A Company operates several production processes involving the mixing of ingredie

Question

A Company operates several production processes involving the mixing of ingredients to produce bulk animal feed. One such product is mixed in two separate process operations The information below is of the costs incurred in, and output from Process 2 during the period just completed. The equipment is cleaned at the end of each period; hence there were no units in process at the beginning of the period. The following additional information is available for Process 2 (i) Transfer from Process 1: 112,000 kilos valued at $17.85 per kil

Explanation / Answer

Beggining units 0 Transferred out 1,04,200 Started intro production 112000 Normal spoilage 5600 Abnormal spoilage 600 Ending units 1,600 112000 1,12,000 Equivalent units Material Conversion Units transferred                                            A 1,04,200 1,04,200 Abnormal spoilage 600 600 Ending Units 1,600 1,600 Completion 100% 75% B 1600 1200 Total units 106400 106000 Cost per equivalent units Particulars Material Conversion cost total As at beginning 0 0 0 Added during the month 2394000 632400 3026400 Cost to be accounted for 2394000 632400 3026400 Total eqivalent units 106400 106000 Cost per equivalent unit 22.50 5.97 28.47 Cost per equivalent unit = Cost to be accounted for / Total equivalent units Cost of ending work in progress Conversion cost Particulars Material Total Ending units 1,600 1,600 1,600 Cost per equivalent units 22.50 5.97 28.47 Completion 100% 75% Total cost 36000 7159 43159 Cost of goods transferred Conversion cost Particulars Material Total Number of units 104200 104200 Cost per equivalent units 22.50 5.97 Total amount 2344500 621661 2966161 Abnormal loss Conversion cost Add Particulars Material Total Number of units 600 600 Cost per equivalent units 22.50 5.97 Total amount 13500 3580 17080 3026400

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