Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Process costing work in progress
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- September 4, 2017 at 2:16 pm #405354
Ohk it brings some light.English is my second language?.Please consider the following in relation to my previous question also.
Avarage (Pty)ltd is a small publisher of quality textbook for wide range of subjects.During the month of July 2015,a special order was received for 100 textbook was received for the next three months.Production on textbooks was scheduled as follows:
Textbook started.July 2015(40000) , August 2015(35000),September 2015( 25000)Incomplete textbook at month end(proportion complete)July 2015(10 000)30%,August 2015(5000)95%,September(NA)
All textbooks are produced via a standardised process below.
Raw Materials.
A the start of the process,the paper to be printed on(which comprises 20% of the material cost each month) is fed into the printing press.As the paper passes via the printing press,the text is printed onto the paper.The ink(which comprises 50% of the raw materials cost each month)used to performe this is considered to be incurred evenly throughout the process.Finally, at the 90% of the way through the
process,the hard outer covers of the book as well as binding are added.These comprises the remainder of the raw materials costs each month.
Labour and overheads
These costs are considered to be incurred throughout the process.
REQUIRED
Calculate the equivalent production units of raw materials for the 3 months assuming the company uses weighted average method.You should present a single number for each paper, which incorporate the paper,ink and outer covers.Please help.I’m not clear with the solution.
Solution.Sorting the units(of which I understood in the solution)
1.Opening WIP:July (0),August(10 000),September(5000)
2.Started July(40 000),August (35000),September(25000)
3.Completed July(30 0000),August (40000),September(30000)
4.Closing WIP:July(5000),August (5000),September (0)I don’t understand the following part of the solution.
Completed July(30000),August(40000),September(30000)-I understood
I did not understand the part:
C/WIP. July(3500 W1),August(4875 W3),September (0)
WA Eq.Units July(33500),August (44875),September (30000).
Less O/WIP July(0),August(3500 W1),September (4875 W3)
=FIFO Eq.Units July(33500),August (41375),September (25 125)
Working (W)
W1.10000*(20%+30%*50%)
W2.10000*(70%*50%+30%)
W3.5000*(20%+95%*50%+30%
W4.5000*(5%*50%)
The percentage thing!!!!?September 4, 2017 at 5:10 pm #405424As I replied before, this could not possibly be asked in the Paper F2 exam!
It is therefore wasting your time attempting it, and would be wasting my time answering it.
Again, you should be using a Revision Kit from one of the ACCA approved publishers. They are full of exam standard questions – not ridiculous question like this one which could not possibly be asked!!
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