- This topic has 1 reply, 2 voices, and was last updated 9 years ago by
.
- Posts
Hi,
If anyone could please help me with the question from BPP F2 Study Guide.
Walter Co uses the FIFO method of process costing. At the end of a four-week period, the following information was available for process P.
Opening WIP 2000units (60% complete) costing $3000 to date
Closing WIP 1500units (40% complete)
Transferred to next process 7000unitsHow many units were started and completed during the period?
A) 5000units
B) 7000units
C) 8400units
D) 9000unitsIt seems to me that none of the answers is correct. My reasoning:
Total output = 2000+7000 – 1500 = 7500
Less opening WIP (completed first) 2000
Thus the answer should be 5500units.Or would it be 2000×0.4 (800units) + 1500×0.4(600units) + 5500units= thus 6900 units?
Would appreciate any help on this.
If 7,000 we completed an transferred, and 2,000 were in opening WIP, then it means that the remaining 5000 were started and completed during the period.
I do suggest that you watch our free lectures on process costing where this is explained.
(Our free lectures are a complete course for Paper F2 and cover everything needed to be able to pass the exam well)
- You must be logged in to reply to this topic.