## Example of process cost report, Cost Accounting

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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

 1st Step Physical Units Beginning W.I.P 1,000 Units started during the period 11,000 (10,000 + 2,000 - 1,000) Units to account for: 12,000 2nd Step Equivalent Units Total Units Materials Conversion Costs Units completed during the period: 10,000 10,000 10,000 Ending W.I.P 2,000 2,000 =(100% x 2,000) 1,000= (50% x 2,000) Units accounted for 12,000 12,000 11,000 3rd Step Cost Determination Total Units Material Cost Conversion Costs Beginning W.I.P Materials: Conversion 3,000 - - Current costs 1,000 - - Cost to account for: 76,000 33,000 43,000 80,000 33,000 43,000 11,000 10,250 Shs.7 Shs.3 Shs.4 4th Step: Cost Assignment: Units started and completed during the current period: 9,000 x 7: 63,000 Ending W.I.P =  Materials:  2,000 x 3: 6,000 =  Conversion: 1,000 x 4: 4,000 10,000 Beginning W.I.P Materials 3,000 Conversion: 1,000 4,000 Cost of work done to complete beginning W.I.P * costs 750 x 4 3,000 Costs Accounted for 80,000

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