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.
(i) During May, 1,500 units valued at $226.50 each were transferred from process 1 to process 2.
(ii) Other costs incurred during the month were:
Direct material added $114,750
Direct manufacturing wages $124,850
Manufacturing overheads $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 1 100%
Direct material added 75%
Direct manufacturing wages 40%
Production overhead 20%
(v) There were no unfinished goods in process 2 at the beginning of the period.
Required:
(a) Calculate the:
- Total cost of units completed and transferred to Process 3
- Cost of abnormal losses
- Cost of ending work-in-process inventory in Process 2
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