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opening work in progress 2000 units
total number of units completed 14000 units
closing work in progress 3000 units degree of completion 30%material input cost $51000 o/wip cost b/d $8500
conversion input cost $193170 o/wip cost b/d $133310what was the value of closing work in progress for last period ?
answer= 24180
i totally have no idea how to begin and what does o/wip cost b/d mean?
please help me with the working . thank you.Sorry, but you are going to have to watch my free lectures on this – I am not going to type them out again here!
My lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Sir, can you clear this doubt for me.
In process costing when the question states that both Owip and Cwip are 30%
I should assume that they are reffering to both material and Conversion cost?
Sir, can you clear this doubt for me.
In process costing when the question states that both Owip and Cwip are 30%(without stating if material is 100%)
I should assume that they are reffering to both material and Conversion cost?Reason for this is that when i calculate my equivalent units i dont know if Closing wip for materials was 100% completed.
We always assume that material is 100% complete unless the question specifically says different.
Think about it – suppose you are making tables. Then almost certainly all of the wood (the material) will be there from the start. If it is not finished then it because you have not finished putting it together, or painting it, or whatever. 🙂
Thanks sir 🙂
I understood this logic but however i came across a question which gave a T account like this:
Opening work in progress 200U $160
Material 1000U $1100
Conversion costs $900Output to next process 800U
Using Avco calculate the Cwip value*The doubt is that i don’t know if the OWIP $160 relates to Either material or Conversion cost for to put it in my working tables. Because the question didnt specify.
I don’t know where you found this question, but if you have copied all of it correctly then it is impossible because it does not say the % finished for either the opening or closing WIP (regardless of whether materials are 100% finished or not), and without that it is impossible to get a cost per unit and to value the closing WIP.
Surely, whichever book you found it in also has an answer? I would be fascinated to know how they managed to get an answer 🙂 Assuming you have copied the question correctly, then I can only think that they typed it wrongly.
Sorry i missed out the percentage which was 40% for both opening Wip and closingWip but i think they added up Owip cost to the material and conversion cost to get the total cost then calculated the average cost per unit.
The issue was that the OWIP % didnt say if it was for material or conversion cost as compared to other questions which they specified. Because when i use the Statement of EU i dont know were the owip relates to. S
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