Professional Documents
Culture Documents
Cost build up from one department to another in relation to materials, labor and overhe
are added to the present deparment, and so on, thus the unist cost per product manufac
its completion
Method of accounting of Process cost maintains the method of accumulation of materials, labor, and overhead us
manufacturing cost a. Normal costing- where materials and lobor are directly on actual cost incured in the p
using a predetermined rate as applied manufactuing overhead, difference from the actu
b. Standard costing- where the 3 elements of cost uses the estimated cost
Cost of P331,000 for the manufacturing of textile product for a total unist of 13,000 has
where the materials needed are being prepared for weaving and rolled to pack.
Illustrative problem The cost are broken down as follows- Extraction department
Amount Qty/unt Stage of
compltn
Material 78,000
labor 96,000
Overhead 157,000
331,000 13,000
Transferred to Weaving dept 9500
Work in process end 3,500
Total equivalent production
from the above illustration the cost of production is prestented to with:- EXTRACTION
Quantity Schedule
Quantity to be accounted for:
Started in process/transferred in from previous
department
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process end
Total as accounted for
The cost are broken down as follows- weaving department- COST ADDED IN THIS DE
Amount Qty/unt Stage of
compltn
Material 22,000
labor 83,000
Overhead 70,000
175,000 9,500
Transferred to packaging 8500
Work in process end 1,000
total equivalent production
Quantity Schedule
Quantity to be accounted for:
transferred in from previous
department
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process end
Total as accounted for
The cost are broken down as follows- packaging department- COST ADDED IN THIS D
Amount Qty/unt Stage of
compltn
Material 2,500
labor 25,000
Overhead 15,000
42,500 8,500
Transferred to finished goods 5500
Work in process end 3,000
Total equivalent production
Quantity Schedule
Quantity to be accounted for:
transferred in from previous
department
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process end
Total as accounted for
The question of how the production report shall be accounted for should the work per d
completed in a month and it requires another month of process for the in process end?
2. Average unit cost is computed as follows: (at each level of cost element)
Cost of beg work in process at each level of element of cost (Mat/Labor/OH)
Cost at current month of at each level of cost element materials
Total
Divide by the total equivalent production (at each level of cost element)
= Average unit cost
3. The average cost computed shall be use by the completed units and work in process en
EXTRACTION DEPARTMENT
Illustrative problem Assume that the second month of in process the following information was given
1 Cost element of materials, labor and overhead as follows
Materials 75,000.00
Labor 90,000.00
Overhead 140,000.00
Total cost 305,000.00
Quantity Schedule
Quantity to be accounted for:
Work in process beginning
Started in process
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process end
Total as accounted for
WEAVING DEPARTMENT
The following data is presented for the the production of linen in the weaving departmen
COST LAST MONTH
Transferred in from prior department
Cost incurred this department from previous department
Materials
Labor
Overhead
Total cost last month
QTY
Work in process beginning
Transferred in- Current month
Transferred out next department
Work in process end
Stage of completion- 50%
Materias added at the beginning of the month at 50%
Materials added at the end of the month process at 25% when 20% complete
Materials balance at 25%
Quantity Schedule
Quantity to be accounted for:
Work in process beginning
Transferred in from prev dept
Total to be accounted for
Quantity as acconted
Transferred out to package dept
Work in process end
Total as accounted for
Prcoess cost
ts transferred to another department, and the work in process end, or ramining work in process
ompletion of the units still in process after the transferred out to another department
13,000.00
13,000.00
9,500.00
3,500.00
13,000.00
13,000.00 6.00
11,250.00 8.53
11,600.00 13.53
28.07
9,500.00 28.07
3,500.00 6.00
1,750.00 8.53
2,100.00 13.53
ST ADDED IN THIS DEPARTMENT
Unit % of % of % of Transfer
cost Materials compltn Labor compltn Overhead compltn In
2.39
9.12
7.78
19.29
8500 8500 8500
700 70% 600 60% 500 50% 1,000.00
9200 9100 9000 1000
9,500.00
9,500.00
8,500.00
1,000.00
9,500.00
9,200.00 2.39
9,100.00 9.12
9,000.00 7.78
47.36
8,500.00 47.36
1,000.00 28.07
700.00 2.39
600.00 9.12
500.00 7.78
8,500.00
8,500.00
5,500.00
3,000.00
8,500.00
5,500.00 0.45
7,300.00 3.42
7,000.00 2.14
53.38
5,500.00 53.38
3,000.00 47.36
- 0.45
1,800.00 3.42
1,500.00 2.14
t/Labor/OH) xx
xx
xx
/ xx
xx
UCITON PROCESS
Unit % of % of % of
cost Materials compltn Labor compltn Overhead compltn
6.00
8.53
13.53
28.07
9500 9500 9500
3500 100% 1750 50% 2100 60%
13000 11250 11600
10,000.00
6,500.00
16,500.00
16,500.00 5.82
14,875.00 7.05
14,875.00 11.32
24.20
10,000.00 24.20
6,500.00 5.82
4,875.00 7.05
4,875.00 11.32
28,067.82
1,673.91
5,472.53
3,888.89
39,103.15
241,950.39
26,000.00
65,000.00
80,000.00
412,950.39
452,053.54
1,000.00
10,000.00
9,800.00
1,200.00
20% complete
Qty/unt Unit % of % of % of
cost Materials compltn Labor compltn Overhead compltn
24.55
2.59
6.78
8.07
41.98
1,000
10,000
9800 9800 9800 9800
1,200 900 75% 600 50% 600 50%
10700 10400 10400
1,000.00
10,000.00
11,000.00
9,800.00
1,200.00
11,000.00
900 2.59
600 6.78
600 8.07
% of
Comptln
100%
% of
Comptln
100%
FIFO NOTES
Note 1
Under the FIFO method, the transferred out is broken down into
the work in process previous month at 3500
Started in and completed current month 6500
Total transferred out 10000
Note 2
The work in process shall be following the same completion as the average costing
SECOND MONTH PRODUCTION PROCESS (fifo
Cost this Work in
month process beg
Material 75,000.00
labor 90,000.00
Overhead 140,000.00
305,000.00 64,355.75
In process beginning
Transferred to Weaving dept
Work in process beg
Started in process this dept
Total transfer out
In process end
Total equivalent production
Quantity to be accounted for:
Work in process beginning
Started in process
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process beg prior dept
Started in process this dept
Work in process end
Cost
Cost to be accounted for
Work in process beg 64,355.75
Materials 75,000.00
Labor 90,000.00
Overhead 140,000.00
Total cost to be accounted for 369,355.75
Cost accounted for as follows:
Transferred out
Work in process beg 64,355.75
Started in process this dept -
Materials -
Labor 12,000.00
Overhead 15,342.47
Transferred out 153,304.31
Work in process end
Materials 37,500.00
Labor 33,428.57
Overhead 53,424.66
369,355.75
Trans in % of Cost this Work in
compltn month process beg
Transfer in prior dept 241,950.39
Material 26,000.00
labor 65,000.00
Overhead 80,000.00
412,950.39 39,103.15
In process beginning
Transferred in from prev department
9,800.00 Transferred to next department
1,200.00 100% Work in process beg
11,000.00 Started in process this dept
Total transfer out
In process end
Total equivalent production
-
Started in process this dept -
Materials 780.00
Labor 2,653.06
Overhead 4,040.40
Transferred out 365,274.80
Work in process end
Tansfer in cost prior dept 29,034.05
Materials 2,340.00
Labor 3,979.59
Overhead 4,848.48
452,053.53
281,900.00 51,900.00
In process beginning
Transferred to Weaving dept
Work in process beg-25% complete
Started in process this dept
Total transfer out
In process end-80%
Total equivalent production
Cost
Cost to be accounted for
Work in process beg 51,900.00
Material -chemicals 228,900.00
Material -cans 7,000.00
labor & overhead 46,000.00
Total cost to be accounted for 333,800.00
Cost accounted for as follows:
Transferred out
Work in process beg 51,900.00
Started in process this dept -
Material -chemicals -
Material -cans 1,400.00
labor & overhead 6,000.00
Transferred out 212,000.00
Work in process end
Material -chemicals 54,500.00
Material -cans -
labor & overhead 8,000.00
333,800.00
Quantity Schedule
Quantity to be accounted for:
Work in process beginning
Started in process
Total to be accounted for
Quantity as acconted
Transferred out to weaving
Work in process end
Total as accounted for
Cost schedule
Cost to be accounted for
Material -chemicals
Material -cans
labor & overhead
Total cost to be accounted for
3,500.00 - 0% 1,750.00
6,500.00 6,500.00 6,500.00
10,000.00
3,500.00
6,500.00 10,000.00
6,500.00
13,000.00 5.77
13,125.00 6.86
12,775.00 10.96
23.59
-
- 5.77
1,750.00 6.86
1,400.00 10.96
6,500.00 23.59
6,500.00 5.77
4,875.00 6.86
4,875.00 10.96
Qty/unt Unit % of
cost Materials compltn Labor
10,000.00 24.20
10,000.00 2.60
9,800.00 6.63
9,900.00 8.08
41.51
1,000.00
10,000.00
1,000.00
10,000.00
11,000.00
1,000.00
8,800.00 9,800.00
1,200.00
11,000.00
Units Unit cost
10,000.00 24.20
10,000.00 2.60
9,800.00 6.63
9,900.00 8.08
41.51
-
-
300.00 2.60
400.00 6.63
500.00 8.08
8,800.00 41.51
1,200.00 24.20
900.00 2.60
600.00 6.63
600.00 8.08
21,000.00 13.25
4,000.00
4,000.00
21,000.00
25,000.00
4,000.00
16,000.00 20,000.00
5,000.00
21,000.00 10.90
20,000.00 0.35
23,000.00 2.00
13.25
-
- 10.90
4,000.00 0.35
3,000.00 2.00
16,000.00 13.25
5,000.00 10.90
0.35
4,000.00 2.00
AVERAGE COSTING
Total Qty/unt Unit chemical % of can % of Labor
cost Materials compltn Materials compltn Overhead
274,000.00 10.96
7,000.00 0.35
52,800.00 2.20
333,800.00 21,000 13.51
4,000
20000 20000 20000 20000
5,000 5000 100% 0 4000
25000 20000 24000
4,000.00
21,000.00
25,000.00
20,000.00
5,000.00
25,000.00
333,800.00
rial, its 100%-100% completed = 0%, while for labor 50%-100%= 50%, Overhead 60%-100%= 40%
Variance
% of % of Transfer % of
compltn Overhead compltn in prior dpt compltn
75%
80%
% of
compltn
80%
COND MONTH PRODUCTION PROCESS (STANDARD COST)
Work in Qty/unt Unit Std % of % of
process beg cost Materials compltn Labor compltn
13,000.00 6.25
13,125.00 6.00
12,775.00 12.00
57,575.00 13,000.00 24.25
3,500.00
3,500.00
6,500.00 10,000.00
6,500.00
57,575.00
- -
- - 6.25
10,500.00 1,750.00 6.00
16,800.00 1,400.00 12.00
157,625.00 6,500.00 24.25
370,875.00
(8,300.00)
S
USER:
Spoilage can not be avoided as the normal process will incurr as such, for this,
spoilage has to be ascertain if occurred during the process or after the
process where quality inspection has been done
USER:
Acctng If normal as the process passes, no distribution at Materials, labor, &
overhead for equivalent production.
% of Assume using the same illustration, the ending process include abnormal spoilage
Overhead compltn and normal spoilage of 2,000 and 1,000 units respectively, compute the Equivalent
production and prepare cost of production report
In process end
Abnormal spoilage
Normal spoilage
Cost
Cost to be accounted for
Work in process beg 64,355.75
Materials 75,000.00
Labor 90,000.00
Overhead 140,000.00
Total cost to be accounted for 369,355.75
Cost accounted for as follows:
Transferred out
Work in process beg 64,355.75
Started in process this dept -
Materials -
Labor 12,233.01
Overhead 15,648.70
Transferred out 158,716.58
-
ss will incurr as such, for this,
during the process or after the
een done
Qty/unt Unit % of % of
cost Materials compltn Labor compltn
12,000.00 6.25
12,875.00 6.99
12,525.00 11.18
13,000.00 24.42
3,500.00
12,000.00 12,875.00
3,500.00
13,000.00
16,500.00
3,500.00
6,500.00 10,000.00
6,500.00
12,000.00 6.25
12,875.00 6.99
12,525.00 11.18
24.42
-
- 6.25
1,750.00 6.99
1,400.00 11.18
6,500.00 24.42
2,000.00 24.42
3,500.00 6.25
2,625.00 6.99
2,625.00 11.18
% of
Overhead compltn
1,400.00 40%
6,500.00
2,625.00 75%
2,000.00 100%
12,525.00