ACCA MA · Chapter 8 · Question 8 of 12
A process uses the weighted average method. Opening WIP was 1,000 units, valued at materials $3,800 and conversion $1,500. 9,000 units were started, with costs of materials $36,200 and conversion $30,000. 8,000 units were completed, and closing WIP of 2,000 units was 100% complete for materials and 50% complete for conversion. What is the value of the completed output?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $60,000
Explanation
Weighted average combines opening WIP costs with period costs. Materials: EU = 8,000 + 2,000 = 10,000; cost = 3,800 + 36,200 = 40,000, giving $4.00 per EU. Conversion: EU = 8,000 + (2,000 x 50%) = 9,000; cost = 1,500 + 30,000 = 31,500, giving $3.50 per EU. Completed output = 8,000 x (4.00 + 3.50) = $60,000. Closing WIP would be (2,000 x 4) + (1,000 x 3.5) = $11,500.
More Job, batch and process costing MCQs
- 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?
- Q2A job requires direct materials of $1,200 and 40 hours of direct labour at $15 per hour. Production overheads are absorbed at $20 per…