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DM Company operates a process costing system with three processes that is, the assembly
process, painting process and the finishing process. The following information relates to the
painting process in May:
– 24,000 tons of materials were transferred from the assembly process to the painting process
at a cost of RM24,000. Additional materials in the current period amounted to RM47,200.
– Conversion cost incurred in the painting process amounted to RM68,400.
– At the end of May, 20,000 tons were transferred to the finishing process. The closing WIP
was 4,000 tons. There were no normal losses in the process.
The details of the closing WIP are as follows:
Added material 90% complete
Conversion cost 70% complete
Required:
(a) Prepare the painting process account for the month of May.
In June, the painting process transferred 24,000 tons to the finishing process. The input from
the assembly process in June was 22,000 tons at a cost of RM22,000. The conversion costs
incurred were RM73,825. New materials introduced in June amounted to RM47,840. The
closing WIP in June was 2,000 tons, with 80% completed as per the materials introduced and
65% completed as per the conversion costs.
Required:
(b) Prepare the process account for the painting process in June using the weighted average
method.can i know how to find cost per equivalent unit& painting process acc? i cant find with the same ans
the ans is of (a) Cost per equivalent unit: Assembly Process – 1; Material – 2; Conversion – 3
Painting Process account: Finishing process – 120,000; CWIP – 19,600
(b) Cost per equivalent unit: Assembly Process – 1; Material – 2.15;
Conversion –3.25
Painting Process account: Finishing process – 153,600; CWIP – 9,665Appreciate that you cannot ever be required to produce the t-accounts in the exam (although you can certainly be asked to calculate the values).
In May, the costs per unit are calculated as follows:
Assembly process: 24,000 / (20,000 + 4,000) = 1.
Additional materials: 47,200 / (20,000 + (90% x 4,000)) = 2.
Conversion costs: 68,400 / (20,000 + (70% x 4,000)) = 3In June, the cost for conversion is calculated as follows:
(73,825 + (4,000 x 2)) / (24,000 + (65% x 2,000)) = 3.25
It is the same logic when calculating the other two costs for June.
This is all explained in my free lectures on process costing. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
Sorry, it was my typing error from typing too fast 🙂
It should read:
(73,825 + (4,000 x 70% x 3)) / (24,000 + (65% x 2,000)) = 3.254,000 x 70% x 3 is the value of the WIP brought forward for conversion costs.
Have you watched the free lectures on this?
Yes, but still got some not so understand
Sorry ,i got another 1 more question
1) A business makes one product that passes through a single process. The business uses weighted
average costing. The details of the process for the last period are as follows:
Materials 98,000
Labour 60,000
Production overheads 39,000
Units added to the process 1,000There were 200 units of opening WIP which are valued as follows:
Materials 22,000
Labour 6,960
Production overheads 3,000
There were 300 units of closing WIP fully complete as to materials but only 60% complete for
labour and 50% complete for overheads. There were no process losses.
Prepare process account and shows the following:
(a) The value of the completed output for the period.
(b) The value of the closing WIP.Ans is :Cost per equivalent unit: Material – 100; Labour – 62; Overheads – 40
Completed output – 181,800; Closing WIP – 47,160But i get the ans for material cost per equivalent is 92.3
my calculation is (1000+300) / (98000+22000)can let me know which part i forget to calculate ???
The total cost for the materials is 22,000 (for the opening WIP) plus 98,000 (spent during the period). So a total of $120,000.
The total number of units is 200 (the opening WIP) plus 1,000 (added during the period). So a total of 1,200.
Therefore the cost per unit for materials = $120,000 / 1,200 = $100.
How about the CWIP?
The ans is 47160
But i get 16440,is it (300×100)+(120×62)+(150×40)???
I can’t get the ans 47160
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