No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

PROCESS COSTING

PROBLEM 1:
Silver Company transferred 5,500 units to Finished Goods Inventory during October. On October 1, the
company had 300 units on hand (40 percent complete as to conversion costs). On October 30, the company
had 800 units (20 percent complete as to conversion costs). Direct materials are added in the following manner:
• 30% of the direct materials are added at the beginning of the process
• 25% of the direct materials are added at 35% conversion
• Remainder of the direct materials are added at 95% conversion

Requirements:
1. How many units were started during October?
2. How many units were started and completed during October?
3. Compute the EUP of direct materials under FIFO and weighted average.
4. Compute the EUP of conversion costs under FIFO and weighted average.

PROBLEM 2:
ABC company manufacturers a standard recliner. During April, the firm's Assembly Department started
production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the
Finishing Department. The firm ended the month with 10,000 chairs in ending inventory of the Assembly
Department. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the
beginning of the production cycle and conversion costs are added uniformly throughout the production
process. The FIFO method of process costing is used by Comfort. Beginning work in process was 30%
complete as to conversion costs, while ending work in process was 20% incomplete as to conversion costs.
Beginning work in process
Direct materials P24,000
Conversion costs 35,000
Manufacturing costs during April
Direct materials P168,000
Conversion costs 278,000

Requirement: Determine the cost assigned to ending work in process and transferred out using FIFO and
weighted average method.

PROBLEM 3:
ABC Co. is a manufacturer with two production departments: Assembly and Finishing. Units completed in the
Assembly Department is transferred to the Finishing Department. In the finishing department, direct materials
are added at the end of the process and uses FIFO method. The following information is provided for the
current month:
Physical Transferred Direct Materials Conversion
units in Costs Costs Costs
Work in process, beginning (50% converted) 120 P 72,000 - P 30,000
Transferred in during the month 200
Completed during the month 240
Work in process, ending (75% converted) ?
Total costs added during the month 140,000 35,000 75,000

1. How many units were in the ending work in process?

2. How much is the cost of ending work in process?
3. How much is the cost of goods manufactured?

1|P a g e RFERRER/RLACO/ATANG/PDEJESUS
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

PROBLEM 4:
Given for a certain process and all materials are added at the start of the production while conversion costs
were applied evenly throughout the production:

Beginning work in process, 25% converted 11,000 units

Started during the current period 74,000 units
Units completed 61,000 units
Ending work in process, 75% converted 16,000 units
Spoiled units 8,000 units

Beginning inventory Current period costs

Materials P450,000 P2,900,000
Conversion costs 60,000 1,850,000

Management considers normal spoilage to be 8% of total units placed into production.

Case 1: Assuming that spoilage occurs continuously during the process, determine the correct cost assigned to
ending work in process, goods completed and transferred and charged to period costs.
Case 2: Assuming that inspection occurs at 80% conversion, determine the correct cost assigned to ending
work in process, goods completed and transferred and charged to period costs.

PROBLEM 5 (SOLUTION TO BE UPLOADED):

Consider the following data for a cooking department for the month of February:
Beginning work in process (80% complete) 11,000
Started during current period 74,000
Units completed 61,000
Spoiled units 8,000
Ending work in process (75% complete) 16,000

Inspection occurs when production is 70 percent completed. Normal spoilage is 10% of units placed into
production during the current period.

Beginning work in process costs:

Material P220,000
Conversion 30,000
Current costs
Material 1,480,000
Conversion 942,000

Determine the costs assignment for the month of February.

“Never let the fear of striking out stop you from playing the game.” – Babe Ruth

2|P a g e RFERRER/RLACO/ATANG/PDEJESUS