Julianna Isabel S.

Gontang AC12
Process Costing Problem and Solution

Fitz"s Root Beer is a manufacturer that uses process costing for its bottling department.
It bottled 2,000 units of root beer during the period. At the end of the period, 500 units of
root beer are still being processed by the bottling department. The 500 units still in process are 100%
complete with respect to Direct Materials but 80% complete with respect to conversion Cost.

Direct Materials Conversion Costs

Units Complted (during the period) 2,000 2,000
Units still in process (at the end of the period) 500 500
Costs already in WIP (at the beginning of the period) 1,000 1,200
Cost incurred (during the current period) 225 240
Cost per Equivalent Unit 0.49 0.60

Cost Assigned to: Total:

Units Completed 980 (2000*0.49) 1,200 (2000*0.60) 2,180
Units still in process 245 (500*0.49) 240 (400*0.60) 485
Cost per EU

DM:
1000+225
2000+500

CC:
1200+240
2000+(500*80%)

500*80% = 400