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Yeomen Ltd uses process costing and the FIFO method of valuation. The
following information for last month relates to Process G, where all the
material is added at the beginning of the process:
Opening work-in-progress: 2,000 litres (30% complete in respect of
conversion costs) valued in total at£24,600
(£16,500 for direct materials; £8,100 for
conversion).
Costs incurred:
Direct materials £99,600 for 12,500 litres of input
Conversion £155,250
Normal loss: 8% of input in the period. All losses, which are
incurred evenly throughout the process, can be sold
for £3 per litre.
Actual output: 10,000 litres were transferred from Process G to the
finished goods warehouse.
Closing work-in-progress: 3,000 litres (45% complete in respect of
conversion costs).
Required:
(a) Prepare the Process G Account for last month in £ and litres.There is no point in simply typing out a full question and expecting to be provided with a full answer.
You must have an answer in the same book which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
This question could not possibly be asked in the exam because you cannot be asked to write up a process account (although you are expected to be able to calculate all of the relevant figures).
I suggest that you watch my free lectures on process costing. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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