A company follows process costing and manufactures a product in one process. The work-in-progress atthe end of each month is valued according to FIFO method. At the beginning of the month of January,the inventory of work-in- progress showed the 400 units, 40% completed, valued at RO 8000.In the month of January 2600 units amounting to RO 68,500 were introduced into the process. Wagesand overheads amounted to RO 79,200 and RO 21,120, respectively. Finished production taken intostock in the month was 2,500 units. At the end of the month, the work-in-progress inventory was 500units, 80% complete as regards materials and 60% complete as regards labor and overhead. You arerequired to compute equivalent production and prepare process account.Prepare (a) Statement of Equivalent ProductionOutputInput UnitsEquivalent UnitsItemsUnitsQtyQty%Qty%b) Statement of CostEquivalentUnitsCost per unitElement of Cost Costc.) statement of valuationMaterialLabour,Overheads TotalEinishedGoodsClosing WIP

Statement of Equivalent production Statement of Cost Statement of Valuation

Prepare (a) Statement of Equivalent Production Equivalent Units Input Units Output Items Units Qty Qty Qty b) Statement of Cost Equivalent Cost per unit Units Element of Cost Cost c.) statement of valuation Material Labour Overheads Total Einished Goods Closing WIP

Prepare (a) Statement of Equivalent Production Equivalent Units Input Units Output Items Units Qty Qty Qty b) Statement of Cost Equivalent Cost per unit Units Element of Cost Cost c.) statement of valuation Material Labour Overheads Total Einished Goods Closing WIP

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company follows process costing and manufactures a product in one process. The work-in-progress at
the end of each month is valued according to FIFO method. At the beginning of the month of January,
the inventory of work-in- progress showed the 400 units, 40% completed, valued at RO 8000.
In the month of January 2600 units amounting to RO 68,500 were introduced into the process. Wages
and overheads amounted to RO 79,200 and RO 21,120, respectively. Finished production taken into
stock in the month was 2,500 units. At the end of the month, the work-in-progress inventory was 500
units, 80% complete as regards materials and 60% complete as regards labor and overhead. You are
required to compute equivalent production and prepare process account.
Prepare (a) Statement of Equivalent Production
Output
Input Units
Equivalent Units
Items
Units
Qty
Qty
%
Qty
%
b) Statement of Cost
Equivalent
Units
Cost per unit
Element of Cost Cost
c.) statement of valuation
Material
Labour,
Overheads Total
Einished
Goods
Closing WIP

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Subject: accounting