Process Costing: Equivalent Production

1.

Input 2,000 units

Output 1,800 units

Closing WIP 200 units
Degree of completion
Materials 100%
Labour 75 %
Overheads 50 %
Process costs
Materials Rs.20,000
Labour Rs. 13,650
Overheads Rs. 6,650
Find out:

a. Equivalent production
b. Cost per unit of Equivalent Production
Prepare the process account assuming that there is no opening work in process or process loss

2. 40,000 units were introduced into Process A during the recently concluded month. The
process costs were:

Direct materials Rs. 302,000

Direct labor 207,000

Factory wages 50% of direct wages

The normal loss was estimated at 10 % of input. At the end of the month, 32,000 units were
produced and transferred to Process B. 5,000 units had been scrapped (scrapped units were
completely processed and realized Rs. 5 per unit), and 3,000 units were incomplete, and the
stage of completion of these units was estimated to be: Materials 75 %, Labor 50 % and
Overheads 50 %.

Compute a. Equivalent production, b. Cost per unit, and c. Value of output