A manufacturing company makes a product by two processes and the data below relate to the second process for the month of April.

A work-in-progress balance of 1 200 units brought forward from March was valued, in cost, as follows:

During April, 4 000 units were transferred from the first process to the second process at a cost of £7.50 each, this input being treated as direct material within the second process.
Other costs incurred by the second process were:

3 200 completed units were transferred to finished goods store. A loss of 520 units, being normal, occurred during the process. The average method of pricing is used.
Work-in-progress at the end of April consisted of 500 completed units awaiting transfer to the finished goods store and a balance of unfinished units which were complete as regards direct material and 50% complete as regards direct wages and production overhead.
Required:

(a) prepare for the month of April the account for the second process;

(b) present a statement for management setting out the:
(i) cost per unit of the finished product, by element of cost and total;
(ii) cost of production transferred to finished goods;
(iii) cost of production of completed units awaiting transfer to finished goods;
(iv) cost of uncompleted units in closing work-in-progress, by element of cost and in total.

Transcribed Image Text:

Direct materials, complete Direct wages, 60% complete Production overhead, 60% complete 10 800 6 840 7 200