Question 1(Marks 10)

Axe Limited manufactures a single product in two successive processes.

The following information relates to the period ended November 30, 2019

Process 1.

Input

Direct material 15,000 Kgs @ Rs 16 per kilo

Direct Labour 82,000

Factory overheads are absorbed at 22.75% of material cost

Output

11,500 KGS transferred to process 2

There is a normal loss in process of 10% of input

There was no opening or closing wip in process 1

Process 2

Input

11,500 Kgs from process 1

Added material2000 kgs @ 25

Direct Labour 29,050

Factory overhead were Rs 36,520

Output

10,000 Kgs were transferred to finished stock

At the end of the month 1,500 kg remained in process these were complete with respect to materials but only 60% complete with respect to conversion costs

There was no opening work in progress in process 2.

Required:

Prepare process 1 & 2 accounts clearly showing transferred value and closing WIP