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ACCA F2 Process Costing – Work-in-Progress part b
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At the beginning of July –
Materials(100%)- 9000
Labour & O/H(40%)- 1250
Why can’t I work out 100% value , then 60% and use that?
Instead of 15000 x 60% x 0.55 ?
Of course you can!
60% x (15,000 x 0.55) is exactly the same as 15,000 x 60% x 0.55.
(But, of course, it is only the labour and overheads because the materials are already 100% finished and so do not need any extra work)
Thank You Sir 🙂
Can you tell me why the finished WIP bf for the 15,000 units is not $ 9,000? I am lost at that part
I assume that you have downloaded the free Course Notes that are used in the lectures?
According to the question, the WIP brought forward is valued at $9,000 for materials plus $1,250 for the labour and overhead work that had been done.
How many marks would this question carries?
2 marks?
Hi, can anyone pls help me with this problem?
A company operates a process costing system using the FIFO system of valuation. No losses occur in the process. The following data relates to last month:
Opening work-in-progress: 200 units with a total value of $1530
Input to the process: 1000
Completed production: 1040
Last month the cost per equivalent unit of production was $20 and te degree of completion of work-in-progress was 40% thoughout the month.
What was the value(at cost) of last month’s closing work-in-progress?
a) $1224
b) $1280
c) $1836
d) $1920
My ans was D and my workings as follows:
WIP (c/f): (1000+200)-1040 = 160units
Value: 160×0.6x$20 = $1920
However, the actual ans was B because they used 0.4 instead of 0.6. As such, I would like to know why is it that they used 0.4 for the valuation instead?
Thanks!
It is because the closing work-in-progress is 40% complete. If it is 40% complete then we need to value at 40% of the cost.
(The remaining 60% of the work will be done next month).
(Please ask this sort of question in the Ask the ACCA Tutor Forum, rather than as a comment on the lecture.)
Thx sir, sorry for posting here.
No problem 🙂
Just made my work easier.Its simplified and easy to understand:)
Could this type of topic qualify for one of the new 10 mark questions?
No, but that does not make it any less important, because there may be several 2 mark questions.
Thank you.
You’re welcome 🙂
I wish I watched these lectures with the notes first – I’ve spent the last couple of months working through the notes alone!
Nevermind though, it all seems so much easier now. Thank you.
You are welcome – I am pleased that they are useful 🙂
Thank you.
Thank you very much. Good teaching.
wow……………….. now i understand it tanks
Thanks so much!! I got stuck yesterday with that chapter as in my book is not explained at all .. one more time: THANKS!!
WELL UNDERSTOOD, THUMBS UP
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GREAT! Thanks for the lecture, extremely, helpful!
the lecture for processing costing WIP – FIFO is being interrupted several times. could you please help?
@mellen,
i have encountered the same problems.
EXCELLENTTTTTTTTTTTTTTTTTt
would you have tthe answers to the multi choice question please so i know i am on the right track,,,…plzzz