Reference no: EM132607724

WC Ltd makes one product in a single process. The details of the process for period 2 were as follows: There were 800 units of opening work in progress valued as follows:

Material Shs. 98,000

Labour Shs. 46,000

Production overhead Shs. 7,600

During the period 1,800 units were added to the process and the following costs were incurred:

Material Shs. 387,800.

Labour Shs. 276,320

Production overheads Shs. 149,280

There were 500 units of closing work in progress, which were 100 percent complete for material, 90 percent complete for labour and 40 percent complete for production overheads. A normal loss equal to 10 percent of new material input during the period was expected. The actual loss amounted to 200 units. Each unit of loss was sold for Shs. 10 per unit. Losses are detected prior to WIP stage of completion. WC Ltd uses weighted average costing.

Required:

Question a) Statement of equivalent units

Question b) Process Account

Question c) Normal loss/ Scrap sales Account

Question d) Abnormal loss Account

Question e) Prepare workings to show valuation of closing WIP

Question f) Explain what changes would be required in the process account and abnormal loss account if there were no resale value of losses and give the accounting entries