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A company operates a process in which no losses are incurred. The process account for last month,
when there was no opening work-in-progress, was as follows:
Process account
$ $
Costs arising 624,000 Finished output (10,000 units) 480,000
Closing work-in-progress (4,000 units) 144,000
–––––––– ––––––––
624,000 624,000
–––––––– ––––––––
The closing work in progress was complete to the same degree for all elements of cost.
What was the percentage degree of completion of the closing work-in-progress?
? 12%
? 30%
? 40%
? 75%The cost per unit of the finished output is 480,000/10,000 = $48 per unit.
The cost per units of the closing WIP is 144,000/4,000 = $36 per unit.
Therefore the % completion of the WIP = 36/48 = 75%
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