QUESTION 2 25 MARKS The following information
relates to Ngweze Manufacturers CC, a close corporation that
manufactures a single product and uses a process costing system.
Inventory is valued on the FIFO method.
The process is such that all materials are added at the beginning
of the process and conversion costs are incurred evenly throughout
the process. Units are inspected when the process is 80% complete
and losses normally amount to 20% of the good units.
Below is information pertaining to the month of February 2017
Opening work in progress
Units – 40% complete 7 000 Material costs R90 000 Conversion costs
R45 000 Costs for February 2011
Material costs R860 000 Conversion costs R518
880 Production for February 2011
Units placed into production 43 000 Units completed and transferred
32 000 Work in progress – 75% complete 7 200
Page 10 of 12
REQUIRED:
2.1 Compute the cost per equivalent unit of production. (12) 2.2
Compute the value of finished goods, work in progress and abnormal
losses (in applicable). (13)
ANSWER 2.1)
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