Reference no: EM132533648
Axe Limited manufactures a single product in two successive processes.
The following information relates to the period ended November 30, 2019
Process 1.
Input
Direct material 15,000 Kgs @ Rs 16 per kilo
Direct Labour 82,000
Factory overheads are absorbed at 22.75% of material cost
Output
11,500 KGS transferred to process 2
There is a normal loss in process of 10% of input
There was no opening or closing wip in process 1
Process 2
Input
11,500 Kgs from process 1
Added material 2000 kgs @ 25
Direct Labour 29,050
Factory overhead were Rs 36,520
Output
10,000 Kgs were transferred to finished stock
- At the end of the month 1,500 kg remained in process these were complete with respect to materials but only 60% complete with respect to conversion costs There was no opening work in progress in process 2.
Required:
Question 1: Prepare process 1 & 2 accounts clearly showing transferred value and closing WIP