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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
Ending W.I.P
2,000
2,000 =(100% x 2,000)
1,000= (50% x 2,000)
Units accounted for
11,000
3rd Step
Cost Determination
Material Cost
Beginning W.I.P Materials: Conversion
3,000
-
Current costs
Cost to account for:
76,000
33,000
43,000
80,000
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
Beginning W.I.P Materials
Conversion:
Cost of work done to complete beginning W.I.P
* costs
750 x 4
Costs Accounted for
mark-up of 25%
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