Exercise 7-3 INCREASE IN QUANTITY - FIFO NIV Chemrez Company produces a chemical preservative in two departments, Refining and Blending. The addition of chemical to the liquid base in the second department increases the total quantity of the product. Materials are added at the beginning of the process in the Blending department. At the end of March, there were 2,000 units in process, 20% complete as to labor and 40% complete as to overhead. During April, 5,000 units were received from the preceding department. After adding materials in this department, the quantity of units in process doubled. At the end of the month, there were 1,500 units still in process, 60% complete as to labor and 80% complete as to overhead. Cost data related to April operations follow: Beg. Invty Added this Period Costs from preceding dept P2,460 P12,500 Materials 500 2,500 Direct labor 150 3,300 Factory Overhead 600 7,630 Required: Using the FIFO cost flow, prepare a cost of production report for the Blending Department for April. Exercise 7-4 INCREASE IN QUANTITY-AVERAGE Cola Company produces a soft drink in three departments, Syrup, Carbonation, and Bottling. Syrup, which gives the drink its flavor, is produced in the first department. The syrup is then transferred to the second department, where carbonated water is added to give the drink its fizz. After carbonated water has been added, the liquid drink is bottled. The company uses average costing to account for work in process inventories. Data related to operations in the Carbonation Department during October are: Quantity Data: WIP, beg (75% done) Received from Syrup Dep't Increase in units this dep't 1,000 2,000 Transferred to next dep't WIP, end (25% done) 7,800 1,200 6,000 Cost Data: WIP, beg Added this month Costs from preceding dep't P1,120 P9,680 Materials 140 1,210 Direct labor 65 1,960 Factory Overhead 120 3,120 Required: Prepare a cost of production report for the Carbonation Department. Exercise 7-5 NORMAL LOSS - FIFO SUCCEEDING DEP'T The following data pertain to the production of the second department of Sumi Manufacturing Corp. for the month of March: WIP, beg Received from department A WIP, end 5,000 units; 20,000 units @ P1 done 6,000 units: 2/3 done Lost units Cost data: WIP, beg Cost this Dep't 2,000 units P14,100 Factory Overhead QUIS 39,900 23,940 15,960 Materials Direct labor Factory costs are evenly applied and all lost units were considered normal. Required: Prepare the cost of production report of Department B for the month of March assuming the following independent cases: [a] Loss occurred at the start of process; [b] Loss occurred during process; [c] Loss occurred at the end of process. SITY Exercise 7-6 NORMAL LOSS - AVERAGE SUCCEEDING DEP'T The Lanmi Company uses a process cost system. On May 1, the company had 500 units in production in the Mixing Department. All materials had been added to these units, but processing was only one half complete. Cost applicable to the beginning inventory are: Cost from prior department, P130,620; Materials, P109,200; Labor, P114,450: Overhead, P120,600. During the month, an additional 14,300 units were transferred into the Mixing Department with prior department costs of P2,257,212. Additional costs incurred in the Mixing department are: Materials, P1,441,140; Labor, P1,684,200: Overhead, P2,222,400. A total of P13,600 units were transferred out to finished goods. The ending work in process inventory consisted of 900 units to which all materials had been added, but on which only 75% of the processing had been completed. The other units were lost as normal spoilage at the end of the process. Prepare the cost of production report of the Mixing Department for the month of May.