Source: Kaplan Exam Kit
Opening WIP, 1 April 400 units 60% complete
Closing WIP, 30 April 600 units 20% complete
Unit started 1000
Unit finished 800
The degree of completion quoted relates to labour and OHs cost. Three-quaters of the material are added at the start of the process and the remaining quater added when the process is 50% complete. The company uses the FIFO method of cost allocation
What are the equivalent units of production for material in the period?
A 1250
B 1000
C 850
D 680
The Answer is C but I don't understand how..???
7y ago#1The opening WIP is 60% complete and therefore has all the materials because it is more than 50% complete - so no extra materials in this period.
They finished 800 units, but 400 of them were already in the opening WIP. So only the remaining 400 were done from start to finish - they had all the materials in them.
The closing WIP is 20% complete and therefore only had 3/4 of the materials in them because less than 50% complete. So the equivalent units are 3/4 x 600 = 450.
Therefore the total equivalent unit are 0 + 400 + 450 = 850
If input is 20000 and notmal loss is 10%
and actual loss is 25% of output.
What is Abnormal Loss and Actual Output?
7y ago#3Please don't simply set test questions and expect an answer - you must have n answer i the same book in which you found the question. Ask about whatever it is in the answer that you are not clear about and then I will help you.
Please watch my free lectures on this.
I've watched all your free lecture on this chapter..
The Abnormal Loss is 2000
The Actual Output is 16000
But they didn't provide any solution..
7y ago#5If the actual loss is 25% of output, then for every 100 output the loss must have been 25 and so the input must have been 125.
Therefore the actual output is 100/125 x 20,000 = 16,000, and the actual loss is 4,000.
The normal loss is 10% x 20,000 = 2,000.
Therefore the abnormal loss = 4,000 - 2,000 = 2,000.
Sign in to reply to this topic.