Asana company limited is into production of bricks .For the period jut ended 30 April the...
Asana company limited is into production of bricks .For the period jut ended 30 April the company initiated 2,500units of material ODA into production expecting 15% to go waste. However ,80% of the input material came out as good. It cost Asana company 50,000GHS to obtain the material. Labour cost has be agreed at 60% of the material cost whilst overhead cost is always at ¾ of the material cost. Normal loss can be sold at 1.50GHS per unit.
Required:
i) Estimate the cost of each finished good
ii) What is the value of abnormal loss/ abnormal gain if any?
iii) Show the process account
iv)State three features of process costing system
Homework Answers
iv) features of process costing are:
- The products processed and output received from process costing are homogeneous, meaning they are same in the size structure and appearance.
- The process carried on the products is standardized and continuous and same on all the products under the process
- The output from one process becomes the input for other process and so on till the last process, the output of which is finished product.
- The stock of semi-finished or wip product is quantified in terms of equivalent units. Eg. If there are 1000 units in wip or semi-finished goods on which 50% of the process is carried out, they will be counted as 500 finished products.
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