1.

Abnormal loss

Normal loss (units): 20000kg x 5% = 1000kg

Expected output (units) = 19000kg (20-1)

Average unit cost: (26000+12000+5700): $43700/19000kg = $2.3/ kg

Abnormal loss ($): 19000kg(expected) – 18800kg(actual): 200kg x $2.3 = $460

2. Unit valuation

Normal loss(units): 2000 x 5% = 100

expected output(units): 2000 – 100 = 1900

Unit cost: [($9000material + $13340conversion) - $300 scrap value of normal loss] / 1900 units =
=$11.6/ unit

3. Valuation of completed units

WIP EU: 3000 x 60% = 180 EU

Current EU: (2000 – 180) = 1820 EU (note: deduct opening EU because of FIFO)

Cost of current EU: 1820 x $10 = $18200

Cost of WIP: $18200 + $1710 = $19910 (note: add the value of opening WIP to current cost in one
block)

4. Percentage degree of completion of closing WIP

Cost of EU: $480000/ 1000units = $48

WIP EU: $144000/ $48 = 3000units

Degree of completion: 3000units/ 4000units = 75%

5. Units of output and closing WIP (FIFO)

a) Units: 14000complete – 2000opening – 3000closing = 15000input units

b) Value of closing WIP under FIFO:

 Material cost per unit: $51000/ 15000 = $3.40

 Conversion cost per EU: [14000 – (2000 x 60%fifo!)] + (3000 x 30%) = 13700 EU ->
$193170/13700EU = $14.10
 Value of closing WIP:
o Material: 3000 x $3.40 = $10200
o Conversion: (3000 x 30%)900 x $14.10 = $12690
o Mat + Conv = $22890

6. Closing WIP and completed units (no losses)

a) Cost of closing WIP:

Units: 200opening + 1000input – 1040completed = 160closing WIP

(160 X $20) x 40% = $1280

b) Cost of completed units:

EU of current cost: 1040 – (200 x 40%fifo!) = 960

960 x $20 = $19200

$19200 + $1530fifo = $20730

7. Loss in process (weighted average)

Expected production: 36000input – 8000closing WIP = 28000kg

Normal loss: 28000kg x 10% = 2800kg

Abnormal loss: 3600actual – 2800normal = 800kg

Actual completed production: 28000 – 3600 = 24400kg

input cost complete abnormal closing Total EU cost/ kg closing

$ d units loss WIP $ WIP $
Previous 166000 24400 800 8000 33200 5 40000
Conversion 73000 24400 800 4000 29200 2.50 10000
239000 (50%!) 7.50 50000

Completed units: 24400kg x $7.50 = $183000

Abnormal loss: 800kg x $7.50 = $6000

Closing WIP: $50000

Total: $239000

Process account ($)

Previous 166000 Completed 183000
Conversion 73000 Abnormal loss 6000
Closing WIP 50000
239000 239000
8. Equivalent product with losses (FIFO)

Normal loss: 12500units x 8% = 1000units

Scrap value of normal loss: 1000 x $3 = $3000 (deduct from material costs incurred at $99600)*

Expected output: 2000opening WIP + 12500input – 1000normal loss = 13500units

Actual output: 10000completed + 3000closing WIP = 13000units

Abnormal loss: 13500 – 13000 = 500units @$22.20 in table below=> $11100

current cost complete closing WIP abnormal total EU cost per

$ units less loss unit $
opening
WIP
Materials 96600 8000 3000 500 11500 8.40
Conversion 155250 9400 1350 500 11250 13.80
99600-3000* 10000-2000x30%
22.20

Cost of completed units:

(8000material x $8.40) + (9400conversion x $13.80) = $196920

Add opening WIP directly as a separate block: $24600

Total: $221520

Cost of closing WIP:

(3000 x $8.40) + (1350 x $13.80) = $43830

Process account
Opening WIP 24600 Completed production 221520
Material input 99600 Normal loss scrap value 3000
Conversion input 155250 Abnormal loss 11100
Closing WIP 43830
279450 279450