The ABC Company manufactures a product in three successive departments:

Mixing, Refining and Finishing. Normal lost units coming from those placed in
process during the period or those received from preceding departments occur in
all three departments during processing. Production data for the month of
February follow:
Mixing Refining Finishing
In process, Feb 1 (all materials,
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
1/4 labor and overhead 4,000
Transferred to next department 38,000 36,000 36,000
Completed and on hand 1,000
In process, Feb 28 (all materials
2/3 labor and overhead 3,000
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
Units lost in process 2,000 1,000 1,000
Work in process, Feb 1 P 4,482 P 6,512 P 15,860
Cost added: Materials 19,760
Labor 24,180 34,040 33,120
Factory overhead 23,400 29,970 19,440

The ABC Company manufactures a product in three successive departments:

Mixing, Refining and Finishing. Normal lost units coming from those placed in
process during the period or those received from preceding departments occur in
all three departments during processing. Production data for the month of
February follow:
Mixing Refining Finishing
In process, Feb 1 (all materials,
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
1/4 labor and overhead 4,000
Transferred to next department 38,000 36,000 36,000
Completed and on hand 1,000
In process, Feb 28 (all materials
2/3 labor and overhead 3,000
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
Units lost in process 2,000 1,000 1,000
Work in process, Feb 1 P 4,482 P 6,512 P 15,860
Cost added: Materials 19,760
Labor 24,180 34,040 33,120
 Factory overhead 23,400 29,970 19,440

The ABC Company manufactures a product in three successive departments:

Mixing, Refining and Finishing. Normal lost units coming from those placed in
process during the period or those received from preceding departments occur in
all three departments during processing. Production data for the month of
February follow:
Mixing Refining Finishing
In process, Feb 1 (all materials,
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
1/4 labor and overhead 4,000
Transferred to next department 38,000 36,000 36,000
Completed and on hand 1,000
In process, Feb 28 (all materials
2/3 labor and overhead 3,000
1/2 labor and overhead 4,000
1/3 labor and overhead 3,000
Units lost in process 2,000 1,000 1,000
Work in process, Feb 1 P 4,482 P 6,512 P 15,860
Cost added: Materials 19,760
Labor 24,180 34,040 33,120
Factory overhead 23,400 29,970 19,440
Standard Costs per unit of X
(Based on a normal capacity of 4,000 units)

Materials: 6 pounds @ P0.50 a pound P 3.00

Direct labor: 4 hours @ P2.00 per hour 8.00
Factory overhead:
Variable: 4 hours @ P0.75 per hour P 3.00
Fixed: 4 hours @ P0.25 per hour 1.00 4.00
Total standard costs per unit of Product X P 15.00

Transactions during the month:

a Raw materials purchased: 30,000 pounds at an average cost of P0.52 a pound.
Twenty-two thousand pounds were used in production.
b Labor costs, as summarized in the payroll sheet, showed 15,000 hours spent
and an average rate of P1.98 was paid per hour.
c Total actual factory overhead incurred (assume all cash transactions):
Fixed expenses, P5,400, variable expenses P14,400.
d Production is charged for the costs of operation during the month.
e The production data for the month showed a total of 3,600 units of Product X
completed.
f Two thousand units were sold for P18.00 per unit, cash basis.
g Cost variances were determined, set up, and closed to Cost of Sales account
at the end of the month.

Standard Costs per unit of X

(Based on a normal capacity of 4,000 units)

Materials: 6 pounds @ P0.50 a pound P 3.00

Direct labor: 4 hours @ P2.00 per hour 8.00
Factory overhead:
Variable: 4 hours @ P0.75 per hour P 3.00
Fixed: 4 hours @ P0.25 per hour 1.00 4.00
Total standard costs per unit of Product X P 15.00

Transactions during the month:

a Raw materials purchased: 30,000 pounds at an average cost of P0.52 a pound.
Twenty-two thousand pounds were used in production.
b Labor costs, as summarized in the payroll sheet, showed 15,000 hours spent
and an average rate of P1.98 was paid per hour.
c Total actual factory overhead incurred (assume all cash transactions):
Fixed expenses, P5,400, variable expenses P14,400.
d Production is charged for the costs of operation during the month.
e The production data for the month showed a total of 3,600 units of Product X
 completed.
f Two thousand units were sold for P18.00 per unit, cash basis.
g Cost variances were determined, set up, and closed to Cost of Sales account
at the end of the month.

Standard Costs per unit of X

(Based on a normal capacity of 4,000 units)

Materials: 6 pounds @ P0.50 a pound P 3.00

Direct labor: 4 hours @ P2.00 per hour 8.00
Factory overhead:
Variable: 4 hours @ P0.75 per hour P 3.00
Fixed: 4 hours @ P0.25 per hour 1.00 4.00
Total standard costs per unit of Product X P 15.00

Transactions during the month:

a Raw materials purchased: 30,000 pounds at an average cost of P0.52 a pound.
Twenty-two thousand pounds were used in production.
b Labor costs, as summarized in the payroll sheet, showed 15,000 hours spent
and an average rate of P1.98 was paid per hour.
c Total actual factory overhead incurred (assume all cash transactions):
Fixed expenses, P5,400, variable expenses P14,400.
d Production is charged for the costs of operation during the month.
e The production data for the month showed a total of 3,600 units of Product X
completed.
f Two thousand units were sold for P18.00 per unit, cash basis.
g Cost variances were determined, set up, and closed to Cost of Sales account
at the end of the month.