New Era University

College of Accountancy

COST ACCOUNTING
Process Costing Answers and Solutions

1. C. Dr. Work in Process--Department C, 468,000; Cr. Work in Process--Department B, 468,000

Beginning work in process Department A P 60,000
Add total manufacturing costs1 Department A 300,000
Less ending work in process Department A - 48,000
Transferred-out to Department B P312,000
Add beginning work in process Department B 60,000
Add total manufacturing costs1 Department B 144,000
Less ending work in process Department B - 48,000
Transferred-out to Department C P468,000
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Direct materials + direct labor + applied factory overhead

2. A. was 40% complete with respect to conversion costs.

Step 1: Compute for the units in ending work in process:
Units in beginning work in process 15,000 units
Add units started 105,000
Units to account for 120,000 units
Less units completed and transferred out - 100,000
Units in ending work in process 20,000 units
Step 2: Compute for the EUP in ending work in process:
Units completed and transferred out 100,000 units
Add EUP in ending inventory (SQUEEZE) 8,000
Total weighted-average EUP 108,000 units
Step 3: Determine the percentage of completion of units in ending work in process:
EUP in ending inventory 8,000 units
Divide by units in ending work in process 20,000
Percentage of completion of units in ending work in process 40 %

3. C. 46,000 units.
Units in beginning work in process 16,000 units
Add units started (SQUEEZE) 46,000
Units to account for 62,000 units
Less units completed and transferred out - 50,000
Units in ending work in process 12,000 units

4. D. 247,000
Step 1: Compute for the units manufactured/completed:
Units manufactured (SQUEEZE) 235,000 units
Add beginning finished goods inventory 75,000
Units available for sale 310,000 units
Less ending finished goods inventory - 60,000
Units sold 250,000 units
Step 2: Compute for the total weighted-average EUP:
Units completed 235,000 units
Add EUP in ending work in process (16,000 x 75%) 12,000
Total weighted-average EUP 247,000 units

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5. D. 46,870
Units completed (SQUEEZE) 46,870 units
Add EUP in ending work in process (4,800 x 60%) 2,880
Total weighted-average EUP 49,750 units

6. A. 17,000
Step 1: Compute for the EUP to complete beginning work in process:
EUP to complete beginning work in process (SQUEEZE) 6,800 units
Units started and completed 50,000
EUP in ending work in process (24,000 x 30%) 7,200
Total FIFO EUP 64,000 units
Step 2: Compute for the units in beginning work in process:
EUP to complete beginning work in process 6,800 units
Divide by percentage to complete (100% 60%) 40 %
Units in beginning work in process 17,000 units

7. D. 10,000; 60%
Weighted-average EUP for direct material 40,000 units
Less FIFO EUP for direct material - 30,000
EUP in beginning inventory for direct material 10,000 units
Since all materials are added at the beginning of processing, the EUP in beginning inventory for
direct material represents the number of units. The percentage of completion for the direct labor
component is computed as follows:
Weighted-average EUP for direct labor 38,000 units
Less FIFO EUP for direct labor - 32,000
EUP in beginning inventory for direct labor 6,000 units
Divide by units in beginning inventory 10,000 units
Units sold 60 %

8. 76,800
Step 1: Compute for the units in beginning work in process:
Units in beginning work in process (SQUEEZE) 27,000 units
Add units started 75,000
Units to account for 102,000 units
Less units completed and transferred out - 87,000
Units in ending work in process 15,000 units
Step 2: Compute for the EUP to complete beginning work in process:
Units in beginning work in process 27,000 units
Multiply by percentage to complete (100% 60%) x 40 %
EUP to complete beginning work in process 10,800 units
Step 3: Compute the total FIFO EUP for conversion costs:
EUP to complete beginning work in process 10,800 units
Units started and completed (75,000 15,000) 60,000
EUP in ending work in process (15,000 x 40%) 6,000
Total FIFO EUP for conversion costs 76,800 units

9. C. 3,580 and 3,255, respectively

Units in beginning work in process 980 units
Add units started 2,600
Units to account for 3,580 units
Less units in ending work in process - 650
Units completed 2,930 units

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 Material A Material B Conversion
Units completed 2,930 2,930 2,930
Add EUP in ending inventory:
Material A: 650 x 100% 650
Material B: 650 x 50% 325
Conversion: 650 x 80% _____ _____ 520
Total weighted-average EUP 3,580 3,255 3,450

10. A. P30.07
Beginning inventory costs conversion P 5,640
Current period costs conversion 98,100
Total costs to account for conversion P103,740
Divide by weighted-average EUP (see no. 9) 3,450 units
Average cost per EUP conversion P 30.07 per unit

11. C. P2.04
Beginning inventory cost material P 8,000
Current period cost material 28,700
Total cost to account for material P36,700
Divide by weighted-average EUP for material2 18,000 units
Weighted-average cost per EUP material P 2.04 per unit
2
Computation: 15,000 + (3,000 x 100%)

12. B. P300,000
Materials (P50 x 7,500 x 0%) P 0
Conversion cost [(P20 + P30) x 7,500 x 80%] 300,000
Cost of ending work-in-process inventory P300,000

13. C. P15,000
Step 1: Compute for the EUP:
Materials Conversion
Units completed 21,600 21,600
Add EUP in ending inventory:
2,400 x 100% 2,400
2,400 x 30% ________ 720
Total EUP 24,000 22,320
Step 2: Compute for the cost per EUP:
Materials Conversion
Total costs P 96,000 P167,400
Divide by EUP 24,000 22,320
Cost per EUP P 4.00 P 7.50
Step 3: Assign cost to ending work-in-process inventory:
Materials Conversion
Cost per EUP P 4.00 P 7.50
Multiply by EUP in ending inventory x 2,400 x 720
Cost in ending inventory P 9,600 P 5,400
P9,600 + P5,400 = P15,000

14. B. P1,977,210
Cost of incomplete beginning inventory P1,026,810
Cost to complete beginning inventory3 950,400
Cost of completed beginning inventory P1,977,210

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Computation of cost to complete beginning inventory:
Direct material [P30 x (54,000 54,000)] P 0
Packaging [P4 x (54,000 0)] 216,000
Direct labor [P12 x (54,000 16,200)] 453,600
Manufacturing overhead [P8 x (54,000 18,900)] 280,800
Total P950,400

15. D. P17,604,000
Total unit cost (P30 + P4 + P12 + P8) P 54 per unit
Multiply by units started and completed (380,000 54,000) x 326,000 units
Cost of units started and completed P17,604,000

16. B. P456,000
Direct material (P30 x 12,000 x 100%) P360,000
Packaging (P4 x 12,000 x 0%) 0
Direct labor (P12 x 12,000 x 30%) 43,200
Manufacturing overhead (P8 x 12,000 x 55%) 52,800
Cost of ending inventory P456,000

17. D. 70,000 units

EUP to complete beg. inventory (15,000 x 0%) 0 units
Units started and completed (85,000 15,000) 70,000
EUP in ending inventory (10,000 x 0%) 0
EUP for direct materials 70,000 units
Note: The beginning inventory was 100% complete as to direct materials because the units have
already passed the 25% stage of completion. Hence, the EUP to complete these units is zero. On
the other hand, the ending inventory was 0% complete as to direct materials because the units
have not yet reached the 25% stage of completion.

18. C. P55,300
Step 1: Compute for the EUP:
Materials Conversion
Units completed 7,000 7,000
Add EUP in ending inventory:
3,000 x 100% 3,000
3,000 x 50% ________ 1,500
Total EUP 10,000 8,500
Step 2: Compute for the cost per EUP:
Materials Conversion
Total costs P 27,000 P 44,200
Divide by EUP 10,000 8,500
Cost per EUP P 2.70 P 5.20
Step 3: Assign cost to units transferred out:
(P2.70 + P5.20) x 7,000 = P55,300

19. A. P23.29
Beginning inventory cost materials P 5,500
Current period cost materials 158,700
Total cost to account for materials P164,200
Divide by weighted-average EUP for materials4 7,050 units
Weighted-average cost per EUP materials P 23.29 per unit
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Computation: 6,200 + [(400 + 6,800 6,200) x 85%)]

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20. D. P109,810
Step 1: Compute for the weighted-average EUP:
Transferred-in Direct material Conversion
Units completed (B + S E) 79,000 79,000 79,000
Add EUP in ending inventory:
Transferred-in: 6,000 x 100% 6,000
Direct material: 6,000 x 0% 0
Conversion: 6,000 x 80% __ ___ ___ __ 4,800
Total weighted-average EUP 85,000 79,000 83,800
Step 2: Compute for the cost per EUP:
Transferred-in Direct material Conversion
Cost in beg. inventory P 9,250 P 0 P 3,598
Current period costs 80,000 10,270 14,000
Total costs P89,250 P10,270 P17,598
Divide by EUP 85,000 79,000 83,800
Cost per EUP P 1.05 P 0.13 P 0.21
Step 3: Assign costs to units completed:
(P1.05 + P0.13 + P0.21) x 79,000 = P109,810

21. A. P6,816.52
Step 1: Compute for the FIFO EUP:
Transferred-in Direct material Conversion
Weighted-average EUP 85,000 79,000 83,800
Less EUP in beg. inventory -5,000 ___ _0 -1,500
FIFO EUP 80,000 79,000 82,300
Step 2: Compute for the cost per EUP:
Transferred-in Direct material Conversion
Current period costs P80,000 P10,270 P14,000
Divide by EUP 80,000 79,000 82,300
Cost per EUP P 1.00 P 0.13 P 0.17
Step 3: Assign costs to units in ending inventory:
Transferred-in: P1.00 x 6,000 x 100% P6,000.00
Direct material: P0.13 x 6,000 x 0% 0.00
Conversion: P0.17 x 6,000 x 80% 816.52
Cost of ending inventory P6,816.52

22. B. P157,000
Cost in beg. inventory P 7,350
Cost to complete beg. inventory (2,500 x 20% x P4.10) 2,050
Cost of units started and completed [(38,500 2,500) x P4.10] 147,600
Conversion cost assigned to units completed P157,000

23. A. 5,400 units

EUP to complete beg. inventory (500 x 20%) 100 units
Units started and completed (5,100 500) 4,600
EUP in ending inventory (1,400 x 50%) 700
EUP for materials 5,400 units

24. C. P14.95
Step 1: Compute for the FIFO EUP for conversion costs:
EUP to complete beg. inventory (500 x 55%) 275 units
Units started and completed (5,100 500) 4,600
EUP in ending inventory (1,400 x 45%) 630
FIFO EUP for conversion costs 5,505 units

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 Step 2: Compute for the FIFO cost per EUP:
Conversion costs added during the month P82,300
Divide by EUP for conversion costs 5,505 units
FIFO unit cost for conversion costs P 14.95 per unit

25. A. P240,555
Labor cost P 41,280
Applied factory overhead (P41,280 x 112.5%) 46,440
Conversion cost P 87,720
Divide by EUP for conversion [59,250 + (15,750 x 1/3)] 64,500 units
Unit cost for conversion P 1.36 per unit
Unit cost for transferred-in 2.70
Total unit cost P 4.06 per unit
Multiply by number of units transferred out x 59,250 units
Cost of finished goods transferred out P240,555

26. C. P203,000
Cost in beg. inventory P 48,200
Cost to complete beg. inventory (10,000 x 40% x P4.50) 18,000
Cost of completed beg. inventory P 66,200
Cost of units started and completed [18,000 x (P3.10 + P4.50)] 136,800
Cost of units completed and transferred out P203,000

27. D. P72,916.33
Step 1: Compute for the FIFO EUP:
Material Conversion
EUP to complete beg. inventory
Material: 7,500 x (100% 100%) 0
Conversion: 7,500 x (100% 40%) 4,500
Units started and completed 65,800 65,800
Normal spoilage (1,100 x 100%) 1,100 1,100
Abnormal spoilage (900 x 100%) 900 900
Add EUP in ending inventory:
Material: 16,200 x 100% 16,200
Conversion: 16,200 x 70% ________ 11,340
Total FIFO EUP 84,000 83,640
Step 2: Compute for the FIFO cost per EUP:
Material Conversion
Current costs P125,000 P360,000
Divide by FIFO EUP 84,000 83,640
FIFO cost per EUP P 1.4881 P 4.3042
Step 3: Assign cost to units in ending inventory:
Material: P1.4881 x 16,200 x 100% P24,107.14
Conversion: P4.3042 x 16,200 x 70% 48,809.18
Cost of ending inventory P72,916.33
Note: Both normal and abnormal spoilage should be included in the computation of EUP. The
spoiled units were 100% complete as to both material and conversion because the inspection
point is at the end of the process.

28. A. P6,373.60 assigned to units transferred out

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 Step 1: Compute for the weighted-average EUP:
Material Conversion
Units transferred out 73,300 73,300
Normal spoilage (1,100 x 100%) 1,100 1,100
Abnormal spoilage (900 x 100%) 900 900
Add EUP in ending inventory:
Material: 16,200 x 100% 16,200
Conversion: 16,200 x 70% ________ 11,340
Total weighted-average EUP 91,500 86,640
Step 2: Compute for the weighted-average cost per EUP:
Material Conversion
Beginning WIP costs P 10,400 P 13,800
Current costs 125,000 360,000
Total costs to account for P135,400 P373,800
Divide by weighted-average EUP 91,500 86,640
Weighted-average cost per EUP P 1.4798 P 4.3144
Step 3: Assign cost to normal spoilage:
Material: P1.4798 x 1,100 x 100% P1,627.76
Conversion: P4.3144 x 1,100 x 100% 4,745.84
Cost assigned to normal spoilage P6,373.60
Note: The normal spoilage should be assigned to units transferred out only because the
inspection point is at the end of the process.

29. B. P431,087.43
Cost of good units [(P1.4798 + P4.3144) x 73,300] P424,713.83
Cost assigned to normal spoilage (see no. 28) 6,373.60
Cost assigned to units transferred out P431,087.43

30. B. 14,502 units; 8,098 units

Units completed and passing inspection 460,800 units
Units failing final inspection 22,600
Total units inspected 483,400 units
Multiply by normal spoilage rate x3 %
Units assigned to normal spoilage 14,502 units
Units assigned to abnormal spoilage: 22,600 14,502 = 8,098 units

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