Model: Equivalent production abnormal loss
During the month of September, 5000 units were introduced into Process I. The cost of 5000 units was Rs. 29,000. At the end of the month, 3,750 units had been produced and transferred to Process II. About 900 units were still in process and 350 units had been scrapped. A normal loss of 5% on input is allowed. It was estimated that the WIP units had reached a stage in the production as follows:
Material: 75% completed
Labour: 50% completed
Overhead: 50% completed
The total cost incurred, in addition to 5,000 units were:
|
Direct materials introduced during the process |
7,700 |
|
Direct wages |
17,200 |
|
Overheads |
8,600 |
|
Units scrapped realized (each) |
2.00 |
The units scrapped have passed through the process and so were 100% completed in respect of material, labour and overhead.
You are required to prepare all the necessary accounts.