Question

1-

Sur Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 62,600 units during the month and had 6,000 units in process at month-end, 40% complete. Conversion costs associated with the beginning work-in-process inventory amounted to OMR 279,650, and amounts that relate to the current month totaled OMR800,000. If conversion is incurred uniformly throughout manufacturing, Sur's equivalent-unit cost is:

Select one:

a.
16.61

b.
14.16

c.
16.00

d.
15.16

2-

Quattro began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgeted collections for June?

Select one:

a. OMR 75,000

b. OMR 81,000

c. OMR 90,000

d. OMR 65,000

Answer 1

(1) Option (a) is correct

Equivalent Unit cost
Beginning WIP cost	279650
Cost related to current month	800000
Total Cost	1079650
÷ Equivalent units	65000
Equivalent Unit cost	16.61

Explanations :-

Equivalent Units
Units completed during month	62600
Ending WIP (6000 * 40%)	2400
Equivalent Units	65000

(2) Option (a) is correct

Budgeted collections for June
From April Sale (60000 * 10%)	6000
From May Sale (80000 * 60%)	48000
From June Sale (70000 * 30%)	21000
Budgeted collections for June	75000