• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Process Costing FIFO

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Process Costing FIFO

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • January 3, 2022 at 7:25 am #645207
    dingdong02
    Participant
    • Topics: 14
    • Replies: 1
    • ☆

    STINX Ltd uses process costing. The closing inventory for period 2 was 500 units which were 100% completed as per material and 50% completed as per conversion cost while the cost for material and conversion was $10000 and $5000 respectively. In period 3 1000 units of material were added as input in which was $10000 and 800 units were completed in period 3. The closing was WIP was 50% completed as per material and 50% completed as per conversion cost. There were no losses in the period. Using the FIFO method. Calculate the value of closing WIP for period 3.
    Ans) $9275 but I’m getting $7500.

    January 3, 2022 at 8:39 am #645213
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Are you sure that you have typed out the whole question, because you have not written what the cost of conversion was in period 3.

    January 3, 2022 at 2:37 pm #645229
    dingdong02
    Participant
    • Topics: 14
    • Replies: 1
    • ☆

    Sorry, I’ve missed out In period3 1000 units of material were added as input with a total cost of $10,000. The conversion cost for the period was $10,000 and 800 units were completed in period 3.

    January 3, 2022 at 3:15 pm #645236
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    The opening WIP was 500 units, they input another 1,000 units – so a total being worked on of 1,500.
    800 units were finished and therefore there were 700 units of closing WIP.

    Of the 800 units that were finished, 500 had been started last period and so there was no extra work for materials, and 50% extra worked for conversion in this period.
    The other 300 finished units had the full materials and full conversion cost in this period.

    The closing WIP of 700 units had 50% work for both materials and for conversion cost in this period.

    Therefore the cost per unit for materials = $10,000 / (300 + (50% x 700)) = $15.3846
    The cost per unit for conversion = $10,000 / ((50% x 500) + 300 + (50% x 700)) = $11.1111

    Therefore the value of the closing WIP = (700 x 50% x $15.3846) + (700 x 50% x $11.1111) = $9,273. (The difference from the answer in your book is simply due to rounding which is irrelevant in the exam.)

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy