Exercise 7-3 INCREASE IN QUANTITY - FIFOExercise 7-5 NORMAL LOSS - FIFO SUCCEEDING DEP'TChemrez Company produces a chemical preservative in two departments,Refining and Blending. The addition of chemical to the liquid base in thesecond department increases the total quantity of the product. Materials areadded at the beginning of the process in the Blending department. At theend of March, there were 2,000 units in process, 20% complete as to laborand 40% complete as to overhead. During April, 5,000 units were receivedfrom the preceding department. After adding materials in this department,the quantity of units in process doubled. At the end of the month, there were1,500 units still in process, 60% complete as to labor and 80% complete asto overhead. Cost data related to April operations follow:The following data pertain to the production of the second department ofSumi Manufacturing Corporation for the month of March:WIP, begReceived from department AWIP, endLost units: 2,000 unitsCost data:WIP, begCost this Dep'tMaterialsDirect labor5,000 units ; ½ done20,000 units @ P16,000 units; 2/3 doneP 14,10039,90023,94015,960BeginningInventoryAdded thisFactory OverheadperiodFactory costs are evenly applied and all lost units were considered normal.P 2,460P 12,5002,5003,3007,630Costs from preceding departmentMaterials500REQUIRED: Prepare the cost of production report of Department B for themonth of March assuming the following independent cases:[a] Loss occurred at the start of process;[b] Loss occurred during process;[c] Loss occurred at the end of process.Direct labor150Factory overhead600REQUIRED: Using the FIFO cost flow, prepare a cost of production report forthe Blending Department for April.Exercise 7-6 NORMAL LOSS - AVERAGE SUCCEEDINGDEP'TThe Lanmi Company uses a process cost system. On May 1, the companyhad 500 units in production in the Mixing Department. Alladded to these units, but processing was only one half complete. Costapplicable to the beginning inventory are:Cost from prior department, P130,620;Materials, P109,200;Labor, P114,450%;Overhead, P120,600During the month, an additional 14,300 units were transferred into the MixingDepartment with prior department costs of P2,257,212. Additional costsincurred in the Mixing department are:Materials, P1,441,140;Labor, P1,684,200;Overhead, P2,222,400.A total of P13,600 units were transferred out to finished goods. The endingwork in process inventory consisted of 900 units to which all materials hadbeen added, but on which only 75% of the processing had been completed.The other units were lost as normal spoilage at the end of the process.Exercise 7-4 INCREASE IN QUANTITY - AVERAGECola Company produces a soft drink in three departments, Syrup,Carbonation, and Bottling. Syrup, which gives the drink its flavor, is producedin the first department. The syrup is then transferred to the seconddepartment, where carbonated water is added to give the drink its fizz. Aftercarbonated water has been added, the liquid drink is bottled. The companyuses average costing to account for work in process inventories. Data relatedto operations in the Carbonation Department during October are:aterihad beenQuantity data :WIP, beg (75% done)Received from Syrup Dept. 2,000 WIP, end (25% done)Increase in units this dept.1.000 Transferred to next dept.7,8001,2006,000Cost data :Costs from preceding dept.MaterialsWIP, begP1,120Added this month14065120P 9,6801,2101,9603,120Direct laborFactory overheadREQUIRED: Prepare a cost of production report for the CarbonationDepartment.REQUIRED: Prepare the cost of production report of the Mixing Departmentfor the month of May.

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Exercise 7-3 INCREASE IN QUANTITY – FIFO Chemrez Company produces a chemical preservative in two departments, Refining and Blending. The addition of chemical to the liquid base in the second department increases the total quantity of the product. Materials are added at the beginning of the process in the Blending department. At the end of March, there were 2,000 units in process, 20% complete as to labor and 40% complete as to overhead. During April, 5,000 units were received from the preceding department. After adding materials in this department, the quantity of units in process doubled. At the end of the month, there were 1,500 units still in process, 60% complete as to labor and 80% complete as to overhead. Cost data related to April operations follow: Beginning Inventory Added this period P 2,460 500 150 600 P 12,500 2,500 3,300 7,630 Costs from preceding department Materials Direct labor Factory overhead REQUIRED: Using the FIFO cost flow, prepare a cost of production report for the Blending Department for April.

Exercise 7-3 INCREASE IN QUANTITY – FIFO Chemrez Company produces a chemical preservative in two departments, Refining and Blending. The addition of chemical to the liquid base in the second department increases the total quantity of the product. Materials are added at the beginning of the process in the Blending department. At the end of March, there were 2,000 units in process, 20% complete as to labor and 40% complete as to overhead. During April, 5,000 units were received from the preceding department. After adding materials in this department, the quantity of units in process doubled. At the end of the month, there were 1,500 units still in process, 60% complete as to labor and 80% complete as to overhead. Cost data related to April operations follow: Beginning Inventory Added this period P 2,460 500 150 600 P 12,500 2,500 3,300 7,630 Costs from preceding department Materials Direct labor Factory overhead REQUIRED: Using the FIFO cost flow, prepare a cost of production report for the Blending Department for April.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Process Cost Systems

Section: Chapter Questions

Problem 18.4CP

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