Managerial Accounting

How do we value the finished goods and closing WIP using the following information if the entity uses weighted average cost method of valuation Process Account Units Rs Units IRS Opening WIP 300 8001 Materials 700 5,400 Finished Goods 800 Labour & overheads 2,850 Closing WIP 200 1,000 9,050 1,000 Additional information i Closing WIP is 100% complete in terms of material ii Closing WIP is 25% complete in terms of labour & overheads iii Total cost Opening WIP consists Rs 550 direct material and Rs 250 labour and overheads. Step 1 Determine output and losses i. Determine expected output ii. Calculate normal loss, abnormal loss/gain iii. Calculate equivalent units when WIP presents Step 2 Calculate cost per unit of output, losses and WIP Step 3 Calculate total cost of output, losses and WIP Step 4 Complete accounts i. Process accounts ii. Abnormal loss accounts iii. Abnormal gain accounts iv. Normal loss/ scrap account