Q-3 Aut-16 [SOLUTION]

Bela Enterprises
(a)
Statement of Equivalent Units
------------ Equivalent Units -----------
Output Total Units % complete Process I New material Conversion
Opening WIP: 5,000
Material 0% -
Conversion 15% 750
Started and Finished units 35,000 100% 35,000 35,000 35,000
Closing WIP: 4,000
Material 100% 4,000 4,000
Conversion 60% 2,400
Abnormal Loss (W-1): 1,900
Material 100% 1,900 1,900
Conversion 80% 1,520
Total Units 45,900 40,900 40,900 39,670

(b)(i) Cost of Finished Goods Rs.

Opening WIP:
b/f balance 2,000,000
New material -
Conversion [750 x 277.29 (W-3)] 207,968
2,207,968
Started and finished in the Period:
[35,000 x 951.86 (W-3)] 33,315,100
35,523,068

(ii) Closing WIP

Dept A [4,000 x 430.07 (W-3)] 1,720,280
New material [4,000 x 244.50 (W-3)] 978,000
Conversion [2,400 x 277.29 (W-3)] 665,496
3,363,776

(iii) Abnormal Loss

Dept A [1,900 x 430.07 (W-3)] 817,133
New material [1,900 x 244.50 (W-3)] 464,550
Conversion [1,520 x 277.29] 421,481
1,703,164
(c)
Entries Dr. Cr.
(i) Scrap inventory 410,000
WIP-2 410,000

(ii) Abnormal Loss 1,703,164

WIP-2 1,703,164

(iii) Scrap inventory [1,900 x 100] 190,000

P&L 1,513,164
Abnormal Loss 1,703,164

(iv) Cash [6,000 x 100] 600,000

Scrap inventory 600,000

Working - 1 Units
Opening WIP 5,000
Material Added 15,000
Received from Process 1 30,000
Closing WIP (4,000)
Normal Loss [W-2] (4,100)
Abnormal loss (bal.) (1,900)
Output 40,000

Working - 2
New material 15,000
Add: Received from Process 1 30,000
Less: Closing WIP (4,000)
Inspected Quantity 41,000
Normal Loss 4,100

Working - 3
Statement of Cost per Equivalent Units
Conversion
Process I Material Cost
Cost
Total cost for the period 18,000,000 10,000,000 11,000,000
Scrap value (410,000) - -
[4100 Kg x Rs.100/Kg] 17,590,000 10,000,000 11,000,000

Equivalent Units 40,900 40,900 39,670

Total
Cost Per Eq. Unit 430.07 244.50 277.29 951.86