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Elements of cost Cost (Rs.) Cost per completed unit Materials Labour 7280 10680 7120 Equivalent Production (units) 3640 3560 3560 2.00 3.00 2.00 Overheads 25080 7.00 Statement of Evaluation 21000 1280 Finished goods 3000x7 Work-in-progress: Materials 640x2 Labour 560x3 Overhead 560x2 54 1680 1120 4080 Process A A/C Units Rs. Units Rs To Materials 3800 7280 By Finished stock A/c - 10680 transfer 3000 To Labour To Overhead 21000 4080 7120 By Work-in-progress 800 3800 25080 3800 25080 II. When there is only closing work-in-progress but with process losses In case of normal loss, nothing should be added as equivalent production. However, abnormal loss should be considered as production of good units completed during the period. Illustration 8: During January 2000 units were introduced into Process I. the normal loss was estimated at 5% on input. At the end of the month, 1400 units had been produce and transferred to the next process, 460 units were uncompleted and 140 units had been scrapped. It was estimated that uncompleted units had reached a stage in production as follows: Material 75% completed Labour 50% completed Overheads 50% completed The cost of 20000 units was Rs.5800 Direct material introduced during the process Rs.1440 Direct wages Rs.3340 Production overheads incurred were Rs. 1670 Units scrapped realized Re. I each. Units scrapped passed through the process, so were 100% completed as regards material, labour and overhead. Find out Equivalent Production, Cost per unit and prepare the necessary accounts

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