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M/s. XYZ and company follows process costing in their factory. Three types of material are used that is Material A, B and C. Material A

M/s. XYZ and company follows process costing in their factory. Three types of material are used that is Material A, B and C. Material A and B are added in department 1 and Material C is added in department 2 after inspection which is taken place @ 70% completion. In department 1 material A is added in the start of process while material B is added when unit is 80% complete after inspection. Conversion costs flow as per continuity of completion stages. In department 1 50000 units were started in current period 38000 of which were completed and transferred to department 2. 7000 units were present in WIP which were 85% complete. 5% of good outputs considered as normal loss. During the period following costs were incurred in fist department.

Direct material A 800000

Direct material B 600000

D. Labor 400000

FOH is applied @ 120% of direct labor cost.

In Department 2, 38000 units were received 32000 of which were completed and transferred out. 5000 units were WIP which were 50% complete. 1% of good output is considered as normal loss in this department. Following costs were incurred in second department.

Material C 500000

D. labor 800000

FOH is applied @ 80% of prime cost.

Required: - CPR for department 1 as well as department 2

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