[Thierry]

Thank you very much for your prompt response. But I must admit that it is very easy to get confused with all the different costs that occur.

[Thierry]

Vare produces various inks at its Normanton factory. Production details for Process 1 are as follow:

Opening WIP, 1 April 400 units 60% complete
Closing WIP, 30 April 600 units 20% complete

Units started 1000
Units finished 800

The degree of completion quoted relates to labour & overhead costs. Three-quarter of the materials are added at the start of the process & the remaining quarter added when the process is 50% complete. The company uses FIFO method of cost allocation.

The equivalent units of production for materials in the period are:

A 1250
B 1000
C 850
D 680

Good day sir, could please explain me how you come to answer of that question please?
Many thanks

[Thierry]

Good day Mr Moffat, I have a little trouble to understand one topic in the exam kit on Irrecoverable debts and allowances for receivables. Exercice no 71, because they said: one-third higher and not a quarter higher how does the answer gives us 1000 by using 3/4 and not 1/3 as it said? thank you.

The sales revenue in a company was $ 2 million and its receivables were 5% of sales. The company wishes to have an allowance for receivables of 4% of receivables, which would make the allowance one-third higher than the current allowance.

[Author]

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