MAProcess Costing

Read my answer to one of your other questions!

Hi, can you please help me with the below question: Can you please explain why the below solution is different to what we are being taught? A company uses weighted average method to value its WIP, following information is available : Regarding Process X of the company: Value Opening WIP 660units $990 Units added in period 1,500units $2,250 Units transferred to Process Y 1,050 $1,575 If the units are 50% complete for material, what is the value of closing WIP of Process X for period 1? A $1,110 B $832.50 C $1,665 D $1,125 I calculate E.U (660+1050+(1110*50%) = 2265 Total Process Costs = (990+2250) = 3240 Cost per EU = 3240/2265 = 1.43 Closing WIP = (1110*50%)*1.43 = 793.65 SOLUTION Value of closing WIP = Value of opening WIP + Value of units transferred into the process – Value of units transferred out of the process = $990 + $2,250 – $1,575 = $1,665.

If materials were the only cost involved, then you would do as you have calculated and the cost per equivalent unit would indeed be $1.43. However if materials were the only cost involved then the transfers out would be valued at 1,050 x $1.43 = $1,501,50. They are actually valued at $2,250 and so there must be other costs and not just materials. If you produce the t-account as I show in my lectures, then whereas usually we have to value both the transfers out and the WIP, here we know the transfers out and so the closing WIP must simply be the missing figure.

Hi Can you help me below question the practices test of finding the cost of the value of the closing inventory of product X Total Joint costs $ 384,000 Further processing cost (product H) $ 159,600 Using the Joint cost apportioned to H = 228,000 sales / 640,000 total sales x cost $384000 = $136,800 Total Product cost ($136,800 + 159,600) = $296,400 ** Closing inventory values of H = 28,000 / 228,000 X 296,400 = $36,400 My Question is where can i get this **28,000** from

In future you must ask in the Ask the Tutor Forum if you want me to answer - this forum is for students to help each other. Either you have not typed out the whole question, or there is an error in your book, because there is not enough information to be able to arrive at the "28,000". If it is a question from the BPP Revision Kit then tell me which question so that I can check for myself.