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Production details for Process 1 are as follows:
OWIP, 1st April 400 units – 60 % complete
CWIP, 30th April 600 units – 20% complete
Units started 1,000 units
Units completed 800 unitsThe degree of completion quoted related to labour and overhead costs. Three quarters of the materials are added at the start of the process and the remaining quarter added when the process is 50% complete. The company uses the FIFO method of the cost allocation.
The equivalent units of production for materials in the period are:
A 1,250
B 1,000
C 850
D 680Hi, can you please help me with the below question:
Can you please explain why the below solution is different to what we are being taught?
A company uses weighted average method to value its WIP, following information is available :
Regarding Process X of the company:
Value Opening WIP 660units $990
Units added in period 1,500units $2,250
Units transferred to Process Y 1,050 $1,575If the units are 50% complete for material, what is the value of closing WIP of Process X for
period 1?A $1,110
B $832.50
C $1,665
D $1,125I calculate E.U (660+1050+(1110*50%) = 2265
Total Process Costs = (990+2250) = 3240
Cost per EU = 3240/2265 = 1.43
Closing WIP = (1110*50%)*1.43 = 793.65SOLUTION
Value of closing WIP = Value of opening WIP + Value of units transferred into the process – Value of units transferred out of the process = $990 + $2,250 – $1,575 = $1,665.
If materials were the only cost involved, then you would do as you have calculated and the cost per equivalent unit would indeed be $1.43.
However if materials were the only cost involved then the transfers out would be valued at 1,050 x $1.43 = $1,501,50. They are actually valued at $2,250 and so there must be other costs and not just materials.If you produce the t-account as I show in my lectures, then whereas usually we have to value both the transfers out and the WIP, here we know the transfers out and so the closing WIP must simply be the missing figure.
Hi Can you help me below question
the practices test of finding the cost of the value of the closing inventory of product X
Total Joint costs $ 384,000
Further processing cost (product H) $ 159,600
Using the Joint cost apportioned to H = 228,000 sales / 640,000 total sales x cost $384000 = $136,800
Total Product cost ($136,800 + 159,600) = $296,400
** Closing inventory values of H = 28,000 / 228,000 X 296,400 = $36,400
My Question is where can i get this **28,000** fromIn future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
Either you have not typed out the whole question, or there is an error in your book, because there is not enough information to be able to arrive at the “28,000”. If it is a question from the BPP Revision Kit then tell me which question so that I can check for myself.
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