In a certain process, material is mixed and cooked in batches of 1,000 lbs each. Cooking results in 10 percent
In a certain process, material is mixed and cooked in batches of 1,000 lbs each. Cooking results in 10 percent loss of weight of the mixture. Since the cooking requires considerable skill and constant watching, there is generally a further loss for spoilage which is not discovered until processing has been completed. Also, past experience shows that normally two batches out of every ten started in the process are spoiled in this way.
In a given month, the production records show:
(i). Production started in the process 50 batches of 1,000 lbs each.
(ii). Production completed and transferred to finished goods is 34,200 lbs.
(iii). There is no inventory of work-in-process at the beginning or end of the month.
Costs recorded during the month amounted to Rs. 45,000. Prepare the Process Account for the month and determine the cost per pound of finished product.
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