Answer to Question #66411 in Financial Math for ARIOKOT JOSEPHINE

Question

The following information relates to process 3, which receives inputs from Process 2, in Mighty Products Limited:
DETAILS Shs. Units
Transfers in from Process 2
Materials added, referred to as material 2
Labour costs:
Direct
Indirect
Overheads 300,000
230,000

50,000
55,600
50,400 10,000
-

40 hrs
60 hrs
-

During the period the above costs were incurred, 7,200 units of finished goods were transferred to stores. Normal loss is expected at 2% of all inputs.
The closing work in progress was 2000 units, which were 60% complete in all the relevant aspects. Material 2 is added at the beginning of the process.
Normal losses are complete in all aspects. They were sold for Sh.6,000.
There was no opening work in progress.
Required:
i) A process account
ii) The production statement
iii) The valuation of the closing work in progress
iv) An abnormal loss account.