PROCESS COSTING FIFO METHOD: INCREASE AND LOSS IN UNITS 1

NAME: ______________________________ SECTION: __________________________

SCORE: _________________

Direction: Analyze the following problems. Write the letter of your answer on the space provided
before the number. Provide the necessary solutions for each item. SOLUTION FOR
EACH ITEM IS REQUIRED.
Dex Co. had the following production for the month of June:
Units
Work in process at June 1 10,000
Started during June 40,000
Completed and transferred to finished goods during June 33,000
Abnormal spoilage incurred 2,000
Work in process at June 30 15,000
Materials are added at the beginning of the process. As to conversion cost, the beginning work in
process was 70% completed and the ending work in process was 60% completed. Spoilage is
detected at the end of the process.
1. Under FIFO method, the equivalent units for June, with respect to conversion costs,
a. 44,000 b. 35,000 c. 42,000 d. 37,000
e.
f. SOLUTION:
g.
h.
i.
j.
k.
l.
m. Answer the following questions using the information below:
n. Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and
then prepares the frozen fish fillets for distribution to its retail sales department.
Direct materials are added at the beginning of the cycle. Conversion costs are
incurred evenly throughout the production cycle. Before inspection, some fillets
are spoiled due to nondetectible defects. Inspection occurs when units are 50%
converted. Spoiled fillets generally constitute 3.5% of the good fillets. Data for
April 2012 are as follows:
o.

p. WIP, beginning inventory 4/1/2012 80,000 fillets

q. Direct materials (100% complete)
r.
s.
Conversion costs (50% complete)
t. Started during April 150,000 fillets
u.

v. Completed and transferred out 4/31/2012 200,000 fillets

w.

x. WIP, ending inventory 4/31/2012 16,000 fillets

y. Direct materials (100% complete)
z. Conversion costs (20% complete)
aa.

ab. Costs for April:

ac.WIP, beginning Inventory:
ad. Direct materials $ 110,000
ae.Conversion costs 80,000
af.

ag. Direct materials added 290,200

ah. Conversion costs added 376,130
ai.

2. What is the number of total spoiled units?

a. 16,000 b. 10,000 c. 50,000 d. 14,000
units
a.
units units units
3. Normal spoilage totals:
a. 7,000 units c. 16,000 d. 14,000
SOLUTION FOR NUMBERS 2-4:
b. 0 units units units
4. Abnormal spoilage totals:
a. 7,000 units c. 16,000 d. 14,000
b. 0 units
a.
units units

b.
c.
d.
e.
 PROCESS COSTING FIFO METHOD: INCREASE AND LOSS IN UNITS 2
f.
g.
h.
i.
j.
k.
l.
m.
n. For numbers 5 to 10.
o.

p. The following information is available for Jones Company for April:

q.

r. Started this month s. t.

8 Un

u. Beginning WIP v. w.

x. (40% complete) y. z.
7, U

aa.Normal spoilage ab. ac.

1, Un

ad.Abnormal spoilage ae. af.

9 Un

ag.Ending WIP ah. ai.

aj. (70% complete) ak. al.

1 U

am. Transferred out an. ao.

7 Un

ap.Beginning Work in Process aq. ar.

Costs:
as. Material at. au.
P

av. Conversion aw. ax.

1

ay. Current Costs: az. ba.

bb.Material bc. bd.

P

be.Conversion bf. bg.

3
bh.

bi. All materials are added at the start

SOLUTION FORofNUMBERS
production5 and the inspection point is at the end
TO 10:
bj.
of the process.
5. Refer to Jones Company. What are equivalent units of production for material using FIFO?
a. 80,000
e.
b. 79,100 c. 78,900 d. 87,500
6. Refer to Jones Company. What are equivalent units of production for conversion costs using
FIFO?
a. 79,700 b. 79,500 c. 81,100 d. 80,600
7. Refer to Jones Company. What is cost per equivalent unit for material using FIFO?
a. P 1.63 b. P 1.37 c. P 1.50 d. P 1.56
8. Refer to Jones Company. What is cost per equivalent unit for conversion costs using FIFO?
a. P 4.00 b. P 4.19 c. P 4.34 d. P 4.38
9. Refer to Jones Company. What is the cost assigned to ending inventory using FIFO?
a. P 75,920 b. P 58,994 c. P 56,420 d. P 53,144
10.Refer to Jones Company. What is the cost assigned to abnormal spoilage using FIFO?
a. P 1,350 b. P 3,906 c. P 5,256 d. P 6,424
e.
f.
g.
PROCESS COSTING FIFO METHOD: INCREASE AND LOSS IN UNITS 3
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.
aa.
ab. For numbers 11 and 12
ac.

ad.Bowman Company has the following information for July:

ae.

af. Units started ag. 1 ah.

0 u
0
,
0
0
0
ai. Beginning Work in Process: aj. 2 ak.
(35% complete) 0 u
,
0
0
0
al. Normal spoilage am. an.
3,5 u
0
0
ao. Abnormal spoilage ap. 5 aq.
, u
0
0
0
ar. Ending Work in Process: as. 1 at.
(70% complete) 4 u
,
5
0
0
au.Transferred out av. 9 aw.
7 u
,
0
0
0
ax. Beginning Work in Process ay. az.
Costs:
ba.Material bb. P bc.

1
5
,
0
0
0
bd.Conversion be. 1 bf.
0
,
0
0
 PROCESS COSTING FIFO METHOD: INCREASE AND LOSS IN UNITS 4
0
bg.

All materials are added at the start of the production process. Bowman Company
bh.

inspects goods at 75 percent completion as to conversion.

11.Refer to Bowman Company. What are equivalent units of production for material, assuming
FIFO?
bi. bj. 100,000
bk. bl. 96,500
bm. bn.95,000

bo. bq.
bp.120,000
br.
12.Refer to Bowman Company. What are equivalent units of production for conversion costs,
assuming FIFO?
a. 108,900 b. 103,900 c. 108,650 d. 106,525
e.
f. SOLUTION FOR NUMBERS 11 AND 12:
g.
h.
i.
j.
k.
l.
m.
n. Use the following data in answering Numbers 13 to 15.
o. The Cooking Department of Red Crab, Inc., uses a process costing system. Direct
materials are added at the beginning of the cooking process. Conversion costs are
added evenly during the cooking process. Consider the following data for the Cooking
Department for January:
p.
q. r. P s. Dir t. Conversio
h ect n costs
y mat
s eria
i ls
c
a
l
u
n
i
t
s
u. Work in process, January 1: w. 1
v. 25% conversion costs 0 x. P
, 220
y. P 30,000
0 ,00
0 0
0
z. Started in January aa.7
4
,
ab. ac.
0
0
0
ad.Good units completed and ae.6
transferred out during 1
January ,
af. ag.
0
0
0
ah.Spoiled units ai. 8 aj. ak.
,
 PROCESS COSTING FIFO METHOD: INCREASE AND LOSS IN UNITS 5
0
0
0
al. Work in process, January 31 am.
15,0
an. ao.
0
0
ap.Costs added during January ar. P
1,4
aq. as. P 942,000
80,
000
at. Cost per equivalent unit of av. P
au. aw. P 12
work done in January 20
ax.
ay. Red Crab uses the FIFO method of process costing. Inspection occurs when production
is 100% complete, normal spoilage is 11% of goods units completed during the period.
13.What is the total cost of the units completed and transferred out?
a. P 1,632,000 b. P 1,972,000 c. P 2,186,720 d. P 2,228,000
14.What is the total cost of the units in ending work in process?
a. P b. P c. P d. P300,000
444,000 685,280 658,720
15.What is the cost of abnormal spoilage?
a. P b. P c. P d. P
256,000 214,720 41,280 41,000
e.
f. SOLUTION FOR NUMBERS 13 TO 15:
g.

h.