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  • Problem 1 Process Costing

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    Kloie Sanoria
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    RJ Inc. manufactures a product called "COLOREE" and is provided production data for 2020. They use both weighted average and FIFO process costing systems. The summary asks to calculate: 1) Under weighted average, the cost per equivalent unit of direct material and conversion cost. 2) Under FIFO, the cost per equivalent unit of direct material and conversion cost. The expert solution provides the calculations for conversion costs and explains that the full calculations for the costs per equivalent unit under both systems will be shown in steps 1 and 2.

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    RJ Inc. manufactures a product called "COLOREE" and is provided production data for 2020. They use both weighted average and FIFO process costing systems. The summary asks to calculate: 1) Under weighted average, the cost per equivalent unit of direct material and conversion cost. 2) Under FIFO, the cost per equivalent unit of direct material and conversion cost. The expert solution provides the calculations for conversion costs and explains that the full calculations for the costs per equivalent unit under both systems will be shown in steps 1 and 2.

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    © All Rights Reserved
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    12 views1 page

    Problem 1 Process Costing

    Uploaded by

    Kloie Sanoria
    RJ Inc. manufactures a product called "COLOREE" and is provided production data for 2020. They use both weighted average and FIFO process costing systems. The summary asks to calculate: 1) Under weighted average, the cost per equivalent unit of direct material and conversion cost. 2) Under FIFO, the cost per equivalent unit of direct material and conversion cost. The expert solution provides the calculations for conversion costs and explains that the full calculations for the costs per equivalent unit under both systems will be shown in steps 1 and 2.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Question :

    RJ Inc. is a company manufacturing a product known as "COLOREE" which undercover uniform process prior to its completion. For the year ended December 31, 2020, the following data are provided by the
    company:

    a. The work-in-process inventory on January 1, 2020 is 10,000 units which are 80% incomplete regards to conversion cost while the work-in-process inventory on December 31, 2020 is 60% complete as regards
    to conversion cost.

    b. The total units started during the year amounted to 90,000 units while the total units manufactured during the year amounted to 70, 000 units.

    c. There is no spoilage during the period.

    d. It is the company's policy to apply direct labor and factory overhead evenly throughout the period while 2/5 of direct materials are added at the start of the process while the remaining direct materials are added
    at the end of the process.

    e. The cost of January 1, 2020 work-in-process inventory consists of P100,000-direct material, P200,000-direct labor and P300,000-factory overhead.

    f. The total manufacturing cost for the year consisted of P2M-direct material, P5M-direct labor and P3M-factory head.

    1. Under the Weighted Average process costing system, what is the cost per equivalent unit of production of Direct Material and Conversion Cost, respectively?

    2. Under the FIFO process costing system, what is the cost per equivalent unit of production of Direct Material and Conversion Cost, respectively?

    Expert Solution : 0 0

    Step 1
    Calculation of the Conversion Costs :

    An explanation is given below in step 2 :

    Step 2

    (1) As per the weighted average process costing system & the cost per equivalent unit of production of Direct Material and Conversion Cost :

    (2) FIFO process costing system & the cost per equivalent unit of production of Direct Material and Conversion Cost :

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