Unit 6  Work in Progress & Process Accounts
haighston
Registered Posts: 2 New contributor ?
Hi,
Anyone able to help with the following?
The process comprises of 3 stages: grinding, mixing & packing.
The information for the month is...
Inputs into grinding cost centre are:
Raw materials 1000 tonnes @ £70/tonne
Direct Labour 475 hours @ £8/hour
Process Overheads £17500
Outputs from grinding transfered to mixinng stage 940 tonnes
W.I.P 60 tonnes which is 100% complete materials, 50% complete labour & overhead.
Can you draft the process account for grinding for the month and value the W.I.P?
So far im having little success at matching any sort of answer i get to the answer booklet!
INPUT
Materials  1000 units  £70000
Labour  £3800
Overheads  £17500
Any help is appreciated...Thanks :thumbup:
Anyone able to help with the following?
The process comprises of 3 stages: grinding, mixing & packing.
The information for the month is...
Inputs into grinding cost centre are:
Raw materials 1000 tonnes @ £70/tonne
Direct Labour 475 hours @ £8/hour
Process Overheads £17500
Outputs from grinding transfered to mixinng stage 940 tonnes
W.I.P 60 tonnes which is 100% complete materials, 50% complete labour & overhead.
Can you draft the process account for grinding for the month and value the W.I.P?
So far im having little success at matching any sort of answer i get to the answer booklet!
INPUT
Materials  1000 units  £70000
Labour  £3800
Overheads  £17500
Any help is appreciated...Thanks :thumbup:
0
Comments

This is the question on Equivalent Unit, to work out how much is the work in progress on the shop floor is worth.
To understand equivalent unit concept:
Suppose that you have 2 children and you have 3 bars of Cadbury chocolate. 1 bar a whole= 100% 2nd bar is ¾ = 75% and the 3rd bar is a ¼= 25%
How will you share the 3 bars of chocolate equally among your
Answer 1+3/4+1/4 = 2 divide by 2 = 1 whole bar of chocolate each.
Therefore one child will receive 1 whole bar while the other child will receive 2 partial bars.
Similarly
…………………………………………units …………………Materials………………Labour………….Overheads
………………………………………………………………………………………………….485 hrs @£8 p/hr
Does not sound right……………………………………………………………………………………………..£17,500
………………………….....…………………………………………./Units…………………..Units………………….Units
Total..................................1000……………….…£70,000…………..……£3,880……………..£17,460
% completed Units.……….....……940..……100%.......940 units….100%...940 unit...100%....940 units
% partial Equivalent units….....60..………100%........60 Units……50%......30 units…50%......30units
Total Equivalent units……………...……………...…………1000 Units……………..970units…………..970units
Cost per Equivalent unit………………………...………...£70.00…………………...£4.00..................£18.00
Fully completed unit costs…940 units………...…..£65800………………...£3,760…………………£16,920 (86,480)
wip costs………………………..…60 units………...…….£4200.(30 units)……..£120…(30 units)…..£540 (£4,860)
Total………………………………………………………....……..£70,000…………………..£3,880…………………£17,460 (91,340)0 
I agree with Visha
I had the benefit of a spreadsheet so I was able to use unrounded cost per equivalent unit figures, but I have a question.
I saw the line withDoes not sound right
and £17,460 rather than £17,500 overhead?0 
if you divide (475*8) 3800= labour BY 970 the cost per unit comes to £3.92
and £17500 overheads by 970 it comes to £18.04
My experience has been that the examples in the text books or generally in the exam papers, the cost of the units will be either a whole number or with a sensible decimal number such as £0.75 or £0.25
if the charge had been £4.00 per unit then the costs would have been £3880 or 485 hrs at £8
similarly the overhead charge of £18 per unit comes to £174600
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