Cost Accounting-Calculations


Question 1




The Mitchell Construction Company uses a process-cost system.  Materials are added at the beginning of a particular process and conversion costs are incurred uniformly.  The following data relates to February 2017:




Opening work in progress                                              400 units


Units started during the month                                   5,200 units


Closing work in progress                                               150 units




Cost of materials in April                                            €31,980


Conversion costs in April                                            €21,580


Cost of materials, opening work in progress                 €2,740


Conversion costs, opening work in progress                    €640




The opening work in progress is fully complete regarding materials and 40% complete regarding conversion costs.


The closing work in progress is fully complete regarding materials and 70% complete regarding conversion costs.


No units were lost in the production process in February 2017






Prepare a cost-of-production report for February 2017, indicating the cost of finished goods and the cost of closing work in progress using the following two methods:




(a) The first-in-first-out method (FIFO); and



(b) The weighted-average method


Question 2



Jumco Limited, which uses process costing, manufactures a single product which passes through two processes, the output of process 1 becoming the input of process 2.


Normal losses and abnormal loss are defective units having a scrap value and cash is received at the end of the period for all such units.  The following information relates to a four-week period:


18,000 units of raw material were issued to process 1 at a cost of €5.00 per unit.  There was no opening or closing work in progress but opening and closing stocks of finished goods were €30,000 and €35,000 respectively.




Process 1                     Process 2


Normal loss as a percentage of input              4.50%                          6.00%

Output in units                                                17,150                         16,150

Scrap value per unit – €                                      2.00                            6.00

Direct wages incurred – €                                15,000                         25,000

Additional components – €                             10,140                         11,176


Production overhead as a percentage of

Direct wages                                                   80%                             45%



Present the accounts for the following:


(a)                Process 1

(b)               Process 2

(c)                Finished goods

(d)               Normal loss

(e)                Abnormal loss

(f)                Abnormal gain


Question 3





BKC Limited produces three joint products in one common process but each product is capable of being further processed separately after the split-off point.  The estimated data given below relate to January 2017:




                                                Product B                   Product K                  Product C




Selling price at


the split-off point                    10                                18                                20




Selling price


after further processing           20                                30                                45




Post separation point costs      33,000                         35,000                         42,300






Output in Litres                      7,000                           5,000                           4,000




Pre-separation point joint costs are estimated to be €60,000 and it is current practice to apportion these costs to the three products according to litres produced.






  1. Prepare a statement of estimated profit or loss for each product and in total for January 2017 if all three products are processed further.




  1. Advise how profit could be maximised if one or more products are sold at the split-off point.  Your advice should be supported by a profit statement.



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