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The production data for Department I for August 2015 are as follows:
WIP, August 1 (1/4 done as to conversion costs)
100,000 units
Started in August
740,000 units
Transferred Out during August
610,000 units
Spoiled Units
80,000 units
Costs of Beginning Work in Process:
Materials
P1,250,000
Conversion
P150,000
Current Costs:
Materials
P7,400,000
Conversion
P4,710,000
Unit Costs:
Materials
?
Conversion Costs
P6
Materials are added at the start of the process.
The Company uses the FIFO method of costing.
Inspection occurs, when production is 100% complete.
Normal spoilage is 11% of goods units transferred out during August.
What are the cost allocated to?
Next Department
In Process, End
Period Cost
a. 8,160,0000
3,426,400
1,280,000
b. 11,140,000
2,220,000
206,400
c. 9,860,000
3,239,600
205,000
d. 11,083,600
2,220,000
206,400
Answer & Explanation
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