Intermediate: Losses in process (FIFO and weighted average methods)

A company produces a single product from one of its manufacturing processes. The following infor¬ mation of process inputs, outputs and work in process relates to the most recently completed period:

The opening and closing work in process are respectively 60% and 50% complete as to conver¬ sion costs. Losses occur at the beginning of the process and have a scrap value of £0.45 per kg.
The opening work in process included raw material costs of £56420 and conversion costs of £30 597. Costs incurred during the period were:

Required:

(a) Calculate the unit costs of production (£ per kg to four decimal places) using:
(i) the weighted average method of valu¬ ation and assuming that all losses are treated as normal;
(ii) the FIFO method of valuation and assuming that normal losses are 5% of materials input. (13 marks)

(b) Prepare the process account for situation (a)
(ii) above. (6 marks)

(c) Distinguish between:
(i) joint products, and (ii) by-products and contrast their treatment in process accounts.

kg Opening work in process Materials input Output completed 21 700 105 600 92 400 Closing work in process 28 200