Intermediate: AFO method No Strings Ltd makes a single product, and uses a process costing system . The following data relate to the month of June 1980:

Direct materials are used at the first stage of the production process. whereas the labour cost Is incurred evenly throughout that process. Overhead is charged to products at a rate of £2 per £1 of direct labour cost.
You are required to calculate in respect of June 1980:
(i) the number of equivalent units of product made in the month; (2 marks)
(ii) the number of units of product started in the month ;
(2 marks)
(iii) assuming a FIFO flow of costs, the average variable cost of each unit of product which is both started and finished in the month ; (2 marks)
(iv) assuming a FIFO flow of costs the total cost (including overheads) of the units of product completed during the month, (2 marks)
(v) assuming a FIFO flow of costs, the cost of the closing work in process, showing the total and the separate amounts for direct labour, direct materials and overheads

Normally no losses are expected in process 4.
The company operates the first in, first out method of charg 1ng opening stock to production and, at the beginning of May 1982, the value of the opening stock in process 4 was £16 400 .

Normally a loss of 10% of input is expected in process 5; all losses may be sold as scrap at £2 per kg .
Required:

(a) Calculate the total cost of the 8000 kg of chemical transferred from process 4to process 5 during May 1982.
(5 marks)

(b) Calculate the total cost, incurred by process 4 during May 1982, for each of the followmg:
(i) materials transferred from process 3;
(ii) process 4 materials ;
(iii) process 4 conversion costs . (10 marks)

(c) Prepare the process 5 account for May 1982.

Opening work in process Closing work in process Product completed during June 3200 units, each one-half completed 3600 units, each one-third completed 4000 units Opening work in process (in ): Direct labour Direct materials Overheads 3200 12800 6400 Variable costs incurred during June 1980 (in ): Direct labour 8820 Direct materials 15400