April 1:
Work in process None
Finished goods 37,500 units
Inventory at April 30:
Work in process (75% complete as to
conversion costs) 8,000 units
Finished goods 30,000 units

What were the equivalent units of production for conversion costs for April?

A. 126,500 B. 125,500 C. 123,500 D. 117,500

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3. The Morgan Company uses the weighted-average method in its process costing system. For a particular department, the company had 54,000
equivalent units of production with respect to conversion costs in March. There were 7,500 units in the department's beginning work in process
inventory, two thirds complete with respect to conversion costs. During March, 52,500 units were started and 50,000 were completed and
transferred out of the department. The ending work in process inventory in the department:

A. consisted of 5,000 units

B. consisted of 2,500 units
C. was 65% complete with respect to conversion costs
D. was 40% complete with respect to conversion costs

4. ABCDE Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories, direct materials and
conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the
beginning of the production process. Conversion costs are allocated evenly throughout production. ABCDE Shop uses weighted-average costing.

Data for the Assembly Department for June 2023 are:

Work in process, beginning inventory = 250 units
Direct materials (100% complete)
Conversion costs (50% complete)

Units started during June = 800 units

Work in process, ending inventory: = 150 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs for June 2023:

Work in process, beginning inventory:
Direct materials = P176,000
Conversion costs = P215,000
Direct materials costs added during June = P1,000,000
Conversion costs added during June = P1,000,000

Question 1: What are the equivalent units for direct materials and conversion costs, respectively, for June?

Materials Conversion Materials Conversion

A. 1,050 units 1,012.50 units C. 1,050 units 1,050 units
B. 1,200.5 units 1,160.64 units D. 962 units 990 units

Question 2: What is the total amount debited to the Work-in-Process account during the month of June?

A. P450,000 B. P2,000,000 C. P2,270,000 D. P2,450,000

Question 3: What is the direct materials cost per equivalent unit during June?

A. P1,120 B. P1,730 C. P1,579 D. P1,890

Question 4: What is the conversion cost per equivalent unit in June?

A. P1,200 B. P1,579 C. P1,730 D. P1,890

Question 5: What amount of direct materials costs is assigned to the ending Work-in-Process account for June?

A. P168,000 B. P283,552 C. P259,530 D. P236,850

Question 6: What amount of conversion costs are assigned to ending Work-in-Process account for June?

A. P101,957 B. P135,000 C. P126,451 D. P188,148

5. The following data are presented for the current period:

Department 1 Department 2
Units in process, beginning (60% D1, 50% D2) 10,000 2,000
Started during the period 90,000 -
Received from prior department - 92,000
Increase in units received, due to added materials* 25%
Units in process, ending (20% D1, 70% D2) 8,000 17,000

There are no lost units. The materials are added at the start of the process in Department 2.

FIFO costing is used, and costs data in Department 2 are as follows:

Beginning costs: Current costs (added this period):

In process - Materials P4,000 Materials P460,000
In process - Conversion costs 16,000 Conversion costs 665,400
From preceding department 6,000 Cost of units transferred in 819,000
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Question 1: What is the unit cost of units received from preceding department?

A. P7 B. P6.50 C. P7.50 D. P6

Question 2: What is the unit conversion cost in Department 2?

A. P6.75 B. P6.50 C. P6.25 D. P6

Question 3: What is the cost of goods manufactured in Department 2?

A. P1,712,000 B. P1,944,400 C. P1,700,000 D. P1,686,000

6. The following information pertains to Lap Co.’s Palo Division for the month of April:

Units Direct Materials

Beginning work in process 15,000 P5,500
Started in April 40,000 18,000
Units completed 42,500
Ending work in process 12,500

All materials are added at the beginning of the process.

Using the weighted-average method, the cost per equivalent unit for materials is

A. P0.59 B. P0.55 C. P0.45 D. P0.43

END