Intermediate: Equivalent production and losses in process Industrial Solvents Limited mixes together three chemicals - A, B and C - in the ratio 3:2:1 to produce Allklean, a specialised anti-static fluid. The chemicals cost £8, £6 and £3.90 per litre respectively. In a period, 12000 litres in total were input to the mixing process. The normal process loss is 5% of input and in the period there was an abnormal loss of 100 litres whilst the completed production was 9500 litres.

There was no opening work-in-progress (WIP) and the closing WIP was 100% complete for materials and 40% complete for labour and over¬ heads. Labour and overheads were £41 280 in total for the period. Materials lost in production are scrapped.

Required:

(a) Calculate the volume of closing WIP.

(3 marks)

(b) Prepare the mixing process account for the period, showing clearly volumes and values.

(9 marks)

(c) Briefly explain what changes would be neces¬

sary in your account if an abnormal gain were achieved in a period.