Exercise 6.1.

Industrial Sar, S.A., at the beginning of the fiscal year April 1, 20XX, presents the
following information

Banks 2000000.00
Raw materials warehouse 2000000.00
In-process production inventory 135920.00
Finished goods warehouse 864080.00
Accounts payable 2000000.00
Capital Stock 3000000.00

During the month of April 20XX, the following consumptions were recorded in the
process of

Process 1
Initial in-process production inventory, 3200 liters with the following stages of progress

Concept Degree of progress (%) Total Cost

Raw Materials 100% 92480.00
Labor Indirect 75% 38880.00
Charges 75% 4560.00
The costs incurred in the month of April 20XX were: Raw materials:

Item A, 26250 liters at $18.50 per liter. 485625.00

Item B, 24000 liters at $23.00 per liter. 552000.00
Item C, 7500 liters at $28.80 per liter. 216000.00
Labor, 32400 hours at $22.00 per hour. 712800.00
Indirect charges, $96000.00. 96000.00

Production completed during the month of April and transferred to process

2 was 42000
The final inventory of the process was 3800 liters with the following levels
of progress:

Degree of progress (%)

100%
85%
85%

Concept
Raw materials Labor Indirect Charges
Requested:
a) To present the costs of each process in ballots.
b) Prepare cost report for each process.
c) Record journal entries in G/L schemes.
 the following data: manufacture of item X:

Process 2
ce and costs: The costs incurred in the month of April 20XX were as follows:
Labor, 31680 hours at $25.00 per hour. 792000

Indirect Charges, $90000.00. 90000

Production completed during the month of April and shipped to the

warehouse d

liters.
e finished goods was 42,000 liters

Productio
Concept
n
finished
 Process 1
Schedule 1
Determination of production processed, expressed
in equivalent units

Final inventory
Finished
production Percentage of Equivalent
Volume progress units Volume
Concept
Raw materials 42000 3800 100% 3800 3200
Labor 42000 3800 85% 3230 3200
Indirect charges 42000 3800 85% 3230 3200

Schedule 2
Calculation of unit costs
of processed production

Processed
Concept Costs incurred production for Unit cost
the period

Raw materials 1253625 42600 29.43

Labor 712800 42830 16.64
Indirect charges 96000 42830 2.24
Total 2062425 48.31

Schedule 3
Calculation of average unit costs

Units equivalent to fully

Cost completed

Processed
Incurred from the Initial production
Concept Initial inventory period Total inventory for the
period
Raw materials 92480 1253625 1346105 3200 42600
Labor 38880 712800 751680 2400 42830
Indirect charges 4560 96000 100560 2400 42830
Total 135920 2062425 2198345

Schedule 4
Valuation of finished production

Cost

Unitary Total
 Raw materials 42000 29.39 1234419
Labor 42000 16.62 698000
Indirect charges 42000 2.22 93379
Total 48.23 2025799

Schedule 5
Valuation of ending production inventory in p

Final inventory C

Concept Percentage of
Volume progress Equivalent units Unitary

Raw materials 3800 100% 3800 29.39

Labor 3800 85% 3230 16.62
Indirect charges 3800 85% 3230 2.22
Total 48.23

Productio
Concept
n
finished
esada

Initial inventory

Percentage of Equivalent units Processed Finished

progress production for the Concept production
period

100% 3200 42600 Semi-product 42000

75% 2400 42830 Labor 42000
75% 2400 42830 Indirect charges 42000

ados products
Cost

Total Average unit cost Concept Initial inventory Incurred from the
period

45800 29.39 Semi-product 2025799

45230 16.62 Labor 792000
45230 2.22 Indirect charges 90000
48.23 Total 2907799
Semi-product Labor
Indirect charges
Total

Concept
rocess

osto

Total Concept Volume

111686 Semi-product 42000

53680 Labor 42000
7181 Indirect charges 42000
172546 Total
 Process 2
Schedule 1
Determination of processed production, expressed
in equivalent units

Production
processed
of the
period
42000
42000
42000

Schedule 2
Calculation of unit costs
of processed production

Production
Concept Costs incurred processed for Unit Cost
the period

Semi-product 111686 42000 2.66

Labor 792000 42000 18.86
Indirect charges 90000 42000 2.14
Total 993686 23.66

Schedule 3
Calculation of average unit costs

Units equivalent to fully finished products

Initial Processed Average

Total inventory production for the Total
period unit cost

2025799 42000 42000 48.23

792000 42000 42000 18.86
90000 42000 42000 2.14
2907799 69.23

Schedule 4
Valuation of finished production
Cost

Productio
Unitary Total
n
finished
 42000 48.23 2025799
42000 18.86 792000
42000 2.14 90000
69.23 2907799

Schedule 5
Valuation of work-in-process inventory

Final inventory Cost

Percentage of Equivalent units

progress Unitary Total

100% 42000 48.23 2025799

100% 42000 18.86 792000
100% 42000 2.14 90000
69.23 2907799
 Finished Processed
Concept production production for
the period

Semi-product 42000 42000

Labor 42000 42000
Indirect charges 42000 42000
 SAR S.A.
Production cost report
April 20XX
Process 1

Units of production cost

Concept MPD MOD CI Total
BEGINNING INVENTORY
Volume (liters) 3200 3200 3200
Degree of progress (%) 100% 75% 75%
Equivalent units (liters) 3200 2400 2400
Total cost (pesos) 92480 38880 4560 135920
Unit cost (pesos) 28.90 16.20 1.90 47.00

PROCESSED PRODUCTION
Volume (liters) 42600 42600 42600
Equivalent units (liters) 42600 42830 42830
Costs incurred (pesos) 1253625 712800 96000 2062425
Unit cost (pesos) 29.43 16.64 2.24 48.31

GRAND TOTAL
Volume (liters) 45800 45800 45800
Equivalent units (liters) 45800 45230 45230
Total cost (pesos) 1346105 751680 100560 2198345
Unit cost (pesos) 29.39 16.62 2.22 48.23

FINISHED PRODUCTION
Volume (liters) 42000 42000 42000
Total cost (pesos) 1234419 698000 93379 2025799
Unit cost (pesos) 29.39 16.62 2.22 48.23

ENDING INVENTORY
Volume (liters) 3800 3800 3800
Degree of progress (%) 100% 85% 85%
Equivalent units (liters) 3800 3230 3230
Total cost (pesos) 111686 53680 7181 172546
Unit cost (pesos) 29.39 16.62 2.22 48.23

GRAND TOTAL
Volume (liters) 45800 45800 45800
Equivalent units (liters) 45800 45230 45230
Total cost (pesos) 1346105 751680 100560 2198345
Unit cost (pesos) 29.39 16.62 2.22 48.23
SAR S.A.
Production cost report
 Raw
Aprilmaterials
20XX Finished goods
Banks warehouse warehouse
Process 2
S) 2000000.00 1504800.00 S) 2000000.00 92480.00 S) 864080.00
Units of production cost
Concept PROCESSED MPD MOD CI Total42000.00
495200.00 1907520.00
PRODUCTION
906080.00
Volume (liters) 42000 42000 42000
Costs incurred (pesos) 2025799 792000 90000 2907798.61
Unit cost (pesos) 48.23 18.86 2.14 69.23

FINISHED PRODUCTION
Production in process
Volume (liters) 42000 42000 42000
Labor Indirect
Total cost (pesos) Process 2 2025799 792000 90000 2907798.61
expenses
Unit cost 2025798.61
(pesos) 42000 48.23830880.018.8638880.00 2.14 69.23
186000.0 96000.0
792000.0 792000.0 90000.0
90000.0 830880 830880 186000 186000
2907798.61 42000 0 0
2865798.61

Accounts payable Capital stock Production in process

Process 1
2000000.00 S) 3000000.00 S) S) 2025798.61
135920.00
1253625.00
712800.00
96000.00
2198345.00 2025798.61
172546.39

Several accounts
186000
186000 (S