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Prossing Costing(FIFO method of cost allocation)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Prossing Costing(FIFO method of cost allocation)

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 4, 2016 at 10:07 pm #313725
    deep
    Member
    • Topics: 4
    • Replies: 6
    • ☆

    Dear Sir, I am confused which the opening and the closing WIP and of giving costs to the units in this question:
    A company which operates a process costing system had work-in-progress at the start of last month of 300 units (valued at 1710) which were 60% complete in respect of all costs. Last month a total of 2000 units were completed and transferred to the finished goods warehouse. The cost per equivalent unit for costs arising last month was $10. The company uses the FIFO method of cost allocation. What was the total value of the 2000 units transferred to the finished goods warehouse last month?
    (A) 19910
    (B) 20000
    (C) 20510
    (D) 21710

    May 5, 2016 at 7:52 am #313753
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51571
    • ☆☆☆☆☆

    Of the 2,000 units completed, 300 of them were already in progress and therefore the remaining 1700 we completed in full during the period.

    The 1700 will all be value at $10, so a total of $17,000

    The 300 will be valued at the 1710, plus the cost of finishing them which is 300 x 40% x $10 = $1,200. So a total for these 300 of $2,910

    So the total value of the 2,000 = 2,910 + 17,000 = $19,920.

    I do suggest that you watch our free lectures where all of this is explained in detail.

    (Our free lectures are a complete course for Paper F2 and cover everything needed to be able to pass the exam well.)

    May 5, 2016 at 9:41 am #313779
    deep
    Member
    • Topics: 4
    • Replies: 6
    • ☆

    Thank you sir now I shall be able to solve such problematic questions.

    May 5, 2016 at 11:53 am #313800
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51571
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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