(a) Define the term equivalent production and state when the principle is used.

(b) During May 1991, M Wurzel \& Co. Limited's output was 4,000 finished items plus 600 partly finished items. There was no work in progress on 1 May 19 X1.

Total cost \((£)\)
WIP degree of completion \(\%\)
\begin{tabular}{rccc}
Materials & Labour & Overheads & Total \\
\hline 8,172 & 7,120 & 5,196 & 20,488 \\
90 & -75 & 55 & -
\end{tabular}
Calculate for the month of May 19X1:
(i) the total equivalent production for each cost element;
(ii) the cost per complete unit;
(iii) the value of the work in progress.

Transcribed Image Text:

Materials Labour Overheads Total Total cost () 8,172 7,120 5,196 20,488 WIP degree of completion % 90 75 55