Can anyone help me wid this?
calculate d value of closing WIP by using FIFO & weighted avg method..
WIP(opening) degree of completion
1000 units
Raw material 100% Rs.5000
Wages 40% RS.2000
overhead 20% RS.1000
Fresh inputs 10000 units Rs.60000
wages Rs. 70000
overhead Rs.40000
closing WIP
1000 units
raw material 100%
wages 60%
overhead 30%
output 9900 units, normal loss 100 units
Ans should be :
FIFO 11418 WA 11282
SACHIN KUMAR GARG
(Final Student)
(105 Points)
Replied 27 March 2010
| FIFO | 10963.3 | ||
| Mat | LAB | OV | |
| 60000/10900*1000 | 70000/11100*600 | 40000/11000*300 | |
| 5504.6 | 3783.8 | 1090.9 | 10379.3 |
| WA | |||
| Mat | LAB | OV | |
| 65000/10900*1000 | 72000/11100*600 | 41000/11000*300 | |
| 5963.3 | 3891.9 | 1118.2 | 10973.4 |
CA Anshu Agarwal
(B€ @LW@¥$ ]-[@Pp¥)
(1832 Points)
Replied 04 April 2010
Valuation under FIFO method:
Per Unit Cost = expenses / weighted no. of unit produced
Weighted no. of unit produced;
for material = 10000
for wages = 600 (completed out of op. WIP) + 10000 - 400 (remained to be completed in cl. WIP) = 10200
for overheads = 800 + 10000 - 700 = 10100
valuation of overhead:
Material in cl. WIP = 60000/10000*1000 = 6000
Wages in cl. WIP = 70000/10200*600 = 4118
Overhead in cl. WIP = 40000/10100*300 = 1188
total value of cl. WIP = 11306.
CA Anshu Agarwal
(B€ @LW@¥$ ]-[@Pp¥)
(1832 Points)
Replied 04 April 2010
Valuation under weighted average method:
Per Unit Cost = total expenses / weighted no. of total unit produced
Weighted no. of total unit produced;
for material = 1000 + 10000 - 100 = 10900
for wages = 1000 + 10000 - 400 (remained to be completed in cl. WIP) -100 = 10500
for overheads = 1000 + 10000 - 700 -100= 10200
valuation of overhead:
Material in cl. WIP = 65000/10900*1000 = 5963
Wages in cl. WIP = 72000/10500*600 = 4114
Overhead in cl. WIP = 41000/10200*300 = 1206
total value of cl. WIP = 11283 (or say 11282)
CA Anshu Agarwal
(B€ @LW@¥$ ]-[@Pp¥)
(1832 Points)
Replied 04 April 2010
RECTIFICATION IN THE SOLUTION AS I DID NOT CONSIDERED NORMAL LOSS OF 100 UNIT.
Valuation under FIFO method:
Per Unit Cost = expenses / weighted no. of unit produced
Weighted no. of unit produced;
for material = 10000 - 100 = 9900
for wages = 600 (completed out of op. WIP) + 10000 - 400 (remained to be completed in cl. WIP) -100 = 10100
for overheads = 800 + 10000 - 700 -100 = 10000
valuation of overhead:
Material in cl. WIP = 60000/9900*1000 = 6060
Wages in cl. WIP = 70000/10100*600 = 4158
Overhead in cl. WIP = 40000/10000*300 = 1200
total value of cl. WIP = 11418.
SACHIN KUMAR GARG
(Final Student)
(105 Points)
Replied 05 April 2010
Hi Anshu
As per ur calculation u didn't considared Normal Loss and Closing Stock in weighted no. of unit produced
CA Anshu Agarwal
(B€ @LW@¥$ ]-[@Pp¥)
(1832 Points)
Replied 05 April 2010
I have considered it, please check...
moreover answer is also tallied.
SUDHIR & PRADEEP JI
(CA FINAL+LLB + DISA)
(2299 Points)
Replied 06 April 2010
| FIFO | 10963.3 | ||
| Mat | LAB | OV | |
| 60000/10900*1000 | 70000/11100*600 | 40000/11000*300 | |
| 5504.6 | 3783.8 | 1090.9 | 10379.3 |
| WA | |||
| Mat | LAB | OV | |
| 65000/10900*1000 | 72000/11100*600 | 41000/11000*300 | |
| 5963.3 | 3891.9 | 1118.2 | 10973.4 |
SACHIN KUMAR GARG
(Final Student)
(105 Points)
Replied 06 April 2010
given answer is not always right
CA Anshu Agarwal
(B€ @LW@¥$ ]-[@Pp¥)
(1832 Points)
Replied 08 April 2010
| Originally posted by : SACHIN KUMAR GARG | ||
 |
FIFO 10963.3 Mat LAB OV 60000/10900*1000 70000/11100*600 40000/11000*300 5504.6 3783.8 1090.9 10379.3 WA Mat LAB OV 65000/10900*1000 72000/11100*600 41000/11000*300 5963.3 3891.9 1118.2 10973.4 |
 |
can u tell me the followings:-
in case of FIFO method:
why u have included 1000 units of opeing WIP, in calculating Materail cost per unit? only 10000 units produced in current period less normal loss should be considered. (i.e. 10000-100 = 9900)
same in case of wages and overheads.
in case of weighted average method:
for wages: why u have considered 1000 units (some portion comleted in preceding period and some in current period) and also 600 units (portion incomlete out of preceding period in current year)? so u considered 600 units twice, i.e. included in 1000 units and 600 separately also.
same in case of overhead.
pls check the same.
SACHIN KUMAR GARG
(Final Student)
(105 Points)
Replied 08 April 2010
Hi Anshu
yes ur right, i have done mistake in my calculation
chaman
(ARTICLE)
(30 Points)
Replied 21 September 2018
NORMAL CAPACITY PRODUCTION 50000 UNITS PER YEAR AND PRODUCTION OVER HEAD FOR YEAR 350000 COST OF CONVERSION 10 LACS . UNITS REMAIN CLOSED FOR 2 MONTHS DUE TO LATE ORDER RECD.
1 FIND CLOSING STOCK VALUE FOR 6000 UNITS IF UNIT IDLE IS DUE TO NORMAL ANS 162000
2 VALUE OF 6000 UNITS IF UNIT CLOSING IS DUE TO ABNORMAL ANS 155000
Sasis
(articled assistant)
(27 Points)
Replied 02 October 2018
CAclubindia
