Process Costing

Part I: Computation of Equivalent Units of Production (EUP) without spoilage

Problem 1:
Double Click Manufacturing Co. uses process costing in the manufacture of its sole product. The following
production data are presented to you:

Beginning inventory (40% converted) 10,000 units

Started in process 75,000 units
Ending inventory (60% converted) 20,000 units

All materials are added at the start of processing.

1. Using average costing, compute for the EUP for materials and conversion.
2. Using FIFO, compute for the EUP for materials and conversion.

Problem 2:
Double Click Manufacturing Co. uses process costing in the manufacture of its sole product. The following
production data are presented to you:

Beginning inventory (40% to complete) 10,000 units

Started in process 75,000 units
Ending inventory (60% to complete) 20,000 units

All materials are added at the end of processing.

1. Using average costing, compute for the EUP for materials and conversion.
2. Using FIFO, compute for the EUP for materials and conversion.

Problem 3:
Double Click Manufacturing Co. uses process costing in the manufacture of its sole product. The following
production data are presented to you:

Transferred out 120,000 units

Started in process 150,000 units
Ending inventory (7/8 converted) 45,000 units

Forty percent of materials is added when the processing is halfway completed; balance when 80%
completed. Beginning inventory, if any, need 3/5 to be completed.

1. Using average costing, compute for the EUP for materials and conversion.
2. Using FIFO, compute for the EUP for materials and conversion.

Problem 4:
Double Click Manufacturing Co. uses process costing in the manufacture of its sole product. The following
production data are presented to you:

Beginning inventory (¾ to complete) 8,000 units

Transferred out 40,000 units
Units started 60,000 units
Ending inventory (6/7 completed) ???

1
20% of materials is added when the units are 25% completed; remaining materials are added when the
units are 90% converted.

1. Using average costing, compute for the EUP for materials and conversion.
2. Using FIFO, compute for the EUP for materials and conversion.

Problem 5:
Monique Textile Inc., produces sophisticated fabrics that are being supplied to 5-star hotels and to high-
end condominiums that require components to be integrated in various points of the production. At the
beginning of the month, 4,000 units were in process. These were 20% converted.

For the current month, Monique started to produce 16,000 units. Only 12,000 of these were completed.
The remainder was behind 25% from completion.

Due to the complexity of this textile, materials are added at various points in the production. To sum up:

Direct materials:
40% are put into production at the beginning
50% are placed when the fabrics are 55% completed
10% are placed when the fabrics are 99% done

1. Using average costing, compute for the EUP for materials and conversion.
2. Using FIFO, compute for the EUP for materials and conversion.