Acctg 105 - Module 1 - Process Costing Fifo Method

ACCTG 105 –
COST
ACCOUNTING
& CONTROL II
Prepared by:
WILFREDO P. MONDIDO JR.

Instructor
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PROCESS COSTING – FIFO METHOD:
Module 1
EVEN & UNEVEN APPLICATION OF COST
LECTURE NOTES
⮚ TWO BASIC PRODUCT-COSTING SYSTEMS

1. Job Order Costing – a system for allocating costs to groups of unique products. It is
applicable to the production of customer specified products such as the
manufacture of special machines. Each job becomes a cost center for which costs
are accumulated.
2. Process Costing – a system applicable to a continuous process of production of the

same or similar goods, e.g., oil refining and chemical production. Since there is no
need to determine the costs of different groups of products because the product is
uniform, each processing department becomes a cost center.
⮚ PROCESS COSTING METHODS ARE USED BY THE FOLLOWING:

1. Industries producing chemicals, petroleum, textiles, steel, rubber, cement, flour,
pharmaceuticals, shoes, plastics, sugar, and coal.
2. Firms manufacturing items such as rivets, screws, bolts, and small electrical parts.
3. Assembly-type industry which manufactures typewriters, automobiles, airplanes, and
household electric appliances.
4. Service industries such as gas, water and heat.
⮚ CHARACTERISTICS OF PROCESS COSTING:

1. Costs are accumulated by department or cost center.
2. Each department has its own general ledger Work in Process Inventory account.
3. Equivalent units are used to restate work in process inventory to terms of completed
units at the end of the period.
4. Completed units and their corresponding costs are transferred to the last department
and then to finished goods inventory.
5. Total costs and unit costs for each department are periodically calculated and
analyzed with the use of department cost of production report.
⮚ COMPARISON OF JOB ORDER COSTING AND PROCESS COSTING
Job Order Costing Process Costing

1. Unique jobs are worked on during a time 1. Homogenous units pass through a series of similar
period. processes.
2. Costs are accumulated by individual job. 2. Costs are accumulated by processing
department.
3. Unit costs are determined by dividing the 3. Unit costs are computed by dividing the
total costs on the job cost sheet by the individual departments’ costs by the equivalent
number of units on the job. production
4. The job cost sheet provides the detail for the 4. The cost of production report provides the detail
Work in Process account. for the Work in Process account for each
department.
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JOB ORDER COSTING
Job #1
DM
DL Job #2 FG COGS
FOH
Job #3
PROCESS COSTING
Dept #1
DM
DL Dept #2
FOH
Dept #3 FG COGS
Page | 1
⮚ ACCOUNTING PROCEDURES – JOURNAL ENTRIES UNDER BOTH COSTING SYSTEM
TRANSACTIONS JOB ORDER COSTING PROCESS COSTING
(Assuming there are 3 jobs or
departments)
1. Issuance of Direct Materials,
P100,000:
Job/Department 1 – 40,000
Indirect Materials – 10,000
2. Distribution of Labor, P200,000:
Indirect Labor – 20,000
3. FOH charged to production,

50% of Direct Labor
4. Transfer of Goods Completed:

● For Job Order Costing: Assuming
Jobs 1 and 2 are completed
● For Process Costing: Assuming the
units placed in process is 10,000
units, all are completed from
Department 1 to Department 3.
5. Sale of Finished Goods:

● For Job Order Costing: Job 1 is sold
at 50% mark-up based on cost.
● For Process Costing: Assuming 8,000
units are sold at P50 per unit.
⮚ METHODS OF COSTING UNDER PROCESS COSTING

1. FIFO Method – Under this method, it is considered that those units which are first placed in process
are presumed to be the first ones completed and those that are first completed are presumed
to be the first ones transferred out.
Characteristics:
● The work in process beginning in the department will require a separate computation for
equivalent production.
● The units started, completed and transferred will have its own computation for equivalent
production
2. Weighted Average Method – Under this method, there is no assumed flow of manufacturing
operations. (to be further discussed after FIFO)
⮚ METHODS OF APPLICATION
1. Even Application – Under this method, it is considered that at any stage of during the process of
production, the introduction of the three elements of cost are equal with one another. Only one
computation of equivalent production should be made.
2. Uneven Application – Under this method, the introduction of the elements of cost to production
varies at any stage of the process, hence, there should be as many computations of equivalent
production as the elements of cost that are unevenly applied.
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EQUIVALENT UNITS OF PRODUCTION – FIFO METHOD
Under Process Costing, the volume of work done is measured in terms of equivalent units
of production (EUP).
Case 1 – Start of operation Case 5:

Placed in Process 20,000 units In Process, Beg ? units, 1/5 complete
In Process, Dec. 31 6,000 units Placed in Process 28,000 units
Stage of Completion 1/3 Transferred Out 24,000 units
In Process, End 6,000 units, 2/3 complete
Case 2
In Process, Dec. 1 4,000 units Case 6:
Stage of Completion ¼ In Process, Beg 3,000 units, 60% incomplete
Placed in Process 30,000 units Placed in Process 22,500 units
In Process, Dec. 31 5,000 units In Process, End 3,750 units, 2/3 incomplete
Stage of Completion 1/10
Case 7:
Case 3: Transferred Out 6,000 units
In Process, Beg 2,000 units In Process, Beg ? units, 2/5 incomplete
Stage of Completion 3/5 done Placed In Process 7,000 units
Transferred Out 24,000 units In Process, End 1,500 units, 1/3 complete
In Process, End 6,000
Stage of Completion 60% done Case 8:
Transferred Out 140,000 units
Case 4: Finished and on Hand 800 units
Placed in Process 60,000 units In Process, Beg 36,000 units, 2/3 done
In Process, Dec. 31 14,000 units In Process, End 20,000 units, 3/5 done
Stage of Completion 3/7 Placed in Process ?
Case 9 Department 1 Department 2

In Process, Dec. 1 8,000 units 5,000 units
Stage of Completion 1/4 1/10
Placed in Process 50,000 units
Case 10 Department A Department B

Quantity Data:
In Process, Sept. 1 3,000 units 2,000 units
Transferred to Department B 26,000
Stage of Completion 20% 2/7
Case 11 Department I Department II

Quantity Data:
In Process, Sept. 1 ? units, 1/5 done 8,000 units, 1/8 complete
Transferred to Stockroom 38,000 units
In Process, Sept. 30 12,000 units, 1/3 done 3,200 units, 1/10 complete
Case 12 Department M Department P

Quantity Data:
In Process, Sept. 1 5,000 units, 1/5 done 8,000 units, 75% complete
In Process, Sept. 30 7,000 units, 2/7 done ? units, 2/5 complete
Page | 2
COST OF PRODUCTION REPORT – FIFO METHOD
(EVEN APPLICATION OF COSTS)
Problem 1
The ICT Manufacturing Corp. has its product processed in Department M and P. After the
goods are processed in Department M, they are transferred to Department P for additional
processing. From Department P, they are transferred to the stockroom for delivery to customers.
The production data for December 2017 are given below:
Department M Department P
Quantity Data:
In Process, Dec. 31 7,000 units ? units
Cost Data:
In Process, Dec. 1 P 750.00 P 9,481.44
Factory Costs:
Materials P 17,400.00 P 7,920.00
Labor 8,990.00 3,960.00
Factory Overhead 3,480.00 2,640.00
Factory costs are applied evenly throughout the process.
Required:
1. Quantity Schedule
2. Cost of Production Report
3. Journal Entries
4. T-Account for Work In Process
Problem 2
Rosas Manufacturing Co. operates in two consecutive departments, A and B. The
following information is given on its September 2018 production:
Department A Department B
Quantity Data:
In Process, Sept. 1 ? units 16,000 units
Stage of Completion 20% 75%
Cost Data:
In Process, Dec. 1 P 18,680.00 P 113,400.00
Factory Costs:
Materials P 170,000.00 P 102,750.00
Labor 102,000.00 68,500.00
Factory Overhead 2/3 of Labor 50% of Labor
Factory costs are applied evenly throughout the process.
Required:
3. Journal Entries
Page | 3
EQUIVALENT UNITS OF PRODUCTION – FIFO METHOD
(UNEVEN APPLICATION OF COSTS)
Case 1: Case 4:
In Process, Beg 5,000 units In Process, Beg 12,000 units, 2/3
Stage of Completion 3/4 done incomplete
Placed in Process 60,000 units Placed In Process 35,000 units
In Process, End 8,000 In Process, End 10,000 units, 4/5
Stage of Completion 1/5 done complete
All the materials are added at the start of the 70% of the materials are added at the start of the
process. Conversion costs are evenly applied process and the remainder when the goods are
throughout the process. 75% done.
Case 2: Case 5:
In Process, June 1 10,000 units, 2/5 In Process, Beg 8,000 units, 1/8 done
complete In Process, End 6,000 units, 3/4 done
Transferred Out 35,000 units Received from 35,000 units
In Process, End 9,000 units, 2/3 complete preceding dept
All the materials are added at the end of the Materials are added as follows: 20% at the start of
process. Conversion costs are evenly applied the process, 70% at the middle, and 10% at the
throughout the process. end.
Case 3: Case 6:
In Process, Beg 12,000 units, 2/3 In Process, Beg 2,000 units, 20% done
incomplete Received from 50,000 units
Placed in Process 60,000 units preceding dept
In Process, End 20,000 units, 4/5 In Process, End 9,000 units, 60% done
incomplete 30% of the materials are added at start of the
60% of the materials are added at the start of the process, 50% when the goods are 2/5 done and
process and the remainder when the goods are 80% the remainder when the goods are 4/5 done.
done.
COST OF PRODUCTION REPORT – FIFO METHOD

(UNEVEN APPLICATION OF COSTS)
Problem 1
The Laguna Manufacturing Corp. has its product processed in Department I and II. After the goods
are processed in Department I, they are transferred to Department II for additional processing. From
Department II, they are transferred to the stockroom for delivery to customers.
Department I Department II
Quantity Data:
Stage of Completion 20% 5/7
Cost Data:
In Process, Dec. 1 P 3,450.00 P 21,750.00
Factory Costs:
Materials P 50,000.00 P 24,080.00
Labor 18,100.00 11,850.00
In Department I, all the materials are added at the start of the process and factory overhead rate is
50% of labor cost.
In Department II, 60% of the materials are added at the start of the process with the remaining 40%
when the goods are 4/5 done. Factory overhead rate in Department II is P0.40 per equivalent unit of
production.
Required:
3. Journal Entries
Page | 4
Problem 2
Rosas Manufacturing Co. operates in two consecutive departments, A and B. The following information
is given on its September 2018 production:
Quantity Data:
Stage of Completion 1/5 done 60% done
In Process, Sept. 30 9,000 units ? units
Stage of Completion 4/9 done 30% done
Cost Data:
In Process, Dec. 1 P 22,200.00 P70,800
Factory Costs:
Materials P 61,200.00 P 39,600
Labor 31,800.00 20,520
Factory Overhead 50% of Labor P0.30 per EUP
In Department A, materials are added at the middle of the process.
In Department B, 50% of the materials are added at the start of the process, 30% when the goods are
40% done, and the remaining 20% when the goods are 90% done.
Required:
3. Journal Entries
4. T-Account for Work in Process
SUMMATIVE EXERCISES ON PROCESS COSTING – FIFO METHOD
Exercise 1 – Equivalent Units of Production – Even Application of Costs
Case 1: In Process, Beg 18,000 units, 1/3 done

In Process, Beg 4,000 units In Process, End 10,000 units, 1/5 done
Stage of Completion 3/5 done Placed in Process ?
In Process, End 12,000 Case 6:
Stage of Completion 60% done In Process, Beg ? units, 2/5 done
In Process, Beg 8,000 units, ¾ complete In Process, End ? units, 60% done
Placed in Process 60,000 units Note: In process beg is equal to 60% of in process
Transferred Out 58,000 units end
In Process, End ? units, 40% complete
Case 7:
Case 3: In Process, Beg ? units, 1/10 done
In Process, Beg 6,000 units, 40% Placed in Process 17,000 units
incomplete Transferred Out 18,000 units
Placed in Process 45,000 units Finished and on Hand 300 units
In Process, End 7,500 units, 1/3 In Process, End ? units, 1/8 done
incomplete Note: In process end is equal to 80% of that in
beginning work in process
Case 4:
Transferred Out 12,000 units Case 8:
In Process, Beg ? units, 1/5 incomplete In Process, Beg ? units, ¼ done
Placed In Process 14,000 units Placed in Process ? units
In Process, End 3,000 units, 2/3 In Process, End 8,000 units, 1/8 done
complete Placed in Process, 26,000 units
Completed &
Case 5: Transferred
Transferred Out 70,000 Equivalent units of 28,500
Finished Goods on Floor 400 Production
Page | 5
Exercise 2 – Equivalent Units of Production – Uneven Application of Cost
Using the same information in Exercise 1, compute for the EUP of materials under the following cases:
Case 1 All materials are added at the start of the process.
Case 2 All the materials are added at the middle of the process.
Case 3 40% of the materials are added at the start of the process and the remainder when the goods are
70% done.
Case 4 Materials are added as follows: 25% at the start, 50% at the middle and 25% at the end.
Case 5 Materials are added as follows: 80% at the start and 20% at the end.
Case 6 Materials are added as follows: 20% at the start, 50% are added when the goods are 3/5 done and
the remaining 30% are added at the end.
Case 7 All materials are added at the end of the process.
Case 8 Materials are added as follows: 35% at the start, 20% are added when the goods are 20% done and
the remaining 45% are added at the end.
Exercise 3 – Cost of Production Report (Even and Uneven Application of Cost)

The production data of Pagadian Mtg. Corp for December 2017 are given below:
Department I Department II
Quantity Data:
In Process, Sept. 1 20,000 units, 30% done 40,000 units, 25%
complete
In Process, Sept. 30 18,000 units, 2/3 done ? units, 3/8 incomplete
Cost Data:
In Process, Dec. 1 P 242,000.00 P586,000
Factory Costs:
Materials P 500,000.00 P 252,000
Labor 300,000.00 180,000
Factory Overhead 2/3 of Labor P0.50 per EUP
In Department I, all costs (materials and conversion costs) are evenly applied throughout the process.
In Department II, materials are added as follows: 20% at the start, 55% are added when the goods are
3/5 done and the remaining 25% are added at the end.
Required:
3. Journal Entries
MULTIPLE CHOICE QUESTIONS
For Items 1 – 2. A department adds raw materials to a process at the beginning of the process and incurs
conversion costs uniformly throughout the process. For the month of December, there were no units in the
beginning work in process inventory; 200,000 units were started into production in December; and there were
50,000 units that were 60% complete in the ending work in process inventory at the end of December.
1. What were the equivalent units of production for materials for the month of January?
a. 220,000 equivalent units c. 160,000 equivalent units
b. 180,000 equivalent units d. 200,000 equivalent units
2. What were the equivalent units of production for conversion costs for the month of January?
3. A Company had the following department data:

Physical Units
Work in process, June 1, 40% undone 40,000
Completed and transferred out 180,000
Work in process, June 30, 70% done 60,000
Page | 6
Materials are added at the beginning of the process. What is the total number of equivalent units for
materials in June?
a. 180,000 c. 228,000
b. 244,000 d. 240,000
4. A process with 2,000 units of beginning work in process, completed and transferred out 25,000 units during
a period. There were 12,500 units in the ending work in process that were 60% complete as to conversion costs.
Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How
much is equivalent units of production for the period for material costs?
5. Cinder Company had the following department information for the month:
Total materials costs P200,000
Equivalent units of materials 10,000
Total Labor Costs P200,000
Total Factory Overhead Costs P100,000
Equivalent units of conversion costs 20,000
How much is the total manufacturing cost per unit?
a. Php35.00 c. Php15.00
b. Php16.67 d. Php20.00
6. Minor Company had the following department data:

Physical Units
Work in process, July 1 30% undone 16,000
Placed in Process, Completed and Transferred 72,000
Work in process, July 31 60% done 24,000
Materials are added at the beginning of the process. What is the total number of equivalent units for materials
in July?
a. 72,000 c. 91,200
b. 97,600 d. 96,000
7. Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 3,000
units of ending work in process at 80% completion and 14,000 placed in process. There are no beginning units
in the department. Conversion costs occur evenly throughout the entire production period. What are the
equivalent units for conversion costs for the current period?
a. 17,000 c. 2,400
b. 16,800 d. 13,400
8. A process with no beginning work in process, completed and transferred out 45,000 units during a period
and had 30,000 units in the ending work in process inventory that were 70% incomplete. The equivalent units
of production for the period were
a. 45,000 equivalent units. c. 54,000 equivalent units.
b. 75,000 equivalent units. d. 22,500 equivalent units.
9. A process with no beginning work in process, completed and transferred out 10,000 units during a period
and had 5,000 units in the ending work in process that were 50% complete. How much is equivalent units of
production for the period for conversion costs?
10. A process with 800 units of beginning work in process that were 90% complete; completed and transferred
out 10,800 units during a period. There were 5,000 units in the ending work in process that were 50% complete
as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are
90% complete. How much is equivalent units of production for the period for material costs?
Page | 7
11. Gantner Company had the following department information about physical units and percentage of
completion:
Physical Units
Work in process, May 1 (60%) 36,000
Work in process, May 31 (40%) 30,000
If materials are added at the beginning of the production process, what is the total number of
equivalent units for materials during May?
a. 126,000 c. 116,400
b. 120,000 d. 102,000
12. Hanker Company had the following department data on physical units:
Work in process, beginning 1,000
Work in process, ending 800
Materials are added at the beginning of the process. What is the total number of equivalent units for
materials during the period?
a. 4,200 c. 4,800
b. 800 d. 3,000
REQUIREMENTS
Part I – Compute for the Equivalent Units of Production (EUP) for each independent case by
preparing a Quantity Schedule. Assume that all product costs (materials and conversion costs) are
evenly applied throughout the process.

In Process, Beg 10,000 units In Process, End ? units, 5/8 done
Stage of Completion 1/4 done Note: In process end is equal to 80% of that in
Placed in Process 50,000 units beginning work in process
In Process, End 12,000
Stage of Completion 60% done Case 6:
In Process, Beg ? units, 30% done
Case 2: Placed in Process 120,000 units
In Process, Beg ? units, ¾ incomplete Transferred Out 130,000 units
Placed in Process 40,000 units Finished and on Hand 10,000 units
Transferred Out 50,000 units In Process, End ? units, 25%
In Process, End 12,000 units, 50% incomplete
complete Note: In process end is equal to 75% of that in
beginning work in process
Case 3:
In Process, Beg 8,000 units, 40% Case 7:
complete In Process, Beg ? units, 3/4 done
In Process, End 16,000 units, 5/8 Placed in Process ? units
incomplete In Process, End 4,000 units, 1/8 done
Total Units to be 80,000 units Placed in Process, 10,000 units
Accounted For Completed & Transferred
Finished and on Hand 3,000
Case 4: Equivalent units of 14,250
Transferred Out 20,000 units Production
In Process, Beg 8,000 units, 1/5 done
Finished and on Hand 4,000 units Case 8:
In Process, End ? units, 2/3 complete In Process, Beg 10,000 units, 70%
Total Units to be 30,000 done
Accounted For Transferred Out 25,000 units
In Process, End ? units, 60% done
Case 5: Equivalent units of 27,000
In Process, Beg ? units, 1/10 done Production
Total Units to be 30,000 units
Accounted For
Page | 8
PART II – Using the same information in Part I, however assuming the materials are not evenly applied.
Compute for the EUP of Materials only under the following cases:
Case 1 All materials are added at the start of the process.

Case 2 All the materials are added at the middle of the process.
Case 3 60% of the materials are added at the start of the process and the remainder when the goods
are 60% done.
Case 4 Materials are added as follows: 45% at the start, 30% at the middle and the remainder at the
end.
Case 5 Materials are added as follows: 10% at the start of the process, 20% at 10% of the process, 30%
at 40% of the process and the remainder at the end of the process.
Case 6 Materials are added as follows: 20% at ¼ of the process, 30% at 3/5 of the process, and the
remainder at 80% of the process.
Case 7 All materials are added at the end of the process.
Case 8 Materials are added as follows: 10% at the start, 30% are added when the goods are 50% done,
40% when the goods are 75% done and the remainder are added at the end.
Part III – Compute for the Equivalent Units of Production (EUP) by preparing a Quantity Schedule for
each department.
PROBLEM 1
In Process, Sept. 1 ? units 40,000 units
Stage of Completion 40% done 60%
In Department A, all costs (materials and conversion costs) are evenly applied throughout the process.
In Department B, materials are added as follows: 40% at the start, 35% are added when the goods are
3/5 done and the remaining 25% are added at the end.
Requirements:
3. Journal Entries
PROBLEM 2
Department I Department II Department III

In Process, Beg 30,000 units, 60,000 units, 1/4 40,000 units, 65%
45% done incomplete complete
Received from preceding dept. 153,000 units
In Process, End ? units, 1/3 ? units, 7/8 65,000 units, 1/5
done incomplete incomplete
In Department I, all the materials are added at the start of the process.
In Department II, materials are added as follows: 25% at ¼ of the process, 40% at 3/5 of the process,
and the remaining 35% at 80% of the process.
In Department III, all costs (materials and conversion costs) are evenly applied throughout the process.
Requirements:
3. Journal Entries
Page | 9
PROBLEM 3
The BSA Manufacturing Corp. has its product processed in Department I, II and III. After the goods are
processed in Department I, they are transferred to Department II and III for additional processing. From
Department III, they are transferred to the stockroom for delivery to customers.
Department I Department II Department III
Quantity Data:
In Process, Beg 45,000 units, 1/3 50,000 units, 40% 60,000 units, 60%
done undone complete
Placed in Process ? units
Received from Previous Department 230,000 units ? units
Total Units to be Accounted For 270,000 units ? units ? units
In Process, End ? units, 5/8 done ? units, 5/9 undone ? units, 35%
incomplete
Equivalent Units of Production (EUP) 200,000 units
Cost Data:
In Process, Dec. 1 P180,000 P600,000 P300,000
Factory Costs:
Materials P675,000 P390,000 P200,000
Labor 480,000 120,000 100,000
Factory Overhead 50% of Labor P0.40 per EUP 120% of Labor
In Department I, all the materials are added at the start of the process.
In Department II, materials are added as follows: 50% at ¼ of the process, 30% at 2/4 of the process,
and the remainder at 70% of the process.
In Department III, all costs (materials and conversion costs) are evenly applied throughout the process.
Requirements:
3. Journal Entries
PART IV – MULTIPLE CHOICE PROBLEMS
For Items 1-2. A department adds 60% of raw materials at the beginning of the process and the remainder at
the end of the process; and incurs conversion costs uniformly throughout the process. For the month of
January, there were 10,000 units in the beginning work in process inventory that were 50% complete; 40,000
units were started into production in January; and there were 20,000 units that were 40% complete in the
ending work in process inventory at the end of January.
1. What were the equivalent units of production for materials for the month of January?
a. 32,000 units
b. 33,000 units
c. 36,000 units
d. 50,000 units
2. What were the equivalent units of production for conversion costs for the month of January?
a. 32,000 units
b. 33,000 units
c. 36,000 units
d. 50,000 units
3. Minor Company had the following department data:

Physical Units
Placed in Process, Completed and Transferred 140,000
Materials are added at the end of the process. What is the total number of equivalent units for
materials in July?
Page | 10
a. 168,800
b. 172,000
c. 188,000
d. 220,000
4. Gantner Company had the following department information about physical units and percentage
of completion:
Physical Units
Work in process, May 1 (60% undone) 36,000
Work in process, May 31 (40% undone) 30,000
If materials are added at the beginning of the production process, what is the total number of
equivalent units for conversion costs?
a. 120,000
b. 129,600
c. 156,000
d. 165,600
For Items 5 – 6. GANDA Inc. employs FIFO process costing system in accounting for its product. For the
year ended, December 31, 2020, the following data are provided:
• The 30,000 work-in-process inventory on January 1, 2020 is 40% complete as regards to
conversion cost while the 20,000 work-in-process inventory on December 31, 2020 is 90%
incomplete as to conversion cost.
• The total units started during the year amounted to 60,000 units.
• There is no spoilage during the period.
• It is the company policy to apply direct labor and factory overhead uniformly throughout
the period while ¾ of direct materials are added at the start of the process while the
remaining direct materials are added at the end of the process.
• The cost of January 1, 2020 work-in-process inventory is P1M.
• The total manufacturing cost for the year consisted of P1M-direct material, P3M-direct
labor and P4M-factory overhead.
5. What is the cost per equivalent unit of production of Direct Materials?

a. 19.20
b. 16
c. 14.81
d. 11.76
6. What is the cost per equivalent unit of production of Conversion Cost, respectively?
a. 130
b. 116.67
c. 89.74
d. 100
For Items 7 – 10. The quantity schedule based on the production of Dept B of Sumigla Mfg Co. for May
2018 is as shown below:
Actual
In Process, May 1 10,000 3/5
done
Received from Dept A 50,000
Units to be Accounted For 60,000 Materials Conversion Costs
EUP EUP
In Process, May 1, Finished & Transferred ? ? ? ? ?
Received, Finished and Transferred 30,000 100% ? 100% ?
In Process, May 31 ? ? ? 3/10 ?
Units Accounted For ? ? ?
The cost data are as follows:
In Process, May 1 P88,000
Received from preceding dept (Transferred in Cost) P250,000
Page | 11
Factory costs:
Materials P252,000
Labor P120,000
FOH P80,000
Conversion costs were evenly applied throughout the process. Materials are added as follows:
50% at the start, 30% at the middle and the remainder at the end.
7. What is the equivalent units of production for materials?

a. 42,000
b. 45,000
c. 48,000
d. 60,000
8. In the cost of production, what is the total unit cost?

a. P5.00
b. P11.00
c. P15.00
d. P16.00
9. How much should be the accumulated cost of work in process as of May 31?
a. P90,000
b. P100,000
c. P190,000
d. P220,000
10. What is the unit cost of the transferred-out units?

a. P5.00
b. P11.00
c. P15.00
d. P16.00
--- E N D ---
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Acctg 105 - Module 1 - Process Costing Fifo Method

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ACCTG 105 –

WILFREDO P. MONDIDO JR.

⮚ TWO BASIC PRODUCT-COSTING SYSTEMS

2. Process Costing – a system applicable to a continuous process of production of the

⮚ PROCESS COSTING METHODS ARE USED BY THE FOLLOWING:

⮚ CHARACTERISTICS OF PROCESS COSTING:

⮚ COMPARISON OF JOB ORDER COSTING AND PROCESS COSTING

Job Order Costing Process Costing

2. Distribution of Labor, P200,000:

3. FOH charged to production,

4. Transfer of Goods Completed:

5. Sale of Finished Goods:

⮚ METHODS OF COSTING UNDER PROCESS COSTING

Case 1 – Start of operation Case 5:

Case 9 Department 1 Department 2

Case 10 Department A Department B

Case 11 Department I Department II

Case 12 Department M Department P

COST OF PRODUCTION REPORT – FIFO METHOD

SUMMATIVE EXERCISES ON PROCESS COSTING – FIFO METHOD

Exercise 1 – Equivalent Units of Production – Even Application of Costs

Case 1: In Process, Beg 18,000 units, 1/3 done

Exercise 3 – Cost of Production Report (Even and Uneven Application of Cost)

MULTIPLE CHOICE QUESTIONS

3. A Company had the following department data:

6. Minor Company had the following department data:

Case 1: Transferred Out 22,000 units

Case 1 All materials are added at the start of the process.

Department I Department II Department III

PART IV – MULTIPLE CHOICE PROBLEMS

3. Minor Company had the following department data:

5. What is the cost per equivalent unit of production of Direct Materials?

7. What is the equivalent units of production for materials?

8. In the cost of production, what is the total unit cost?

10. What is the unit cost of the transferred-out units?

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