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Good afternoon Sir. I am having a problem with a question in BPP regarding process costing (FIFO). From the answer opening WIP is 50 units $610. I’m not able to figure out how the book got opening wip $610. Can you please help me. Here is the question.
If there was closing WIP at the end of the previous period, this becomes opening WIP for the following period:
Raw materials 2,050 units $22,550
Labour $16,304
Overheads $8,212
Opening WIP: 50 units complete as below
Raw materials 100% complete
Labour 60% complete
Overheads 30% complete
Output from Process 1: 2,020 units
Closing WIP: 80 units complete as below
Raw materials 100% complete
Labour 60% complete
Overheads 60% complete
There were no losses.
Required
Prepare a Process 1 ledger account using:
(1) FIFOAssuming that you have copied the question correctly, where is not enough information to arrived at the value of the opening WIP.
Although you obviously cannot be asked to write up the process account in the exam, if you wanted to do so then you would have to be given the value of the opening WIP in the question – you are never able to calculate it. (Are you sure that this question does not follow on from a previous one where the value of the closing WIP of the previous period had already been calculated?)
No. I copied everything that was written in this question. I think maybe it’s an error in the book. Because all question I did had the opening wip mentioned.
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