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During October work commenced on 110,000 new cars.
This was in addition to 20,000 that were 50% complete at the start of the month.
at the end of October there were 40,000 cars that were 50% complete.Costs for October were:
$ 000
Brought fwd 11,000
Incurred in this period 132,000Is this factory chooses the weighted average method of spreading costs, what is the cost per car for October production?
A $ 1,100
B $ 1,200
C $ 1,210
D $ 1,320I have worked my answer to B 1,200, is this correct?
In above question
equivalent units produce in October
Start to end (110000-40000)=70000
(Plus) Bf unit (20000*0.5) =10000
(Plus) cf unit (40000*0.5)=20000
Total equivalent unit. = 100,000solution of above question in Kaplan kit I don’t understand why they just take 20,000 unit complete when they are 50% complete
But the solution as you have typed it is not just taking 20,000 units as being complete!
The b/f WIP was 50% complete at the start of the period and so the work to complete them is the other 50% of 20,000 (i.e. 20,000 x 0.5).
Have you watched my free lectures on Process Costing?
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