CA Inter P4 · Chapter 9 · Question 11 of 11
Opening WIP of 1,000 units (100% material, 50% conversion) had costs of material ₹30,000 and conversion ₹15,000. During the month 9,000 units were introduced; current costs were material ₹2,70,000 and conversion ₹3,25,400. 8,000 units were completed and 2,000 units remained in closing WIP (100% material, 60% conversion). Using the weighted average method, the value of closing WIP is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹1,04,400.00
Explanation
Material: equivalent units = 8,000 + 2,000 = 10,000; cost = ₹30,000 + ₹2,70,000 = ₹3,00,000; rate = ₹30. Conversion: equivalent units = 8,000 + 2,000 x 60% = 9,200; cost = ₹15,000 + ₹3,25,400 = ₹3,40,400; rate = ₹37. Closing WIP = 2,000 x ₹30 + 1,200 x ₹37 = ₹60,000 + ₹44,400 = ₹1,04,400.
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