STRATEGIC COST MANAGEMENT ACTIVITY 1 Answer the following problems: 1. Q Paints makes quality paint in one production department. Production begins with the blending of various chemicals, which are added at the beginning of he process and ends with canning of the paint. Canning occurs when the mixture reaches the 90 percent stage of completion. The gallon cans are then transferred to the Shipping Dept. for crating and shipment. Labor and overhead are added continuously throughout the process. Factory overhead is applied at the rate of P3 per direct labor hour. Prior to May, when a change in the process was implemented, work in process inventories were insignificant. The change in process enables more production but results in large amounts of work In process. The company has always used the weighted average method to determine equivalent production and unit costs. Now, production management is considering changing from weighted average method to the first-in, first-out method. The following data relate to actual production during May: Work in Process Inventory, May 1 Direct Material- chemicals Direct Labor (P10 per hour) Factory Overhead PP45,100 5,250 1,550 Costs for May Direct Material - chemicals Direct Material -cans Direct Labor (P10 per hour) Factory Overhead P228,900 7,000 35,000 11,000 Units for May (Gallon) Work in Process Inventory, May 1 (25% complete) 4,000 Sent to Shipping Dept. 20,000 Started in May 21,000 Work in Process Inventory, May 31 (80%complete) 5,000 Required: a. Prepare a cost of production report for May using the WA method b. Prepare a cost of production report for May using the FIFO Method 2. In a single production system, P Company produces gloves. For November 2022, the company’s accounting records reflected the following: Beginning work in process inventory (100%complete as to DM; 30% COMPLETE AS TO DL and 60% complete as to overhead) 12,000 units Units started during the month 90,000 units Ending WIP Inventory (100%complete as to DM, 40% complete as to DL and 80%complete as to overhead 20,000 units Cost compenent: Nov. 1 Direct Material P13,020 Direct Labor 1,908 Overhead During November DM DL Overhead Required: 1. Cost of ProductionReport, WA method 2. Cost of Production Report FIFO Method P4,636 P90,000 45,792 70,824