Question
Starlight Manufacturing Company uses two types of materials in its processing operation and adds these materials as follows: 4 pounds of Material X at the
Starlight Manufacturing Company uses two types of materials in its processing operation and adds these materials as follows:
4 pounds of Material X at the start of the process and two pounds of Material Y when the process is 50% complete. Conversion costs are incurred uniformly throughout the process.
At 50% stage of completion, inspection occurs and any spoiled units are scrapped. 5% of the units processed up to inspection point are considered normal.
The following data pertains to August operation of Starlight Company:
In process, Aug 1 18,000 units, 75% complete In process, Aug 31 6,000 units, 25% complete Units completed & transferred 73,800 units
Unit costs: Material X P6.00 per pound Material Y P4.00 per pound Conversion costs per EUP P8.00
REQUIRED: Prepare a cost of production report
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