ECR Exam Dec 2007 Q 1.3 - work in progress

emmag

Help!

In the previous question you are asked to work out the total direct labour cost which I understand and got £3,800.

Then the additional data is:-

Opening work in progress Nil
Finished output to next process 7,000
Closing Work in progress 1,200
Degree of completetion - direct materials 100%
Degree of completetion - direct labour 50%

I've got the answer of £0.50 but I don't understand it. Why is the 50% bit of information used? What does the 100% mean?

rachy1975

emmag wrote: »

Help!

In the previous question you are asked to work out the total direct labour cost which I understand and got £3,800.

Then the additional data is:-

Opening work in progress Nil
Finished output to next process 7,000
Closing Work in progress 1,200
Degree of completetion - direct materials 100%
Degree of completetion - direct labour 50%

I've got the answer of £0.50 but I don't understand it. Why is the 50% bit of information used? What does the 100% mean?

the 50% is your closing work in process so 50% of 1200 is added onto your finished work. 100% is just telling you that all the material is complete but that part of the process is not finished as only 50% of the labour process is finished

lori

divide the 3,800 by 7600 = .50p

100% finished goods = 7000 complete to next process
50% mean half complete closing work in progess = 1200/2(eg 50%)
gives you the 7600
think is right
lori:001_smile:

A-Vic

lori wrote: »

divide the 3,800 by 7600 = .50p

100% finished goods = 7000 complete to next process
50% mean half complete closing work in progess = 1200/2(eg 50%)
gives you the 7600
think is right
lori:001_smile:

Looks right to me :thumbup1: