Q-2

COMPUTATION OF OMPLETED AND TRANSFERRED OUT UNITS

Particulars Units
Unit of Opening Work in Process (WIP) 5,000
Add: Units placed in production or WIP 13,000
Total units WIP 18,000
Less: Ending Work in Process (WIP) (3,000)
Completed and Transferred out 15,000

EQUIVALENT PRODUCTION UNITS (EPU)

WIP Direct Conversion Cost

Particulars Material Direct Labour FOH
Units %
Units Units Units
Units Completed and transferred out 15,000 15,000 15,000
Add: Ending Work in Process
Direct Material (units x% of completion) 3000 60% 1,800
Direct Labour (units x% of completion) 3000 80% 2,400
FOH (units x% of completion) 3000 80% 2,400
16,800 17,400 17,400
Less: Opening Work in Process
Material (units x% of completion) 5000 40% (2,000)
Labour (units x% of completion) 5000 60% (3,000)
FOH (units x% of completion) 5000 60% (3,000)
Total Equivalent Production Units 14,800 14,400 14,400

COMPUTATION OF COST PER UNIT

Particulars COST % Actual Cost EPU Per unit

Direct Material Cost 74,000 100% 74,000 14,800 5.00
Direct Labour Cost 57,600 100% 57,600 14,400 4.00
FOH Cost 43,200 100% 43,200 14,400 3.00
Total unit cost 12.00

COMPUTATION OF COST OF UNITS COMPLETED & TRANSFERRED OUT

WIP
Particulars Per unit Amount
Units %
Opening Cost of Units 30,000
Add: Cost Incurred During This Period
Direct Material 5,000 60% 5.00 15,000
Direct Labour 5,000 40% 4.00 8,000
FOH 5,000 40% 3.00 6,000
Total Cost from Opening WIP 59,000
Add: Cost From Current Production
(Units Completed - Opening WIP) X Total unit cost 10,000 12.00 120,000
Cost of units Completed/ Finished Goods 179,000

COMPUTATION OF ENDING INVENTORY OF WIP

WIP
Particulars Per unit Amount
Units %
Direct Material 3000 60% 5.00 9,000.00
Direct Labour 3000 80% 4.00 9,600.00
FOH 3000 80% 3.00 7,200.00
Total Cost of Ending Inventory of WIP 25,800.00
Q-3
EQUIVALENT PRODUCTION UNITS (EPU)

WIP
Particulars Process A Process B FOH
Units %
Units
Units Completed and transferred out 10,000 8,000
Add: Ending Work in Process
(Ending WIP units 1/4 of 2,000) 2000 25% 500
10,000 8,500 -
Less: Opening Work in Process
(Opening WIP units 1/3 of 3,000) 3000 33% (1,000)
Total Equivalent Production Units 9,000 8,500 -

COMPUTATION OF COST PER UNIT

EPU Per unit

Particulars Process A Process B
Process A Process B Process A Process B
Cost From preceding department - 16.00
Add: Cost added in this department
Material Cost 63,000 34,000 9,000 8,500 7.00 4.00
Labour Cost 54,000 68,000 9,000 8,500 6.00 8.00
FOH Cost (54000 X 50%) & 100% of DL 27,000 68,000 9,000 8,500 3.00 8.00
Total unit cost 16.00 36.00

COMPUTATION OF COST OF UNITS COMPLETED & TRANSFERRED OUT

WIP
Particulars
Process A Process-B
Opening Cost of WIP 15,000 -
Add: Cost Incurred During This Period
Direct Material (3,000 X 2/3 X 7) 14,000 -
Direct Labour (3,000 X 2/3 X 6) 12,000 -
FOH (3,000 X 2/3 X 3) 6,000 -
Total Cost from Opening WIP 47,000 -
Add: Cost From Current Production
(Units Completed - Opening WIP) X Total unit cost 112,000 288,000
Cost of units Completed/ Finished Goods 159,000 288,000
Q-4
COMPUTATION OF OMPLETED AND TRANSFERRED OUT UNITS

Particulars Units
Unit of Opening Work in Process (WIP) 40,000
Add: Units placed in production or WIP 140,000
Total units WIP 180,000
Less: Ending Work in Process (WIP) (50,000)
Completed and Transferred out 130,000

EQUIVALENT PRODUCTION UNITS (EPU)

WIP Direct Conversion Cost

Particulars Material Direct Labour FOH
Units %
Units Units Units
Units Completed and transferred out 130,000 130,000 130,000
Add: Ending Work in Process
Direct Material (units x% of completion) 50,000 100% 50,000
Direct Labour (units x% of completion) 50,000 50% 25,000
FOH (units x% of completion) 50,000 50% 25,000
180,000 155,000 155,000
Less: Opening Work in Process
Material (units x% of completion) 40,000 100% (40,000)
Labour (units x% of completion) 40,000 75% (30,000)
FOH (units x% of completion) 40,000 75% (30,000)
Total Equivalent Production Units 140,000 125,000 125,000

COMPUTATION OF COST PER UNIT

Particulars COST % Actual Cost EPU Per unit

Cost From preceding department 700,000 0% 700,000 140,000 5.00
Add: Cost added in this department
Direct Material Cost 280,000 0% 280,000 140,000 2.00
Direct Labour Cost 125,000 0% 125,000 125,000 1.00
FOH Cost 375,000 0% 375,000 125,000 3.00
Total unit cost 11.00

COMPUTATION OF COST OF UNITS COMPLETED & TRANSFERRED OUT

WIP
Particulars Per unit Amount
Units %
Opening Cost of WIP 387,000
Add: Cost Incurred During This Period
Direct Material 40,000 0% 2.00 -
Direct Labour 40,000 25% 1.00 10,000
FOH 40,000 25% 3.00 30,000
Total Cost from Opening WIP 427,000
Add: Cost From Current Production
(Units Completed - Opening WIP) X Total unit cost 90,000 11.00 990,000
Cost of units Completed/ Finished Goods 1,417,000

COMPUTATION OF ENDING INVENTORY OF WIP

WIP
Particulars Per unit Amount
Units %
Cost from preceding Department 50,000 100% 5.00 250,000.00
Direct Material 50,000 100% 2.00 100,000.00
Direct Labour 50,000 50% 1.00 25,000.00
FOH 50,000 50% 3.00 75,000.00
Total Cost of Ending Inventory of WIP 200,000.00

General Entries
Date Particulars Debit Credit
1 Work in Process (Process No.3) 700,000
Work in Process (Process No.2) 700,000
(Transfer of 140,000 units from P-2 to P-3)
2 Work in Process (Process No.3) 780,000
Material 280,000
Payroll 125,000
FOH Applied 375,000
(Cost added in process 3 during the period)
3 Finished Goods 1,417,000
Work in Process (Process No.3) 1,417,000
(Transfer of 130,000 units from P-3 to ware house)
Q-7
EQUIVALENT PRODUCTION UNITS (EPU)

WIP
Particulars Process A Process B
Units %
Units Completed and transferred out 25,000 21,000
Add: Ending Work in Process
(Ending WIP units x% of completion)
(30,000-25,000) 5000 60% 3,000
(25,000-21,000) 4000 60% 2,400
28,000 23,400
Less: Opening Work in Process
(Ending WIP units x% of completion) 0 0% - -
Total Equivalent Production Units 28,000 23,400

COMPUTATION OF COST PER UNIT

EPU Per unit

Particulars Dept. A Dept. B
Dept. A Dept. B Dept. A Dept. B
Cost From preceding department - 2.00
Add: Cost added in this department
Material Cost 22,400 9,360 28,000 23,400 0.80 0.40
Labour Cost 19,600 14,040 28,000 23,400 0.70 0.60
FOH Cost (54000 X 50%) & 100% of DL 14,000 28,080 28,000 23,400 0.50 1.20
Total unit cost 2.00 4.20

General Entries
Date Particulars Debit Credit
1 Work in Process -Dept. B 50,000
Work in Process -Dept. A (25,000 X 2) 50,000
(25,000 units completed and transferred to Dept.-B)
2 Finished Goods 88,200
Work in Process -Dept. B (21,000 X 4.20) 88,200
(Transfer of 19,000 units from WIP to Finished goods)