Question

KLM Industries Limited uses a process cost system of their process, the following data relates to the process No. 2.• 8,000 Units received from previous department costing Rs. 840,000• 1500 units are in process at the end ( 40% complete as to material and 50% as to conversion cost)• 2,000 units are in process at the start ( 60% complete as to material and 70% as to conversion cost) that costs Rs. 500,000• Cost added by process 2: Direct material Rs. 513,500, Direct labour Rs. 902,750 and FOH Rs. 628,000

•Compute the amount of EPU for material, labour and FOH is

•Compute Total per-unit cost.

• Compute the Cost of units completed and transferred out.

• Compute the Cost of work in process ending.

Answer 1

Production Report - FIFO Method
	Physical units	Transferred in	DM	Labor	Overhead	TOTAL
Beginning WIP (A)	2000		800 (40%)	600 (30%)	600 (30%)
Started & completed (B)	6500	6500	6500	6500	6500
Transferred out	8500
Ending WIP ('C)	1500	1500	600 (40%)	750 (50%)	750 (50%)
Equivalent Units		8000	7900	7850	7850
Total cost incurred		840000	513500	902750	628000
Total cost per Equi. Unit (D)		105	65	115	80
Completion of Beg. WIP:
Opening cost						500000
Add: during period (A*D)			52000	69000	48000	169000
Total cost of Beg WIP						669000
Cost of Started & Comp. (B*D)		682500	422500	747500	520000	2372500
Cost of units compl. & Transferred out						3041500
Cost of Ending WIP (C*D)		157500	39000	86250	60000	342750