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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