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Hi john sir, how r you?
Q#1. John sir , i often read in process costing that W.I.P and work transferred out can be valued at Weighted average and FIFO bases., But John sir why not on the base of LIFO. Text books does’t discuss this.
Q#2. John sir, look at the following question. I could’t got the answer.
Unemployment numbers actually recorded in a town for the second quarter of the year 2000 were 4700. The underlying trend at this point was 4300 people and the seasonal factor is 0.92. Using the multiplicative model for seasonal adjustment, what is the seasonally-adjusted figure ( in whole number ) for the quarter?
Q1 In practice, there are no rules for management accounting – you can do what you like.
For the exam, only weighted average and FIFO are in the syllabus for process costing.Q2 To get the seasonally adjust figure, you ‘remove’ the seasonality from the actual figure.
So in this case it is 4700 / 0.92 = 5109Hi John sir, John sir couldn’t got question 2. John sir, Y = T * S. Why we are not multiplying trend with seasonal factor. And also it is confusing me that seasonal factor is 0.92, if actual sales is 4700 then seasonal adjustment should be done in the way that actual sales should be less after adjustment. These points are confusing me.
You multiply the trend by the seasonal factor to get a forecast.
However, to get a seasonally adjusted figure you ‘remove’ the seasonality from the actual figure (to estimate what the actual figure would have been if there was not seasonality).
In this question, because the seasonality is 0.92, you would expect the actual to be lower because of seasonality – if there was no seasonality it would be higher.
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