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material input 2000 units – $4000
labour cost -$3120
overhead – $1120normal loss is 3% of input.. all losses sold as a scrap for $8 per unit
period for actual loss 80 units.. no WIP
WHAT IS THE TOTAL VALUE OF FINISH UNITS ?
Are you setting me a test?
I am happy to help if you tell me which part of the question is giving you problems (and if you tell me that you have watched my lecture on Process Costing)
no no sir not at all… i am not setting u any test
actually i practiced bpp and gtg, kaplan and your lecture too… i will sit on exam soon CBE.. i am trying exam kit and mock exam… but i am struggling with techniques… given on the questions.. i can’t catch the techniques and can’t answer… thats y i need your help… i do small mistake and cant find the correct answer… no one is here to help me.. i find this opentution helpful so… i need your help..ok i am answering u which part giving me problems…
normal loss 3%of input =2000*3%=60…. value 60*8=480
actual loss value= 80*8=640abnormal loss 640-480=160
value of finish unit=
4000+1120+3120=8240
8240- 640=7600
is it correct?? 🙁 😮
To get the cost per unit, we work on what we expect to produce.
So….the expected output is 2000 – (3% x 2000) = 1940 units.
The cost is 4000 + 3120 + 1120 = 8240, less the expected scrap money from the expected loss, which is 60 units x $8 = 480
So….the net expected cost is 8240 – 480 = $7760
This gives a cost per unit of $7760 / 1940 = $4
The question asks for the value of the finished units.
The actual loss is 80 units, which means that the finished units is 2000 – 80 = 1920.These are all valued at $4 per unit.
So the total value is 1920 x $8 = $15360
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