Process Costing 1

Lala Malala Company manufactures a single product in three departments, Mixing, Boiling and Bottling.
Units of product are started in the Mixing Department and then transferred to the Boiling Department and
finally transferred to Bottling Department where they are completed. Units are inspected at the 80% stage
of completion in the Bottling Department which is after the addition of materials. Good units are transferred
to finished goods inventory when completed. The loss units are scrapped which are estimated at 3% of the
units reaching the inspection.
Materials are added at the beginning of the production process for Mixing and Boiling. Because of the boiling
process losses are incurred and estimated at a rate of 5% and assumed to be discovered at the beginning
of the process. At the end of June, 2,000 units and 5,000 units were still in process in the Boiling and Bottling
Department, which are 45% and 85% complete as to conversion costs respectively. During July, 20,000
units were transferred from the Mixing Department to the Boiling Department and 16,000 were transferred
from the Bottling Department to finished goods inventory. At the end of July, Boiling Department still had
4,000 units in process which are 20% complete as to conversion costs, while Bottling Department still had
4,500 units in process which are 40% complete as to conversion costs and incurred loss units of 1,000.
Cost data related to July operations were as follows:
Boiling Bottling
In Process Current In Process Current month
Transferred In P 5,600 P 57,500 P 19,400 P ?
Materials 3,000 39,960 11,500 49,350
Conversion Cost 605 13,832 2,805 15,742
Required: Complete the cost of production report of the Boiling and Bottling Department based on the data
presented for July, assuming the company uses a process cost system with FIFO costing to account for its
production.