1ntermediate: Losses in process (weighted average)

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

A work 1n progress balance of 1200 units brought forward from March was valued, at cost, as follows:

During April, 4000 units were transferred from the first process to the second process at a cost of £7.50 each, this 1nput being treated as direct material within the seoond process.
Other costs incurred by the second process were:

3200 completed umts were transferred to ffnished gaoos store.
A loss of 520 units, being normal, occurred during the process. The average method of pric1ng rs used.
Work in progress at the end of April consists 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.
You are required to:

(a) prepare for the month of April the account for the second process; (14 marks)

(b) present a statement for management setting out the:
(i) cost per unit of the finished product. by element of cost and tolal;
(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 10800 6840 7200