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Process Costing

1. The assembly department at Keraniganj Company produced 160,000 units in March using weighted average process costing. Costs were added for direct materials, direct labor, and overhead. There were 21,600 units still in process at month end that were 70% complete. One quarter of units were lost to normal spoilage during production inspection at 90% completion. 2. For the finishing department at Kalatia Company in June, total costs of $2,164,500 were assigned to units completed and transferred out, abnormal spoilage, and units in ending work in process using weighted average process costing. Spoilage was 10% of good units passing inspection at 80% completion. 3. Ker

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20 views

Process Costing

1. The assembly department at Keraniganj Company produced 160,000 units in March using weighted average process costing. Costs were added for direct materials, direct labor, and overhead. There were 21,600 units still in process at month end that were 70% complete. One quarter of units were lost to normal spoilage during production inspection at 90% completion. 2. For the finishing department at Kalatia Company in June, total costs of $2,164,500 were assigned to units completed and transferred out, abnormal spoilage, and units in ending work in process using weighted average process costing. Spoilage was 10% of good units passing inspection at 80% completion. 3. Ker

Uploaded by

jannatuldu03
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Keraniganj Company produces a product that passes through an assembly process and a
finishing process. All manufacturing costs are added uniformly for both processes. The
following information was obtained for the assembly department for March:
i. WIP, March 1, had 48,000 units (60 percent complete) and the following costs:
Direct materials Tk. 184,320
Direct labor 80,480
Overhead applied 34,400
ii. During March, 140,000 units started in the process in the assembly department, and
160,000 units were completed and transferred to the finishing department, and the
following costs were added to production:
Direct materials Tk. 267,880
Direct labor 281,280
Overhead applied 236,920
iii. On March 31, there were 21,600 partially completed units in process. These units
were 70 percent complete.
iv. Of the remaining units 1/4th were lost due to normal production conditions. Inspection
is made at the 90% stage of the process in the assembly process.
Required:
Prepare a production report for the assembly department for March using the weighted
average method of costing. The report should disclose the physical flow of units,
equivalent units, and unit costs and should track the disposition of manufacturing costs.
2. The Kalatia Company is a furniture manufacturer with two departments: molding and
finishing. The company uses the weighted-average method of process costing. In June
2018, the following data were recorded for the finishing department:
Units of beginning work in process inventory 12,500
Percentage completion of beginning work in process units 25%
Units started 87,500
Units completed 62,500
Units in ending inventory 25,000
Percentage completion of ending work in process units 95%
Spoiled units 12,500
Total costs added during current period:
Direct materials Tk. 700,000
Direct manufacturing labor Tk. 794,500
Manufacturing overhead Tk. 770,000
Work in process, beginning:
Transferred-in costs Tk. 103,625
Direct materials Tk. 119,000
Conversion costs Tk. 52,500
Cost of units transferred in during current period Tk. 809,375
Direct material costs are added at the beginning of the process. Conversion costs are
added evenly during the process. The inspection point is at the 80% stage of production.
Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed
of at zero net disposal value.
Required:
For June, summarize total costs to account for and assign these costs to units completed
and transferred out, to abnormal spoilage, and to units in ending work in process.
3. Keraniganj Pharmaceuticals of Dhaka produces a unique syrup using cane sugar and local
herbs. The syrup is sold in small bottles and is praised as a flavoring for drinks and for
use in desserts. The bottles are sold for Tk. 25 each. The first stage in the production
process is carried out in the Mixing Department, which removes foreign matter from the
raw materials and mixes them in the proper proportions in large vats. The company uses
the weighted average method in its process costing system. Materials in the department
need to be introduced in several stages, 30% of the total materials are introduced when
production has been started, 50% of the total materials are introduced when production
has been completed by 50% and the rest 20% of the total materials should be introduced
at 90% process level. Labor will be paid when work has been done by 30% and overhead
costs are incurred uniformly throughout the process. The company uses weighted average
method of costing.
The following activity was recorded in the Mixing Department during July:
Units DM DL MOH
Work in process 7/1/22 (25% 20,000 Tk. 12,500 - Tk. 15,500
completed)
Units started in production 110,000 - - -
Costs for July Tk. 250,000 Tk. 247,000 Tk.344,500
Work in process 7/31/22 (60% 25,000 - - -
completed)
Required:
Prepare a production report for the Mixing Department for the month.

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