Answer to Question #299929 in Financial Math for james

Question

QUESTION ONE

The manufacturer of product Gero requires three distinct processes A-C. On completion the product was passed from process C to finished goods stock. The following information was obtained in respect of the product

5,000 units of raw materials at ksh 250 were issued to process A and other costs incurred are given below

ELEMENT OF COST PROCESS TOTAL

A B C

Kshs kshs kshs Kshs

Direct materials 5,000 12,000 18,000 35,000

Direct labour 30,000 20,000 10,000 60,000

Direct expenses 2,800 5,200 2,000 10,000

Production overheads - - - 90,000

Production overhead is absorbed by each process at 100% of direct labour

You are required to prepare the process accounts

Answer 1

The process accounts are as shown below: