M and E Ltd produces paint product , which passes through three processes A, B, and C. during May 2019. The following took place during the production processes. Process A-data 10,000kgs of materials were put into the production process and each Kg was valued at Shs.6,000Direct labour of 8,000 labour hours were used and each hour was valued at Shs. 3,000Actual output turned out to be 8500 units while process loss was scrapped at Shs. 6,000 per unit and was paid for by cheque.Process B-data 3000kgs of materials were added to the production process and each Kg was valued at Shs. 7,000.Direct labour amounted to Shs. 14,000,000Actual output was 11,000 units and the process loss was scrapped at Shs. 8,000 per unit.Process C- dataAdditional materials totaling 1,000kgs valued at Shs. 5,000 per kg were introduced in the production process.Direct labour amounted to shs. 12,000,000Actual output was 11,500units while process loss was scrapped at Shs. 9,000 per unit.Additional informationOverheads were absorbed at 120% of direct labour.Normal loss was expected to be 8%, 6% and 3% respectively for process A, B and CAll process losses were scrapped and properly paid for.Required:Prepare the process accounts for the paint product and determine the product cost per unit

Sometimes, the product is manufactured by passing the raw material through various processes. For…

Answered: Process C- data Additional materials…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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M and E Ltd produces paint product , which passes through three processes A, B, and C. during May 2019. The following took place during the production processes.

Process A-data

10,000kgs of materials were put into the production process and each Kg was valued at Shs.6,000
Direct labour of 8,000 labour hours were used and each hour was valued at Shs. 3,000
Actual output turned out to be 8500 units while process loss was scrapped at Shs. 6,000 per unit and was paid for by cheque.

Process B-data

3000kgs of materials were added to the production process and each Kg was valued at Shs. 7,000.
Direct labour amounted to Shs. 14,000,000
Actual output was 11,000 units and the process loss was scrapped at Shs. 8,000 per unit.

Process C- data

Additional materials totaling 1,000kgs valued at Shs. 5,000 per kg were introduced in the production process.
Direct labour amounted to shs. 12,000,000
Actual output was 11,500units while process loss was scrapped at Shs. 9,000 per unit.

Additional information

Overheads were absorbed at 120% of direct labour.
Normal loss was expected to be 8%, 6% and 3% respectively for process A, B and C
All process losses were scrapped and properly paid for.

Required:

Prepare the process accounts for the paint product and determine the product cost per unit

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