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LC produces a household detergent in a single process. Information for this process for last month is as follows:
(a) Materials input - 11,000 Litres at 2.00 per litre.
(b) Conversion costs - 23,000
(c) Output during the month - 8,000 litres.
(d) There were 2,000 units of closing work in progress which was complete as to materials and 35% complete as to conversion.
(e) Normal loss for the month was 5% of input and all losses have a scrap value of 50p per litre.
(f) There was no opening work in progress.
The value of closing work in progress at the end of the month is closest to:
Suggested Answer: A
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20 comments · newest first
PR
Precious
1 month ago
I’m confused about the percentages. Need to double-check my work.
GI
Gianna
1 month ago
I agree with Eulah. The scrap value helps too.
RO
Rosendo
2 months ago
I feel like the normal loss affects the output a lot.
LA
Lashonda
2 months ago
I’m leaning towards C) 6,250. The conversion costs add up.
EU
Eulah
2 months ago
I think it’s B) 6,195. The WIP value seems reasonable.
ST
Stephaine
2 months ago
This question is tricky. I’m not sure about the calculations.
LA
Lamar
2 months ago
Not sure about those options, seems off to me.
SA
Sage
2 months ago
Normal loss is 5% of 11,000 litres, so that’s 550 litres lost.
WI
Willis
3 months ago
Wait, how do we calculate the conversion costs for WIP?
FR
France
3 months ago
I think the value is around 6,195.
KR
Kris
3 months ago
Closing WIP is 2,000 units, 100% materials complete.
JO
Joana
3 months ago
Not sure about those options, seems off to me!
JA
Jacinta
3 months ago
Normal loss is 5% of 11,000 litres, so that’s 550 litres lost.
CL
Clay
4 months ago
Wait, how do we account for the conversion costs?
JO
Joni
5 months ago
I think the value should be around 6,195.
NO
Novella
5 months ago
Closing work in progress is 2,000 units, 100% materials complete.
CA
Candra
6 months ago
I think the closing work in progress value is based on the percentage completion, but I can't recall the exact formula we used.
LA
Laura
6 months ago
I feel a bit confused about how to handle the normal loss and its scrap value. Did we include that in the closing work in progress calculation?
GE
Gearldine
6 months ago
This question seems similar to the practice problems we did last week. I think we need to calculate the total cost of materials first.
TY
Ty
6 months ago
I remember we calculated closing work in progress in class, but I'm not sure how to factor in the conversion costs correctly.