Example of Process Cost Report
Let suppose that the beginning work in progress in a Company in the month of November was 1,000 units that were 100 percent complete in terms of materials and 75 percent complete like to conversion. Raw materials costs relating to beginning work in progress amounted to shs.3,000 and conversion was shs.1,000. 10,000 units were completed throughout the period and transferred to finished goods stock account. 2,000 units were now in process and were 100 percent complete in relation to materials and 50 percent complete in relation to conversion costs. Costs incurred throughout the period were raw materials shs.33,000, conversion shs.43,000;
Required
Employ both FIFO and weighted average methods, to find out cost per equivalent unit and value of ending inventory. Organize the process cost report.
Process Cost Report
For the month of December
For Weighted Average Method
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1st Step
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Physical Units
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Beginning W.I.P
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1,000
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Units started during the period
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11,000 (10,000 + 2,000 - 1,000)
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Units to account for:
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12,000
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2nd Step
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Equivalent Units
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Total Units
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Materials
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Conversion Costs
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Units completed during the period:
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10,000
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10,000
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10,000
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Ending W.I.P
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2,000
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2,000 =(100% x 2,000)
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1,000= (50% x 2,000)
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Units accounted for
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12,000
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12,000
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11,000
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3rd Step
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Cost Determination
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Total Units
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Material Cost
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Conversion Costs
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Beginning W.I.P Materials: Conversion
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3,000
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-
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-
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Current costs
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1,000
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-
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-
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Cost to account for:
|
76,000
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33,000
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43,000
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|
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80,000
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33,000
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43,000
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11,000
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10,250
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Shs.7
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Shs.3
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Shs.4
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4th Step:
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Cost Assignment:
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Units started and completed during the current period: 9,000 x 7:
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63,000
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Ending W.I.P = Materials: 2,000 x 3:
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6,000
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= Conversion: 1,000 x 4:
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4,000
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10,000
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Beginning W.I.P Materials
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3,000
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Conversion:
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1,000
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4,000
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Cost of work done to complete beginning W.I.P
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|
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* costs
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750 x 4
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3,000
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Costs Accounted for
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80,000
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