Fowl Limited [Q-6 Aut-12]

Work in Process account

Units Rs. Units Rs.
b/d [90 + 25] 15,000 115,000 Transfer out:
Material (W-1) 82,500 547,125 -X 50,000 500,000
Conversion - 228,875 -Y 25,000 250,000
NL [82,500 x 10%] 8,250 12,375
AL [12,500 - 8,250] 4,250 36,125
c/d 10,000 92,500
97,500 891,000 97,500 891,000

W-1 Units
Opening WIP 15,000
Input (balancing) 82,500
Closing WIP (10,000)
Actual loss (12,500)
Output 75,000

W-2
W-2.1 Equivalent production -------- Eq. units --------
Units % Material Conversion
Transferred units 75,000 100% 75,000 75,000
Abnormal loss: 4,250
Material 100% 4,250 -
Conversion 50% - 2,125
Closing WIP: 10,000
Material 100% 10,000 -
Conversion 75% - 7,500
[A] 89,250 84,625

W-2.2 Cost per unit ------------ Rs. ------------

Material Conversion
Opening WIP 90,000 25,000
Current period cost 547,125 228,875
Scrap value of NL [8,250 x 1.50] (12,375) -
[B] 624,750 253,875
Per unit cost [B / A] 7.00 3.00

W-2.3 Statement of evaluation Rs.

Cost of completed units [75,000 x (7 + 3)] 750,000
Allocated:
- X [750,000 x 50/75] 500,000
- Y [750,000 x 25/75] 250,000
Cost of AL:
Material [4,250 x 7] 29,750
Conversion [2,125 x 3] 6,375
36,125

Cost of closing WIP:

Material [10,000 x 7] 70,000
Conversion [7,500 x 3] 22,500
92,500