Process Costing Assignment 2 - Long Problem with answers

PROCESS COSTING
Seatwork:
Name: ________________________________ Program/Yr/Blk: __________ Date: _________________
The department production report of Isla Company for August 2022 is summarized below:
Assembly Finishing
Quantity Department Department
Started in Production - Current month 2,000 -0-
Transferred in from Prior Department -0- 1,860
Transferred out to next department 1,860 -0-
Transferred out to Finished Goods -0- 1,800
State of Completion of Ending WIP

Materials Complete 40%
Labor 75% 10%
Overhead 75% 40%
Costs allocated to the departments are presented below:
Materials Labor Overhead

Assembly Department 30,000.00 29,670.00 18,830.00
Finishing Department 68,000.00 13,671.00 7,825.00
Required:
1. Compute equivalent units of production.
2. Prepare a cost of production report for each department.
(Hint: Use all decimal places when computing but write up to two decimal places only)
3. Prepare journal entries to record the allocation of costs to production.
4. Prepare journal entries to record the transfer of goods from the Assembly Department to the
Finishing Department.
5. Prepare journal entries to record the completion of goods and the transfer to finished goods.
ANSWERS:
Assembly Department
Started in Production - Current month 2,000

Less: Transferred out to next department 1,860
Work in Process, end 140
Assembly Department
Equivalent Production Computations
Month of August 2022
Materials
Transferred Out to Next Department 1,860
Work in Process – End (140 x 100%) 140
Equivalent Units for Materials 2,000
Labor
Equivalent Units for Labor 1,965
Overhead
Equivalent Units for Overhead 1,965
Assembly Department
Cost of Production Report
Quantity Schedule Units
(a) Quantity to be Accounted For:
Started in Process 2,000
Total to be Accounted for 2,000
(b) Quantity Accounted For:
Transferred Out to Next Dept. 1,860
Work in Process – end 140
Total Accounted for 2,000
Cost Schedule Total Cost Equivalent Unit Costs

Units
(c) Costs to be Accounted For:
Costs Transferred in P-0- ÷ 0 = P-0-
Costs Incurred in this Department
Materials P 30,000.00 ÷ 2,000 = 15.00
Labor 29,670.00 ÷ 1,965 = 15.10
Overhead 18,830.00 ÷ 1,965 = 9.58
Total Costs in this Department P 78,500.00 P39.68
Total Costs to be Accounted For P 78,500.00 P39.68
(d) Cost Accounted For:
Transferred Out P 73,808.40 = 1,860 x P 39.68
Work in Process – end
Costs Transferred in P–0- = 0 x 0.00
Materials 2,100.00 = 140 x 15.00
Labor 1,585.42 = 105 x 15.10
Overhead 1,006.18 = 105 x 9.58
Total Work in Process P 4,691.60
Total Costs Accounted For P78,500.00
Finishing Department
Transferred in From Prior Department 1,860

Less: Transferred out to finished goods 1,800
Work in Process, end 60
Equivalent Production Computations
Materials
Equivalent Units for Materials 1,824
Labor
Equivalent Units for Labor 1,806
Overhead
Equivalent Units for Overhead 1,824
Cost of Production Report
Quantity Schedule Units
(a) Quantity to be Accounted For:
Transferred In 1,860
Total to be Accounted for 1,860
(b) Quantity Accounted For:
Transferred Out to Finished Goods 1,800
Work in Process – end 60
Total Accounted for 1,860
Cost Schedule Total Cost Equivalent Unit Costs

Units
(c) Costs to be Accounted For:
Costs Transferred in P 73,808.40 ÷ 1,860 = P 39.69
Materials P 68,000.00 ÷ 1,824 = 37.28
Labor 13,671.00 ÷ 1,806 = 7.57
Overhead 7,825.00 ÷ 1,824 = 4.29
Total Costs in this Department P 89,496.00 P 49.14
Total Costs to be Accounted For P163,304,40 P88.82
(d) Cost Accounted For:
Transferred Out to Finished Goods P159,880.36 = 1,800 x P 88.82
Work in Process – end
Costs Transferred in P 2,380.92 = 60 x 39.69
Materials 894.74 = 24 x 37.28
Labor 45.42 = 6 x 7.57
Overhead 102.96 = 24 x 4.29
Total Work in Process P 3,424.04
Total Costs Accounted For P163,304.40
JOURNAL ENTRIES:
Work in Process – Assembly Department 78,500.00
Materials 30,000.00
Factory Payroll 29,670.00
Applied Manufacturing Overhead 18,830.00
To record costs added this month.
Work in Process – Finishing Department 73,808.40

Work in Process – Assembly Department 73,808.40
To record units transferred to Finishing Department.

Materials 68,000.00
Factory Payroll 13,671.00
Applied Manufacturing Overhead 7,825.00
To record costs added this month.
Finished Goods 73,808.40

To record units transferred to finished goods

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PROCESS COSTING

Name: ______________ Program/Yr/Blk: Date: _

State of Completion of Ending WIP

Costs allocated to the departments are presented below:

Materials Labor Overhead

Started in Production - Current month 2,000

Cost Schedule Total Cost Equivalent Unit Costs

Transferred in From Prior Department 1,860

Cost Schedule Total Cost Equivalent Unit Costs

Work in Process – Finishing Department 73,808.40

Work in Process – Finishing Department 89,496.00

Finished Goods 73,808.40

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