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In a certain month, 2000 units were introduced into process 1. The normal loss was expected to be 5% on inputs. At the end of the month, 1,400 units had been produced and transferred to the next process. 460 units were uncompleted and 140 units had been scrapped. It was established that uncompleted units had reached a stage in production as follows: Material 60% Labour 40%

In a certain month, 2000 units were introduced into process 1. The normal loss was expected to be 5% on inputs. At the end of the month, 1,400 units had been produced and transferred to the next process. 460 units were uncompleted and 140 units had been scrapped. It was established that uncompleted units had reached a stage in production as follows: Material 60% Labour 40%

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
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Problem 36E: (Appendix 11A) Cycle Time and Velocity Prakesh Company has the following data for one of its...
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QUESTION 1
In a certain month, 2000 units were introduced into process 1. The normal loss was expected
to be 5% on inputs. At the end of the month, 1,400 units had been produced and transferred to
the next process. 460 units were uncompleted and 140 units had been scrapped. It was
established that uncompleted units had reached a stage in production as follows:
Material
60%
Labour
40%
Overheads
10%
The cost of the 2000 units introduced into process 1 was GH¢5,800.00
Materials introduced into the process amounted to GH¢1,440.00
Direct wages amounted to GH¢3,340.00
Production overhead incurred was GH¢1,670.00
Units scrapped realized GH¢1.00 each
The units scrapped have passed through the process, so were 100% completed as regards
materials, labour and overheads.
You are required to prepare:
i.Statement of Equivalent Units
ii.Statement of Cost
iii.The process 1 account and the abnormal loss account
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