BAC 522-ACCOUNTING INTEGRATION 2-ADVANCED ACCOUNTING
1ST SEMESTER, AY 2020-2021
PROBLEM A
Yakal Furniture produces coffee table in a two-department process, Cutting/Assembly and Lamination. Varnish is
added in the Lamination Department when the goods are 60% complete as to overhead. Spoiled units are found
on inspection at the end of production. The company uses the weighted average method in costing inventory.
Production data in the Lamination Department for October of the current year:
In Process, beginning (89% labor; 70% overhead
2,000
Transferred in
14,900
In Process, end (40% labor, 20% overhead)
3,000
Normal spoilage (found at final quality inspection)
200
Abnormal Spoilage (found at 30% completion and 15% as to overhead
due to misalignment of the sanding machine)
400
Cost data for the month:
In process, beginning
Transferred in
P 15,020
Varnish
1,900
Direct labor
4,388
Overhead
11,044
Current period costs:
Transferred in
137,080
Varnish
14,030
Direct labor
46,000
Overhead
113,564
Required: Cost of production Report.
PROBLEM B
Apitong Company uses the FIFO method of process costing. The company’s cost accountant has provided you
with the following information in its Finishing Department for the month of May:
In Process, beg. (100%M, 70% converted)- 10,000 units; Transferred out-256,000 units; In process end
(100% M, 60 % converted)-37,000 units.
Current Period
Prior period
Prior period Dept. cost
P14.00
P13.85
DM cost per EUP
4.75
5.00
CC per EUP
11.50
10.50
Required: Cost of production report.
MULTIPLE CHOICE-PROBLEMS
Kyle Confections manufactures Peach-O-Yum; a chocolate covered, peach-filled candy bar. Kyle uses a costing
system to collect costs related to production. Two production departments, Processing and Packaging, are used to
produce Peach-O-Yum. The first step in the Processing Department is to add the peaches. The peach is then
cooked and seasoned. Conversion costs are assumed to be incurred evenly throughout the production process.
The last step in the processing Department before going to Packaging is the covering of the peach with chocolate.
In the Processing Department last month, Kyle had work in process of 18,500 cases which were 25% processed.
Kyle ended the current month with 12,800 cases which were 20% processed. Kyle started work on 84,400 cases
during the current month.
1.
Under the weighted average method, what are the Processing Department’s equivalent units of
production for conversion for the current month?
a. 84,400 cases
b. P90,100 cases
c. 92,660 cases
d. 102,900 cases
2.
Under the FIFO method, what are the Processing Department’s equivalent units of production for
chocolate for the current month?
a. 71,600 cases
b. 90,100 cases
c. 88,035 cases
d. 88,400 cases
Alberto Company has the following information for July: Units started, 100,000 units; Beginning work in process,
20,000 units (35% complete); Normal spoilage, 5,000 units ; Abnormal spoilage, 3,500 units; Ending work in
process, 14,500 (70% complete); Transferred out, 97,000 units; Beginning work in process cost: Materials,
P15,000; Conversion, P10,000. All materials are added at the start of the production process. Alberto inspects
goods at the end of processing.
3.
If the costs per EUP for materials and conversion are P1.00 and P1.50, respectively, using FIFO, what is the
total cost assigned to completed and transferred units?
a. P245,750
b. P249,500
c. P237,000
d. P224,938
This study source was downloaded by 100000779153224 from CourseHero.com on 02-28-2022 06:42:30 GMT -06:00
https://www.coursehero.com/file/74661021/BAC-522-PROCESS-COSTING-NOVEMBER-2020doc/
Information taken from the Costs to Account For schedule of a company with two production departments is as
follows:
Department A – Initial Processing Department
Costs Added by Department:
Equivalent Unit Cost
Direct materials
P4.29
Direct labor
2.93
Factory overhead
1.17
Department B – Final Production Department
Equivalent Production Equivalent Unit cost
Costs Added by Department
Direct labor
20,000
P3.19
Factory overhead
20,000
1.20
4.
If Department A transferred 32,000 units into Department B, what is the total cost to be accounted for in
Department B?
a. P356,280
b. P255,600
c. P419,716
d. P87,800
Marshall Company uses process costing in its two production departments. The following information pertains to
Department 2 for August 2020.
a. Normal spoilage is 5% of good output; inspection and identification of spoilage takes place at the 90%
stage of completion; materials are added after inspection.
b. Department 2 received 14,000 units from Department 1 at a cost of P140,000. Department 2 costs
were P12,000 for materials and P89,250 for conversion costs.
c. A total of 8,000 units were completed and transferred to finished goods. At the end of the month,
5,000 units were still in process, estimated to be 60% complete as to conversion costs.
5.
6.
The equivalent units of production for conversion was:
a. 11,270
b. 11,900
c. 14,000
The cost of completed units would be:
a. P152,000
b. P155,354
c. P158,840
d. 11,540
d. P158,700
Pasay Manufacturing Company manufactures fire extinguisher and uses FIFO method for process and inventory
costing. In valuing the finished goods inventory, the costs of units completed from the WIP beginning are kept
separate from the costs of those started and completed during the period. The total manufacturing costs for the
month of June were P924,000. There were 5,500 units that were completed during the month. All costs were
uniformly applied to production. At the beginning of the period, there were 2,500 units in process that were 20%
incomplete with a total costs of P448,000 and 1,200 of completed fire extinguishers with a total costs of P268,800.
At the end of the month, there were 1,000 units in process that were 50% complete and 1,400 of completed fire
extinguishers.
7.
The cost of completed units at the end of the month is
a. P369,600
b. P235,200
c. P215,600
d. P323,400
8.
The cost of goods sold for the month is
a. P1,363,600
b. P1,224,300
c. P1,215,900
d. P1,201,900
Sarah Company uses a process cost system for Product C, which requires four processes. Work in process,
Department 4, shows the following data for May: Balance, May 1 ( 1,600, units, 1/4 completed )- P 8,120; from
Department 3 (4,300 units)- P 15,050; Direct labor- P24,500; factory overhead- P6,370. Processing for the month
of May consisted of completing the 1,600 units in process on May 1, completing the processing on 3,500
additional units, and leaving 800 units that are 1/4 completed. During June the charges to Work in process in
Department 4 shows the following data: from Department 3, (5,500 units)-P16,500; Direct labor- P23,520;
Factory overhead- P5,880. By June 30 all beginning work in process units were completed, of the 5,500 new units
1,500 were left, only 1/5 completed. (FIFO method)
9.
The cost of ending inventory for the month of May was:
a. P1,260
b. P9,000
c. P6,300
d. P4,060
10.
The cost of goods completed and transferred to finished good for the month of June was:
a. P49,980
b. P47,200
c. P43,360
d. P43,660
end**********end
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