Intermediate: Losses in process (weighted average)

A company operates expensive process plant to produce a single product from one process. At the beginning of October, 3400 completed units were still in the processing plant, awaiting transfer to finished stock. They were valued as follows:

36000 units were transferred to finished stock and 3200 units remained in work-in-progress at the end of October which were complete as to material and half-complete as to labour and production over¬ head. A loss of 1200 units, being normal, occurred during the process.
The average method of pricing is used.
You are required to

(a) prepare for the month of October, a statement (or statements) showing (i) production cost per unit in total and by element of cost;
(ii) the total cost of production transferred to finished stock;
(iii) the valuation of closing work-in-progress in total and by element of cost;
(15 marks)

(b) describe five of the characteristics which distinguish process costing from job costing

Transcribed Image Text:

() Direct material 25 500 10 200 Direct wages Production overhead 20 400 (200% of direct wages) During October, 37 000 further units were put into process and the following costs charged to the process: () Direct materials 276 340 Direct wages 112000 Production overhead 224 000