ECR Dec 07 Task 1.3

jewels.p

I am trying to do the Dec 07 Exam Paper and am stuck on Task 1.3b. I looked at this and dont have a clue!

I am finding W.I.P quite difficult to grasp. On W.I.P is the Direct Materials used always 100% and the labour part complete?

I printed a page off that Sandy Hood had done for "a cool cat" and thought I understood it from this but then looked at this question and was back to square one.

Anyone else struggling with this?

SandyHood

Task 1.3
(a) Calculate the total cost of direct labour for solvent S789 for November.
Normal time hours worked 260 hours
Overtime at time and a half worked 40 hours
Overtime at double time worked 30 hours
Total hours worked 330 hours
Normal time hourly rate £10 per hour

Total hours 330 x £10 = £3,300
extra half 40 hrs x £5 = £200
double hrs 30 hrs x £10 = £300

Total cost £3,800

(b) Opening work in progress Nil
Finished output to next process 7,000 litres
Closing work in progress 1,200 litres
Degree of completion – direct materials 100%
Degree of completion – direct labour 50%

Equivalent output = 7,000 litres + (50% x 1,200 litres) = 7,600
calculate the direct labour cost per litre of solvent S789 of the equivalent finished production.

£3,800/7,600 litres = £0.50 per litre

SandyHood

On W.I.P is the Direct Materials used always 100% and the labour part complete?

Generally but not necessarily

If you came into my kitchen 1 hr before lunch there might be chicken in the oven, so if I don't intend to add any more ingredients before serving it the material would be 100% complete, but the labour would be only 60% complete (I've prepared the chicken before cooking) but 40% of my work comes after it comes out cooked - carving etc

So that chicken (1 hr short of being cooked) is 100% complete for materials and 60% complete for labour.

Any help?

jewels.p

SandyHood wrote: »

On W.I.P is the Direct Materials used always 100% and the labour part complete?

Generally but not necessarily

If you came into my kitchen 1 hr before lunch there might be chicken in the oven, so if I don't intend to add any more ingredients before serving it the material would be 100% complete, but the labour would be only 60% complete (I've prepared the chicken before cooking) but 40% of my work comes after it comes out cooked - carving etc

So that chicken (1 hr short of being cooked) is 100% complete for materials and 60% complete for labour.

Any help?

As always you explained it brilliantly. Thanks for that