QUESTION 1

In a certain month, 2000 units were introduced into process 1. The normal loss was expected

to be 5% on inputs. At the end of the month, 1,400 units had been produced and transferred to

the next process. 460 units were uncompleted and 140 units had been scrapped. It was

established that uncompleted units had reached a stage in production as follows:

Material

60%

Labour

40%

Overheads

10%

The cost of the 2000 units introduced into process 1 was GH5,800.00

Materials introduced into the process amounted to GH1,440.00

Direct wages amounted to GH3,340.00

Production overhead incurred was GH1,670.00

Units scrapped realized GH1.00 each

The units scrapped have passed through the process, so were 100% completed as regards

materials, labour and overheads.

You are required to prepare:

i.Statement of Equivalent Units

ii.Statement of Cost

iii.The process 1 account and the abnormal loss account