Further Exercises A plastic manufacturing firm undertakes production of two products in two unrelated processes: Process 1 has a normal wastage of 8% which can be sold as scrap at N20 per kg. You are given the following information: Input (2,500 kg) N170/kg Labour & overheads (conversion cost) $135,000 Actual output 2,250 Further Exercises... Cont'd Process 2 has the following information: Input Conversion cost Actual output Normal loss Scrap value 20,000 units at $14.50/unit N103,000 18,500 units 10% N13 per unit Required: Show the computation for unit cost and the relevant process accounts for each process. 2. Process Costing with Closing WIP Where a portion of the output from a process is only partially complete at the end of a period, the incomplete production is Units (kg) N Units (kg) N Input (@ N70 per unit) 2,500 N175,000 Normal wastage 200 N4,000 Labour & overheads 35,000 (8% of input 2,500 x N20 per kg) (conversion cost) Transfer to Process 2-output(WN-2) 2,250 201522 Abnormal wastage(WN 1) 50 4,478 2,500 N210,000 2,500 N210,000 = (Total cost - value of normal wastage)/(Total input units - units of normal wastage) Per unit cost in process 1 = (N210,000 -N4,000)/(2,500 - 200) = N89.56 Value of abnormal wastage in process 1(WN-1) = Units of abnormal eastage x per unit cost in process 1 = 50 units x N89.56 = N4,478 Value of Actual ouput from process 1 (WN-2) = Units of Actual output x per unit cost in ess 1 2,250 units x N89.56 22 Process 2 Account Units Units (kg) N (kg) N Tranfer from Process 1 2.250 N201,522 Nor wastage 2.225 N6,675 Input (@N4.50 per unit) 3% of input 22,250) per unit) 20,000 90,000 Transfer to Finished Conversion cost 103,0 stock(WN-4) 500 358,310 Abnormal wastage(WN-3) 1,52 29,537 22,250 N394,522 22,250 N394,522 = (Total cost - value of normal wastage)(Total input units - units of normal wastage) Per unit cost in process 2 = (N394,522 - N6,675)/(22,250 - 2,225) = N387,847/20,025 = N19.368 Value of abnormal wastage in process 2(WN-3) = Units of abnormal wastage x per unit cost in process = 1,525 units x N19.368 = N29,537 Value of Finished output (WN-4) = Units of finished output x per unit cost in process 2 = 18,500 units x N19.368 = N358,310