Intermediate: Losses in process (weighted average) A company operates expensive process plant to produce a single product
Question:
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.
During October, 37 000 further units were put into process and the following costs charged to the process:
36 000 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 overhead. A Joss of 1200 units, being normal, occurred during the process.
The average method of pricing is used.
You are required to
(a) prepare for lhe month of October, a statement (or statements) showing m 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;
(b) describe five of the characteristics which distinguish process costing from Job costing.
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