Muller Manufacturing Co. Ltd. makes a product by way of three consecutive processes. The following data relates to process 2 for the month of May. During May, 1,500 units valued at $226.50 each were transferred from process 1 to process 2. (1) (ii) Other costs incurred during the month were: Direct material added Direct manufacturing wages Manufacturing overheads $114,750 $124,850 $158,250 (iii) 200 units were scrapped during the period. Normal losses were estimated to be 81/3% of input during the period. The scrap value of any loss is $78.00 per unit. (iv) Work-in-progress at the end of May was 400 units and had reached the following degree of completion: Transfer from process 1 Direct material added Direct manufacturing wages Production overhead 100% 75% 40% 20% (v) There were no unfinished goods in process 2 at the beginning of the period. Required: (a) Prepare a statement of equivalent production to determine the equivalent units and conversion costs and the cost per equivalent unit for direct materials (From Process 1 & Direct Material Added), Manufacturing Wages & Manufacturing Overhead.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Muller Manufacturing Co. Ltd. makes a product by way of three consecutive processes. The
following data relates to process 2 for the month of May.
During May, 1,500 units valued at $226.50 each were transferred from process 1 to
process 2.
(i)
(ii) Other costs incurred during the month were:
Direct material added
$114,750
Direct manufacturing wages
Manufacturing overheads
$124,850
$158,250
(iii) 200 units were scrapped during the period. Normal losses were estimated to be
81/3% of input during the period. The scrap value of any loss is $78.00 per unit.
(iv) Work-in-progress at the end of May was 400 units and had reached the following
degree of completion:
Transfer from process 1
Direct material added
Direct manufacturing wages
Production overhead
100%
75%
40%
20%
(v)
There were no unfinished goods in process 2 at the beginning of the period.
Required:
(a) Prepare a statement of equivalent production to determine the equivalent units and
conversion costs and the cost per equivalent unit for direct materials (From Process
1 & Direct Material Added), Manufacturing Wages & Manufacturing Overhead.
Transcribed Image Text:Muller Manufacturing Co. Ltd. makes a product by way of three consecutive processes. The following data relates to process 2 for the month of May. During May, 1,500 units valued at $226.50 each were transferred from process 1 to process 2. (i) (ii) Other costs incurred during the month were: Direct material added $114,750 Direct manufacturing wages Manufacturing overheads $124,850 $158,250 (iii) 200 units were scrapped during the period. Normal losses were estimated to be 81/3% of input during the period. The scrap value of any loss is $78.00 per unit. (iv) Work-in-progress at the end of May was 400 units and had reached the following degree of completion: Transfer from process 1 Direct material added Direct manufacturing wages Production overhead 100% 75% 40% 20% (v) There were no unfinished goods in process 2 at the beginning of the period. Required: (a) Prepare a statement of equivalent production to determine the equivalent units and conversion costs and the cost per equivalent unit for direct materials (From Process 1 & Direct Material Added), Manufacturing Wages & Manufacturing Overhead.
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Step 1 Introduction

Equivalent Production is the representation of units produced in a production process in terms of complete units. It is usually fully completed and partially completed units represented as fully complete units.

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