Reference no: EM132621112

The manufacture of product Puffin requires four distinct processes. On completion the processes pass from process 4 to finished goods stock. During the first quarter the following information was obtained

Cost element                Total              Process 1          Process 2            Process 3         Process4

                                     ksh.'000'       ksh.'000'              ksh.'000'                  ksh.'000'       ksh.'000'

Direct material            6,500               3,750              1,000                     -               1,750

Direct labour              6,625              625                    750                     2,250        3,000

Direct expenses           2,000               250                   -                      500            1,250

Production overheads  19,875                  -                     -                      -               -

Production overhead is absorbed by each process on the basis of 300% of direct wages.

Production during the period was 1,000 units.

Required:

Problem 1: Prepare the process accounts and transfer the finished output to the finished stock account.