. Smooth as Silk Ltd is a yoghurt manufacturer which uses process costing.

At the beginning of September Smooth as Silk Ltd has opening inventory of 500 units which are 60% cmplete and cost 2,800

Costs incurred in the period are:

Material (2,500 units) 13,200 Labour 6,600 Production overheads 6,60026,400

Closing inventory is 300 units which are 80%complete.

Smooth as Silk Ltd use FIFO to value inventory.

Required:

a) Calculate the cost per equivalent unit for the period.

[4 marks]

b) Prepare the process account for the period.

[8 marks]

c) Explain which other method of inventory valuation may be appropriate and how it may differ from FIFO.