QUESTION ONE

Pamoja Company uses the weighted-average method in its process costing system. It has two departments that process items: Department A and Department B. In Department A at the beginning of May direct materials were 80% complete and conversion costs were 40% complete with respect to the 5,000 units in work in process on May 1.

On May 31st direct materials are 70% completed and conversion costs are 60% completed with respect to the 8,000 units in work in process. During May, 12,000 units were completed and transferred to the Department B. An analysis of the costs relating to work in process on May 1 and to production activity for May follows:

Materials Conversion
Work in Process (Beginning) shs 12,480 shs 8,820
Cost Added During May shs 72,000 shs 49,140

Required
Prepare a production cost worksheet with supporting schedules using weighted-average method of process costing. How much is the cost of units in ending work in process and the cost of units transferred to Department B in May?


  • Updated: 18 Jul 20
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  • Attempts: 1250
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  • Correct: 746

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Cost per Unit:
QUESTION TWO

Songambele is a manufacturer of washing dish from Songea. It has two departments that process items, Cutting and Assembly. The information for Cutting Department for March is as follows:

Beginning work-in-process …….. 5,000 units
Units started …………………… 16,000 units
Units completed ………………… 18,000 units
Cost of beginning work-in-process
Direct materials …………….…... shs 4,840
Conversion ………………….…. shs 2,700
Costs added during month:
Direct materials …………….… shs 20,000
Conversion …………………… shs 27,000

Degree of Completion:
Beginning work-in-process is 80% as to direct materials and 50% as to conversion costs. Ending work-in-process is 90% as to direct materials and 60% as to conversion costs.

Required
Prepare a production cost worksheet using the weighted average method.


  • Updated: 18 Jul 20
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  • Attempts: 1074
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  • Correct: 535

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Cost per Unit:
QUESTION THREE

Waridi Furnitures Co. Ltd produces chairs. It has two departments that process products: cutting and assembly. Direct materials are all added in cutting department; and none in assembly department. During June 2020, beginning work-in process in the assembly department was 60 percent complete as to conversion. In the Assembly Department beginning inventories included shs 7,000 for transferred-in costs and shs 10,000 for conversion costs. Ending inventory was 30 percent complete. Additional information about the two departments follows:

Cutting Assembly
Beginning work-in-process units 5,000 4,000
Units started this period 14,000 ?
Units transferred this period 16,000 18,000
Ending work-in-process units 2,000
Material costs added shs 18,000
Conversion costs shs 32,000 shs 19,440
Transferred-out cost shs 50,000 ?

Required:
Prepare a production cost worksheet using first in first out (FIFO) costing for the assembly department.


  • Updated: 18 Jul 20
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  • Attempts: 942
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  • Correct: 353

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Cost per Unit:
QUESTION FOUR

The General Factory produces boots. It has two departments that process all the items. During March, the beginning work-in-process in the tanning department was 60 percent complete as to conversion and 100 percent complete as to direct materials. The beginning inventory included shs 6,400 for conversion costs and shs 13,300 for materials. Ending work-in-process inventory in the tanning department was 40 percent complete as to conversion and 100 percent complete as to direct materials.
Beginning work-in-process in the finishing department was 40 percent complete as to conversion and 40 percent complete as to direct materials. Beginning inventories included shs 8,100 for transferred-in costs shs 3,000 for direct materials and shs 6,000 for conversion costs. Ending inventory was 25 percent complete as to conversion and 50 percent complete as to direct materials.


Additional information about the two departments follows:

Tanning Finishing
Beginning work-in-process units 4,000 3,000
Units started this period 13,000 ?
Units transferred out in this period 12,000 13,000
Ending work-in-process units ? 2,000
Material costs added shs 37,700 shs 11,000
Conversion costs shs 17,400 shs 27,750
Transferred-out cost ? ?

Required:

Prepare a production cost worksheet using first in first out costing for the tanning department


  • Updated: 18 Jul 20
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  • Attempts: 550
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  • Correct: 414

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Cost per Unit:
QUESTION FIVE

Summer Company produces bikes. It has two departments that process items: Assembly and Testing. The Information for Assembly Department for September includes:

Beginning work-in-process inventory 1,600 units
Units started 2,000 units
Units transferred to Testing 3,200 units
Conversion costs shs 216,000
Cost of direct materials shs 132,000
Beginning work-in-process cost
Materials shs 104,000
Conversion shs 32,080

Beginning work-in-process is completed 70% as to direct materials and 50% as to conversion costs. Ending work-in-process is completed 80% as to direct materials and 60% as to conversion costs.
Required:
Prepare a production cost worksheet with supporting schedules using the first in first out method (FIFO) of process costing


  • Updated: 18 Jul 20
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  • Attempts: 852
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  • Correct: 167

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Cost per Unit:
QUESTION SIX

A company manufactures two products, Product A manufactured in Process Y and Product B manufactured in Process Z. The following information is available for a period:

Process Y Process Z
Opening work-in-progress Nil Nil
Raw materials input shs 162,180 (18,000 kg) shs 210,090
Conversion costs shs 94,050 shs 287,760
Waste material 1,000 kg (Note 1) Nil
Sales value of waste material shs 1.60 per kg Nil
Output of finished product 17,000 kg 12,600 units
Closing work-in-progress Nil 1,500 units (Note 2)

Note 1:
In Process Y the normal amount of waste material is 5% of the weight of raw materials input.
Note 2:
In Process Z the closing work-in-progress is 100% complete as to raw materials and 60% complete as to conversion costs.
Required:

  1. For Process Y, calculate the:
    1. Cost per kg of the expected production of Product A; and
    2. Total cost of the finished output of Product A.
  2. For Process Z, calculate the equivalent units of production of Product B in respect of conversion costs.

  • Updated: 18 Jul 20
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  • Attempts: 905
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  • Correct: 159

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Product A cost per Kg:
QUESTION SEVEN

  1. Give an example of a business where process costing may be applied and describe the features of this type of business which make the costing method appropriate.
  2. A company manufactures a product by means of two successive processes, Process 1 and Process 2. The following relates to the period just ended:

    Process 2

    Units Cost (shs)
    Opening work-in-progress Nil Nil
    Transfer from Process 1 2,160 22,032
    Material added 5,295
    Conversion costs 8,136
    Transfer to finished goods warehouse 11,950
    Closing work-in-progress 210

    The work-in-progress at the end of the period was 80% complete with respect to material added and 40% complete with respect to conversion costs in Process 2.
    Required:
    Calculate for the period the:

    1. Production cost per equivalent unit of the product
    2. Value of the transfer to the finished goods warehouse
    3. Value of the closing work-in-progress in Process 2.

  • Updated: 18 Jul 20
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  • Attempts: 594
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  • Correct: 128

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Do not round-off the earlier calculated formula-input data.
Cost per Unit:
QUESTION EIGHT

600 tonnes of raw material, costing shs 430,032 were input to a process in a period. Conversion costs totalled shs 119,328. Losses, in the form of reject product, are normally 12% of input. Reject product is sold for shs 260.00 per tonne. 521 tonnes of finished product passed inspection in the period. The remaining output was sold as reject product. There was no work-in-progress either at the beginning or the end of the period.
Required:
For the period:

  1. Calculate the cost per unit of normal output
  2. Prepare the process account, including any abnormal losses/gains

  • Updated: 18 Jul 20
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  • Attempts: 481
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  • Correct: 242

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Cost per Unit:
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