80.2K

Verified Solution

Link Copied!

In the production of cotton fabric, Fine Fabric makes use of two processes. As a management accountant, you have been requested to calculate the value of finished goods for the month ended 31 March 2019. You have been provided with the following information related to Process B for the month ended 31 March 2019: Opening work-in-progress (OWIP) costs: R Process 1 420 Material 550 Conversion costs 1 600 Costs incurred during March 2019: R Transferred from the previous process 5 470 Material 4 100 Conversion costs 12 006 Metres of polyester fabric for Process 2 (March 2019): OWIP (80% complete) 50 metres Transferred in from the previous process 1 500 metres Finished goods 1 200 metres Closing WIP (35% complete) 120 metres Additional information for Process 2: Material is issued at the 20% mark of the production process. Conversion costs are incurred evenly during the process. Normal wastage is estimated at 10% of input and takes place when production is 40% complete. Cotton fabric that is wasted has a saleable value of R1.20 per metre. Abnormal loss units do not share in the normal loss allocation. The company uses the weighted average stock valuation method. Required: Calculate the value of finished goods for the month ended 31 March 2019.

Answer & Explanation Solved by verified expert

See Answer