[deep]

Thank you sir now I shall be able to solve such problematic questions.

[deep]

do look at my answer’s quote for the formula which is not shown clearly in the answer given by me for the question by which it will be easy for you to see the formula…..

[deep]

Dear Anne,
Let me show you the formula to find the started and finished units by which you may get an idea to your question’s answer:

Units
Output transferred to process account 2 xxx
+Opening WIP/ inventory xx
___
Equivalent units xxx
-Closing WIP/ inventory xx
___
Output to finishing goods xxx
– Opening WIP/ inventory xx
___
Started and finshed/ completed answer xxx

According to the formula, the opening WIP should be added to the output of process account that is been transferred from one process account to another process account, by which you may get the equivalent units but the closing WIP should be subtracted by which you will get the output to finished goods. But to get the started and finished units you will have to subtract the opening WIP units. Where after which you can multiply the started and finished units to the cost per equivalent unit subtracting the cost per unit of production overheads that is at the step 3 of statement of evaluation which will be the opening WIP where the formula will be (cost b/d +incurred costs in the month or the year =cost of issues -started and finished cost = output to finished goods -closing WIP =statement of evaluation or the answer of the current process account’s total cost)

[deep]

Yes Sir and thank you sir

[deep]

No sir, I was confused in the question (a) that whether it is a gain or a loss

[deep]

A company operates a process costing system. The following information is relevant for the last period for process 1:
Input: 12000 kg of raw material at $4 per kg.
Direct wages:6000 hours at $5 per hour.
Production overhead absorbed at $7 per labour hour.
Outputs: Normal loss is 10% of input
Transfer to process 2: 11050 kg
All losses have a scrap value of $1 per kg. There was no opening or closing inventory or work-in-progress.
Required:
a) The abnormal gain or loss for period was:
A. 108 kg loss
B. 250 kg gain
C. 950 kg gain
D. 1000 kg gain

b) The cost per kg of output is:
A. $10
B. $11
C. $12
D. $13

[Author]

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