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

1^st 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
2^nd 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
3^rd 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
4^th 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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