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Question - The Massive Mining Co refines iron ore for export markets. The following data relates to the company's mine for the month of April:
25,000 units of work in process existed at 1st April, the costs for which were:
Direct materials £18,500
Conversion £36,750
35,000 units commenced production during April. The costs incurred during the month for refining were:
Direct material £300,000
Conversion £230,000
The closing work in progress at 30th April was 15000 units. Materials were added at the beginning of the refining process and conversion was 1/3rd complete at month end.
a. Calculate the cost per equivalent unit for the month of April using the weighted average method of process costing.
b. Calculate the value of work in progress and the value of completed stock transferred to finished goods during the month.
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