The opening inventory of a process is 40,000 units which are deemed 75% completed with respect...

  

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The opening inventory of a process is 40,000 units which are deemed 75% completed with respect to material and 50% completed with respect to direct labour and overheads. Opening material cost is $300,000, while direct labour and production overheads are $500,000 and $1,500,000 respectively. During the period 60,000 units were started. Material cost for the period was $600,000. Meanwhile, direct labour and production overheads incurred were $1,000,000 and $1,100,000 respectively. It was ascertained that there were 20,000 units at the end of the period which are 50% completed for materials and 10% complete for labour and production overheads. Required: a Using the Weighted Average cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost. 110.5 marks] b. Using the FIFO cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost. [5.5 marks] The opening inventory of a process is 40,000 units which are deemed 75% completed with respect to material and 50% completed with respect to direct labour and overheads. Opening material cost is $300,000, while direct labour and production overheads are $500,000 and $1,500,000 respectively. During the period 60,000 units were started. Material cost for the period was $600,000. Meanwhile, direct labour and production overheads incurred were $1,000,000 and $1,100,000 respectively. It was ascertained that there were 20,000 units at the end of the period which are 50% completed for materials and 10% complete for labour and production overheads. Required: a Using the Weighted Average cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost. 110.5 marks] b. Using the FIFO cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost. [5.5 marks]

Answer rating: 100% (QA)

Solution a b A using the weighted Averige cast flow Material ... View the full answer