Q-4 Aut-21 [SOLUTION]

Process II Account
Units Rs. 000 Units Rs. 000
b/d 7,500 3,000 Transfer out 60,000 36,228
Transfer in 45,000 27,000 Normal loss [6,615 x 200] 6,615 1,323
Material 22,500 11,250 c/d 9,000 5,581
Conversion - 1,500
Abnormal gain 615 382
75,615 43,132 75,615 43,132

W-1 Quantity schedule Units

Opening WIP [5,250 + 2,250] 7,500
Transfer in 45,000
New material 22,500
Closing WIP [5,400 + 3,600] (9,000)
Normal Loss [W-1.1] (6,615)
Abnormal gain (bal.) 615
Output 60,000

W-1.1 Normal loss

Transfer in 45,000
New material 22,500
Opening WIP 2,250
Closing WIP (3,600)
Inspected Quantity 66,150
Normal Loss [66,150 x 10%] 6,615

W-2 Equivalent Units ------------ Equivalent Units -----------

Units % Process I New material Conversion
Opening WIP:
- Conversion 5,250 20% - - 1,050
- Conversion 2,250 60% - - 1,350

Started & Finished units 52,500 100% 52,500 52,500 52,500

[60,000 - 7,500]

Closing WIP:
- Process I 9,000 100% 9,000 - -
- New material 9,000 100% - 9,000 -
- Conversion 5,400 70% - - 3,780
- Conversion 3,600 30% - - 1,080

Abnormal gain (W-1):

- Process I 615 100% (615) - -
- New material 615 100% - (615) -
- Conversion 615 60% - - (369)
Total Units 60,885 60,885 59,391
W-3 Cost per unit Process I Material Conversion
-------------------- Rs. ----------------------
Total cost for the period 27,000,000 11,250,000 1,500,000
Normal loss [6,615 x 200] (1,323,000) - -
25,677,000 11,250,000 1,500,000

Equivalent Units 60,885 60,885 59,391

Total
Cost per unit (Rs.) 421.73 184.77 25.26 631.76

W-4 Cost of units

Cost of Finished Goods Rs.
Opening WIP:
b/f balance 3,000,000
Conversion [(1,050 + 1,350) x 25.26 (W-3)] 60,624
3,060,624
Started and finished in the Period:
[52,500 x 631.76 (W-3)] 33,167,400
36,228,024

Closing WIP
Process I [9,000 x 421.73 (W-3)] 3,795,570
New material [9,000 x 184.77 (W-3)] 1,662,930
Conversion [(3,780 + 1,080) x 25.26 (W-3)] 122,764
5,581,264

Abnormal gain
Process I [615 x 421.73 (W-3)] 259,364
New material [615 x 184.77 (W-3)] 113,634
Conversion [369 x 25.26 (W-3)] 9,321
382,318