Can someone please explain me why the answer for the below questions in 850. The questions is related to process costing.
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Process costing
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Might be answers which u are looking is wrong....
| OUTPUT | |||||||||
| INPUT | MATERIAL | LABOUR & OVERHEADS | |||||||
| UNITS | UNITS | % |
EQUIV UNITS |
% |
EQUIV UNITS |
||||
| OP. WIP | 400 | FINISHED FROM OP WIP | 400 | 100 | 400 | 60 | 240 | ||
| INTRODUCED | 1000 | FINISHED FROM INTRODUCED | 400 | 100 | 400 | 100 | 400 | ||
| CL. WIP | 600 | 75 | 450 | 20 | 120 | ||||
| 1400 | 1400 | 1250 | 760 | ||||||
Apart from Op. WIP, above total equivalent units of material for the period (i.e., introduced and closing WIP are 850 units).
@ CMA Sanjay Hakhu: thank you for the Answer. I am actually getting confused on why closing WIP is calculated 75%. If you can explain that part that would be help ful.
Since the process is complete only 20%(since the degree of completion quoted relates to labour and overhead costs), the materials added is 3/4 th only( .e., 75%).
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