ACCA MA · Chapter 8 · Question 7 of 12
In a process with no opening work in progress, 8,000 units were started. 6,500 units were completed, and 1,500 units were still in progress at the end of the period. The closing WIP is 100% complete for materials and 60% complete for conversion. Costs were materials $32,000 and conversion $22,200. What is the value of closing work in progress?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $8,700
Explanation
Equivalent units: materials = 6,500 + 1,500 = 8,000, so $4.00 per EU. Conversion = 6,500 + (1,500 x 60%) = 7,400, so 22,200 / 7,400 = $3.00 per EU. Closing WIP = (1,500 x 4.00) + (900 x 3.00) = 6,000 + 2,700 = $8,700. Check: completed output 6,500 x 7 = 45,500, and 45,500 + 8,700 = 54,200, which equals total costs.
More Job, batch and process costing MCQs
- Q9What is the main difference between a joint product and a by-product?
- Q10A joint process costs $90,000 and produces 4,000 kg of Product X, which sells for $15 per kg, and 6,000 kg of Product Y, which sells for…
- Q11A joint process costs $72,000 and produces 3,000 units of P and 5,000 units of Q. P needs further processing costing $4 per unit and then…
- Q12How are the sales proceeds of a by-product commonly treated in process costing?
- Q1For which of the following businesses would job costing be most appropriate?