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July 16, 2020 at 10:28 am
Sir, regarding Q3 the cost of material is $0.75 , if we times 15000 units from last month, it equals to $11250, not the $9000 mentioned in question. I find this quite confusing, why shouldn’t them be equal?
November 12, 2019 at 1:45 pm
should we take more decimal places when calculating the unit cost?
John Moffat says
November 12, 2019 at 4:47 pm
There is no need to 🙂
July 9, 2019 at 3:47 pm
Just have a quick question re the example above. Can you please advise why total of 15000 units were added for OP WIP for Labour and Overheads, they were only 40% complete from the previous month. Shouldn’t we have added 9000 units?
July 10, 2019 at 12:35 pm
No. We are using the weighted average cost approach (not FIFO) and therefore we include all the WIP b/f (and include all the costs, including the amount spent in the last period starting the WIP.
February 16, 2019 at 4:44 pm
oh okay.. thank you sir.
February 17, 2019 at 9:53 am
You are welcome 🙂
February 16, 2019 at 1:28 pm
sir in the example above could u plz explain why can we omit OP WIP and START TO FINISH plz
February 16, 2019 at 4:05 pm
But we don’t omit them!
I assume though that you are referring the calculation of the number of units that were completed from start to finish during the period (i.e. completed in full). This is because these incurred full cost per unit, whereas the opening and closing WIP only incurred part of the cost per unit and so we bring in the equivalent units for these two.
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