Reference no: EM132739077

AAA Inc. is a company manufacturing a product which undergoes a uniform process prior to its completion. AAA Inc. uses the weighted average process costing system. For the year ended December 31, 2019, the following data are provided by the company:

a. The WIP inventory on January 1, 2019 is 10,000 units which are 80% incomplete as regards to conversion cost while the work-in-process inventory on December 31, 2019 is 60% complete as to conversion cost.

b. The total units started during the year amounted to 90,000 units while the total units manufactured during the year amounted to 70,000 units.

c. There is no spoilage during the period.

d. It is the company's policy to apply direct labor and factory overhead evenly throughout the period while 2/5 of direct materials are added at the start of the process while the remaining direct materials are added at the end of the process.

e. The cost of January 1, 2019 work in process inventory consists of P100,000 direct material, P200,000 direct labor and P300,000 factory overhead.

f. The total manufacturing cost for the year consisted of P2M direct material, P5M direct labor and P3M factory overhead.

Problem 1. Compute for the cost per equivalent unit of production of Direct Material and Conversion Cost.

Problem 2. Compute for the value of cost of goods manufactured.

Problem 3. Compute for the ending work in process inventory.