PLEASE ANSWER ALL QUESTIONS: During July, the following costs were incurred: Mat

Question

PLEASE ANSWER ALL QUESTIONS:

During July, the following costs were incurred: Materials (30,000 units) $24,900 Labour and overheads $20,075 At the beginning of July, there were 15,000 units of work in progress valued as follows: Materials (100% complete) $9,000 Labour and overheads (40% complete) $1,250 At the end of July, there were 5,000 units of work-in-progress. They were 100% complete for materials and 50% complete for labour and overheads. Using both FIFO approach and Weighted Average approach: (a) calculate how many units were completed during July (b) calculate the cost per unit (c) value the finished items and the closing work-in-progress (d) prepare a Process Account. (Note: assume no losses)

Explanation / Answer

Solution - FIFO Approach:

a.

b.

c.

Value of finished items = $49,700

Value of closing WIP = $5,525

d.

Solution - Weighted Average Approach:

a.

b.

c.

d.

Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 15000 Units started this period 30000 Total unit to be accounted for 45000 Units Accounted for: Units completed and transferred out From beginning inventory
Material - 0%
Conversion - 60% 15000 0 9000 Started and completed currently 25000 25000 25000 Units in ending WIP
Material - 100%
Conversion - 50% 5000 5000 2500 Total units accounted for 45000 30000 36500

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