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A company operates a process in which no losses are incurred. The process account for last month,when there was no opening WIP,was as follows:
Costs arising. 624000
Finished output(10000units) 480000
Closing WIP (4000units) 144000The closing WIP was complete to the same degree for all elements of cost.
What was the percentage degree of completion of the closing WIP?
Answer is 75%..
Sir can you explain how we got that answer…
The cost per unit of the finished output is 480,000/10,000 = $48
The cost per unit of the closing WIP is 144,000/4,000 = $36
Therefore the degree of completeness must be 36/48 = 75%
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