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    Abnormal and Normal Losses

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    Christian Clyde Zacal Ching
    This document contains two exercises regarding process costing and abnormal losses. Exercise 1 provides data on a department's production including beginning work-in-process, inputs, ending work-in-process, and abnormal losses. It asks to calculate cost of production reports under different assumptions about when the loss occurred. Exercise 2 provides similar data for a different department and asks to calculate cost of production reports under different assumptions about when the abnormal loss occurred.

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    Abnormal and Normal Losses

    Uploaded by

    Christian Clyde Zacal Ching
    404 views1 page
    This document contains two exercises regarding process costing and abnormal losses. Exercise 1 provides data on a department's production including beginning work-in-process, inputs, ending work-in-process, and abnormal losses. It asks to calculate cost of production reports under different assumptions about when the loss occurred. Exercise 2 provides similar data for a different department and asks to calculate cost of production reports under different assumptions about when the abnormal loss occurred.

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    This document contains two exercises regarding process costing and abnormal losses. Exercise 1 provides data on a department's production including beginning work-in-process, inputs, ending work-in-process, and abnormal losses. It asks to calculate cost of production reports under different assumptions about when the loss occurred. Exercise 2 provides similar data for a different department and asks to calculate cost of production reports under different assumptions about when the abnormal loss occurred.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    404 views1 page

    Abnormal and Normal Losses

    Uploaded by

    Christian Clyde Zacal Ching
    This document contains two exercises regarding process costing and abnormal losses. Exercise 1 provides data on a department's production including beginning work-in-process, inputs, ending work-in-process, and abnormal losses. It asks to calculate cost of production reports under different assumptions about when the loss occurred. Exercise 2 provides similar data for a different department and asks to calculate cost of production reports under different assumptions about when the abnormal loss occurred.

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    © All Rights Reserved
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    3,College of Business Education

    ACCTG 105 – COST ACCOUNTING & CONTROL II


    PROCESS COSTING: FIFO METHOD – LOSSES IN UNITS

    ABNORMAL LOSS ( UNEVEN)

    Input of
    50% at the start 20% at the 60% 30% at the end materials

    Completion
    of units

    0% 60% 100%

    WIP, Beginning- In the point of view of In process Beginning, if it’s 60% done, it means that 70% (50%+20%) of materials were
    added last month and only the remaining 30% will be added this month. Note: If the there is input of materials exactly on the work
    done this month, (in the example, the units are 60% done and 20% materials are added at 60%)it was already added last month.
    Therefore, exclude it for the work done this month.

    WIP, Ending- In the point of view of In process end, if it’s 60% done, it means that 70% (50%+20%) is completed this month
    The remaining 30% will be completed next month as the next WIP, beginning. Since there is input on the exactly on the work done
    this month, the 20% is included for the work done this month. Therefore, include it for the work done this month.
    Legend:

    Work Done this Month

    Incomplete

    EXERCISE 1 (COST OF PRODUCTION REPORT- SUBSEQUENT DEPT. – UNEVEN APPLICATION OF COSTS)


    Mupasar Kaha Ko Mfg. Has its product processed in two consecutive departments, A and B. The following data are given on the
    January, 20D production of Dept. B:

    Quanitity Data:
    In Process, beg. ----------------------------------2,000 units 1/4 done
    Received from Department A ----------------- 20,000 units
    In process, end ---------------------------------- 3,200 units 1/4 done
    Abnormal Loss -----------------------------------1,000 units

    Cost Data:
    In process, beg ----------------------------------P6,322
    Received from Dept. A -------------------------P20,000
    Factory Costs:
    Materials -----------------------------------52,000
    Labor ---------------------------------------10.980
    Factory Overhead ------------------------7,320

    Materials are added at the start while conversion costs are applied evenly throughout the process.

    Required: Assuming the loss in units is abnormal, prepare cost of production report under each of the following assumptions:
    1. The loss occurred at the start of the process
    2. The loss occurred during the process
    3. The loss occurred at the end of the process
    4. The loss occurred when the goods were 1/5 done

    EXERCISE 2 (ABNORMAL LOSS – FIRST DEPARTMENT)


    The following data pertain to the July, 2018 production of Department I in a manufacturing company:
    Quantity Data: Cost Data:
    In Process, July 1 12,000 units, 2/3 done In Process, Beg P 113,360
    Placed in Process 180,000 units Factory Costs:
    In Process, July 31 16,000 units, 1/8 done Materials P 637,500
    Abnormal Loss 20,000 units Labor P 382,500
    Factory Overhead Rate 2/3 of Labor Cost
    Materials are added 20% at the start, 30% at the middle and the remainder at the end. Conversion cost are evenly applied.

    Required: Assuming the loss in units is abnormal, prepare cost of production report under each of the following assumptions:
    5. The loss occurred at the start of the process
    6. The loss occurred during the process
    7. The loss occurred at the end of the process
    8. The loss occurred when the goods were 1/2 done

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