6 ALVARO,FERNEL JEAN C.

AE212-1742 TTHS 3-5PM

EXERCISES:
Exercise 6-5 EVEN APPLICATION – FIRST DEPT

Shankar Manufacturing Company produces a product that is manufactured in two

departments. Data related to February operations in the first department are:

Costs to the Dept Beg Invty Added this period

Materials P2,940 P46,530
Direct labor 390 18,860
Factory overhead 585 27,150

At the end of January, there were 100 units in process which were 60% complete. During the current
month, 850 units were transferred to the next department. At the end of the month, there were 150
units still in process with 50% completion. Prepare a cost of production report for month.

Units:
In process beg, Jan. 31, 60% complete 100u
Transferred to the next dept. 850u
In process end, Feb. 29 , 50% complete 150u

Costs: Beg. Inventory P 3,915

Added in February: Materials P 46,530
Labor 18,860
Overhead 27,150

[A] FIFO;
Shankar Manufacturing Company
Cost of production report
For the Month Ended February 29

Quantity Schedule
WIP, beginning 100
Started in process 850
Total units accounted for 950

FIFO
Actual Units Work done Equivalent Production
WIP, beg. finished 100 60% 60
Transferred 700 100% 700
WIP, end 150 50% 75
Total units accounted for 950 835

Cost Schedule Total Cost Unit Cost

Materials P 46,530 55.72
Direct Labor 18,860 22.59
Factory overhead 27,150 32.51
Total Factory Cost P 92,540 P 110.82
Add: In process, Jan. 31 60
Total Cost to be Accounted for P 92,600

Accounted for as follows:

Finished and Transferred 850
In process, Jan. 31 100
Cost last month P 100
Cost this month 6,650 P 6,750
In process, Feb. 29 8,312
Total cost Accounted For P 15,062
[B] Average
Shankar Manufacturing Company
Cost of production report
For the Month Ended February 29

Quantity Schedule Work done Equivalent Production

Finished and Transferred 850 100% 850
WIP end 150 50% 75
Total units 1,000 925

Cost Schedule
Total Cost Unit cost
Materials 49,470 49.47
Labor 19,250 19.25
Overhead 27,735 27.74
Total Cost 96,455 96.46

Accounted for as follows:

Finished and Transferred 850 u P 81,991
In process, Feb. 29 150 u P 7,235
Materials 49,470 56,705
Total Cost Accounted For P 138,696

Exercise 6-6 EVEN APPLICATION – SUCCEEDING DEPT

Astro2 Inc. uses two producing departments namely X and Y. In Dep’t Y, the second dept,
costs are applied evenly throughout the process. Prepare the cost of production report of Dept Y
using the following data for February of the current year:

WIP, beg – 6,000 units, ¼ done,

P19,710 (50% of which was from
department X, 20% for materials,
10% labor, 20% overhead)
Received from Dep’t X – 35,000
units @ P3
Factory Costs : Materials,
P20,770; Direct Labor, P8,375;
FOH, P16,750
WIP, end – 8,000 units ¼ don

Astro2 Inc.
Cost of Production Report
For the Month Ended February 29
Department Y

Quantity data:
WIP, beg 6,000
Started in Process 35,000
Units to be Accounted for 41,000

Accounted for as follows: Actual Work Done Equivalent Production

WIP, beg 6,000 75% 4,500
Finished and Transferred 27,000 100% 27,000
WIP, end 8,000 25% 2,000
Total 41,000 33,500
Exercise 6-7. UNEVEN APPLICATION OF COST

Zay Corporation manufactures a product in two departments, Cutting and Assembly. During
February, the Assembly department received 2,100 units from the Cutting department and 2,000 units
were transferred out of the Assembly department to finished goods. At the end of the month, 500
units were still in process, they were 80% complete as to materials and 60% complete as to conversion
cost. Cost data related to February operations follow:

Costs charged to the dep’t Beg. Invty Added this Period

Costs from preceding Dep’t P11,800 P63,200

Materials 4,000 21,200

Direct labor 1,200 17,660

Factory Overhead 2,400 35,320

Required: Prepare the February cost of production report for the Assembly Dep’t

Zay Corporation
Cost of Production Report
For the Month of February
Assembly Dep’t

Quantity Schedule
Units
In process, Feb. 1 2,100
Transferred 2,000
Units to be Accounted for 4,100

Accounted for as follows: Actual Work done Material Work done Conversion Cost
Finished and Transferred
In process, beg 2,100 100% 2,100 100% 2,100
Transferred 1,500 100% 1,500 100% 1,500
In process, end 500 80% 400 60% 300
Total Units as Accounted 4,100
Total Equivalent Production 4,000 3,900

Cost Analysis Total Cost Unit Cost

Materials P 25,200 6.15
Labor 18,860 4.6
Overhead 37,720 9.2
Total Factor Cost P 81,780 P 19.95

Exercise 6-7 EVEN APPLICATION – MULTIPLE DEPTS

The ICT Manufacturing Corp. has its product processed in Depatments M and P. The
production data for March are given below:

Department M Department P

Quantity data:

WIP, beg 5,000 8,000

 Stage of Completion 1/5 ¾

Units placed in process 30,000 0

Units transferred out ? 28,000 30,000

WIP, end 7,000 ?(22,000)

Stage of Completion 2/7 2/5

Cost data:

WIP, beg P750 P9,481.44

Factory costs:

Materials 17,400 7,920

Direct labor 8,990 3,960

Factory overhead 3,480 2,640

Required: Prepare the cost of production report for the two departments.

ICT Manufacturing Corp.

Cost of Production Report
For the Month Ended March 31
Department M

Quantity Schedule
WIP, beg 5,000
Started in process 30,000
Units to be Accounted 35,000

Accounted for as follows: Actual Work Done Material Work done Conversion Cost
Finish and Transferred 28,000 100% 28,000 100% 28,000
WIP, end 7,000 2/7 2,000 100% 7,000
Total Units as Accounted 35,000
Total equivalent production 30,000 35,000

Cost Analysis Total Cost Unit Cost

Materials P 17,400 0.49
Labors 8,990 0. 25
Overhead 3,480 0.10
Total cost to be Acctd for P 29,870 P 0.84

Accounted for as follows:

Finish and Transferres P 28,750
WIP, end 7,000
Total Cost Accounted for P 35,000

ICT Manufacturing Corp.

Cost of Production Report
For the Month Ended March 31
Department P
Quantity Schedule
WIP, beg 8,000
Units to be Accounted 8,000

Accounted for as follows: Actual Work Done Materials Work Done Conversion Cost
Finished and Transferred 30,000 100% 30,000 100% 30,000
In process, March 31 (22,000) 2/5 ( 8,800 ) 100% (22,000)
Total Unit as Accounted 8,000
Total Equivalent Production 21,200 8,000

Cost Analysis Total Cost Unit Cost

Cost from Preceding Dep’t
Last Month P 750 0.09
This Month 9,481.44 1.19
Total P 10,231.44 1.28

Cost this Department Total Cost Unit Cost

Materials P 7,920 0.99
Labor 3,960 0.50
Overhead 2,640 0.33
Total Cost to be acctd. for P 14,520 P 1,.82

Exercise 6-8 UNEVEN APPLICATION – MULTIPLE DEPTS

Mahaba Manufacturing Co. operates three departments with the following processes:
Cutting – This department adds 60% of the materials at the start of the process, 40% when the process
is 4/5 completed, and applies labor and overhead uniformly to production.
Grinding – This department adds all the materials at the end of processing, applying conversion costs
evenly throughout the process.
Mixing – This department adds 30% of the materials at the beginning of processing, 30% when
processing is ½ completed, and 40% at the end of the process. It applies conversion costs evenly
throughout the process.
Production data for the month of March of the current year follows:

Quantity data: Cutting Grinding Mixing

WIP, beg 10,000 8,000 6,000

Stage of Completion 3/4 4/5 1/3

Transferred to next Dep’t. 42,000 44,000 46,000

WIP, end 8,000 6,000 4,000

Stage of Completion 2/5 2/3 ¾

Cost data:

WIP, beg P116,100 P166,800 P223,800

Factory costs:

Materials 244,800 132,000 419,400

Direct labor 226,200 249,600 282,000

FOH 113,100 124,800 141,000

Required: Prepare the cost of production report for each of the three departments.
Mahaba Manufacturing Company
Cost of Production Report
For the Month of March 31
Cutting Department

Quantity Schedule:
WIP, beginning 10,000
Started in process 42,000
Total units to be accounted for 52,000

Accounted for as follows: Actual Work Done Equivalent Production

Finished and Transferred:
Started in process 44,000 100% 44,000
WIP, end 8,000 2/5 3,200
Unit accounted for 52,000
Equivalent Production 47,200

Cost Analysis: Total Cost Unit Cost

Materials P 244,800 P 5.19
Labor 226,200 4.79
Overhead 113,100 2.40
Total cost to be accgt. For P 584,100 P 12.38

Accounted for as follows:

Finished and transferred: Total Cost
Started in process @ 12.38 42,000 P 519,960
Work in process, end 8,0000 39,616
Total cost as accounted for P 559,576

Mahaba Manufacturing Company

Cost of Production Report
For the Month of March 31
Grinding Department

Quantity Schedule:
WIP, beginning 8,000
Started in process 44,000
Total units to be accounted for 52,000

Accounted for as follows: Actual Work Done Equity Production

Finished and Transferred:
Started in Process 46,000 100% 46,000
Work In Process, end 6,000 2/3 4,000
Unit accounted for 52,000
Equivalent Production 50,000

Cost Total Cost Unit Cost

Materials P 132,000 2.64
Labor 249,600 4.99
Overhead 124,800 2.50
Total factory cost P 506,400 P 10.13
Add: Cost from Dep’t Cutting 584,100 12.38
Total cost to be accounted for P 1,090,500 22.51
Accounted units
Finished and Transferred 44,000 u
Started in Process:
Cost Prior dep’t @ 12.38 P 544,720 532,340
Cost Prior to this dep’t @ 10.13 445,720 435,590
Total cost transferred of Dep’t @22.51 P 990,440
Work In process, end 6,000 u
Cost prior dep’t @12.38 P 74,280
Cost this dep’t @ 10.13 40,520 114,800
Total cost as accounted for P 1,105,240

Exercise 6-9 UNEVEN APPLICATION – MULTIPLE DEPTS

The Matis Manufacturing Company uses average costing and manufactures a single product in two
producing departments. For the month of April, the cost and production data were as follows:

Mixing Finishing

Quantity Data:

WIP, beg 5,000 6,000

Stage of Completion

Materials 100% -0-

Conversion Cost 50% 60%

Started in Process 10,000

Transferred to the next Dep’t. 10,000 11,000

WIP, end 5,000 5,000

Stage of Completion

Materials 80% -0-

Conversion Cost 40% 50%

Cost data:

Cost in WIP, beg

Costs from preceding Dep’t - P63,000

Materials P42,000 -

Direct labor 35,000 62,500

Factory Overhead 20,500 45,000

Costs added this month

Materials 90,000 -

Direct labor 52,000 140,000

Factory Overhead 37,500 90,000

Prepare a cost of production report for both departments for the month of April.