ABC Company produces products that require a process costing method. For the first year of operations ended December 31, 2014, the following data are provided by the company:Units started during the year amounted to 80,000 units while total manufactured and completed units amounted to 68,000 units.There is no spoilage during the year.Total manufacturing cost for the period consisted of P320,000 for direct material, P250,000 for direct labor and P200,000 for overhead.It is the company’s policy to add 3/5 of direct materials at the start of production and the remaining is added by the time it is completed.Ending inventory is 40% to complete as to direct labor and 60% as to overhead.During the second year 2015, the following data were gathered:Units started consists of 63,000 units and at the end of the period, only 15,000 units were left, and these units were half complete as to direct labor and 80% to complete as to overhead.Current costs include P400,000 for direct materials, P200,000 for direct labor and P180,000 for overhead.There is no spoilage for the year.Required:Prepare a cost of production report for 2014 using FIFO method.Prepare a cost of production report for 2015 using FIFO method.

Name: ABC Company produces products that require a process costing method. F
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: ABC Company produces products that require a process costing method. For the first year of operations ended December 31, 2014, the following data are provided by the company:Units started during the year amounted to 80,000 units while total manufactu

The total cost of producing a product, including raw materials and operating costs, is detailed in a…

Answered: ABC Company produces products that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

ABC Company produces products that require a process costing method. For the first year of operations ended December 31, 2014, the following data are provided by the company:

Units started during the year amounted to 80,000 units while total manufactured and completed units amounted to 68,000 units.
There is no spoilage during the year.
Total manufacturing cost for the period consisted of P320,000 for direct material, P250,000 for direct labor and P200,000 for overhead.
It is the company’s policy to add 3/5 of direct materials at the start of production and the remaining is added by the time it is completed.
Ending inventory is 40% to complete as to direct labor and 60% as to overhead.

During the second year 2015, the following data were gathered:

Units started consists of 63,000 units and at the end of the period, only 15,000 units were left, and these units were half complete as to direct labor and 80% to complete as to overhead.
Current costs include P400,000 for direct materials, P200,000 for direct labor and P180,000 for overhead.
There is no spoilage for the year.

Required:

Prepare a cost of production report for 2014 using FIFO method.
Prepare a cost of production report for 2015 using FIFO method.

Expert Solution

Step by step

Solved in 3 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions