pass through Process I, where Product 'A' is produced. Question 29: A Chemical Company carries on production operation in two processes. The material first Following data are given for the month just ended: Material input quantity Opening work-in-progress quantity (Material 100% and conversion 50% complete) Work completed quantity Closing work-in-progress quantity (Material 100% and conversion two-third complete) Material input cost Processing cost Opening work-in-progress cost Materials cost 2,00,000 kgs 40,000 kgs 1,60,000 kgs 30,000 kgs * 75,000 1,02,000 Processing cost Normal process loss in quantity may be assumed to be 20% of material input. It has no realizable value. Materials Costs Processing Costs * 20,000 * 12,000 Any quantity of Product 'A' can be sold for 1.60 per kg. Alternatively, it can be transferred to Process II for further processing and then sold as Product 'AX' for * 2 per kg. Further materials are added in Process II, which yield two kgs of product 'AX' for every kg of Product 'A' of Process I. 1,20,000 kgs of Product 'A' input 1,32,000 *1,20,000 Of the 1,60,000 kgs per month of work completed in Process 1,40,000 kgs are sold as Product 'A' and 1,20,000 kgs are passed through Process II for sale as Product 'AX'. Process II has facilities to handle upto 1,60,000 kgs of Product 'A' per month, if required. The monthly costs incurred in Process II (other than the cost of Product 'A') are: 1,60,000 kgs of Product 'A' input *1,76,000 X 1,40,000 Required: (i) Determine, using the weighted average cost method, the cost per kg of Product 'A' in Process I and value of both work completed and closing work-in-progress for the month just ended. (ii) Is it processing 1,20,000 kgs of Product 'A' further? (ii) Calculate the minimum acceptable selling price per kg, if a potential buyer could be found for additional. Output of Product 'AX' that could be produced with the remaining Product 'A' quantity.
pass through Process I, where Product 'A' is produced. Question 29: A Chemical Company carries on production operation in two processes. The material first Following data are given for the month just ended: Material input quantity Opening work-in-progress quantity (Material 100% and conversion 50% complete) Work completed quantity Closing work-in-progress quantity (Material 100% and conversion two-third complete) Material input cost Processing cost Opening work-in-progress cost Materials cost 2,00,000 kgs 40,000 kgs 1,60,000 kgs 30,000 kgs * 75,000 1,02,000 Processing cost Normal process loss in quantity may be assumed to be 20% of material input. It has no realizable value. Materials Costs Processing Costs * 20,000 * 12,000 Any quantity of Product 'A' can be sold for 1.60 per kg. Alternatively, it can be transferred to Process II for further processing and then sold as Product 'AX' for * 2 per kg. Further materials are added in Process II, which yield two kgs of product 'AX' for every kg of Product 'A' of Process I. 1,20,000 kgs of Product 'A' input 1,32,000 *1,20,000 Of the 1,60,000 kgs per month of work completed in Process 1,40,000 kgs are sold as Product 'A' and 1,20,000 kgs are passed through Process II for sale as Product 'AX'. Process II has facilities to handle upto 1,60,000 kgs of Product 'A' per month, if required. The monthly costs incurred in Process II (other than the cost of Product 'A') are: 1,60,000 kgs of Product 'A' input *1,76,000 X 1,40,000 Required: (i) Determine, using the weighted average cost method, the cost per kg of Product 'A' in Process I and value of both work completed and closing work-in-progress for the month just ended. (ii) Is it processing 1,20,000 kgs of Product 'A' further? (ii) Calculate the minimum acceptable selling price per kg, if a potential buyer could be found for additional. Output of Product 'AX' that could be produced with the remaining Product 'A' quantity.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 15E: Costs per equivalent unit and production costs Based on the data in Exercise 17-14, determine the...
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