CMA Intermediate · Cost Accounting · Process Costing
A process had no opening work-in-progress. During the month 4,000 units were started; 3,000 were completed and 1,000 remain 50% complete for all costs. Total process cost is Rs 3,50,000. What is the value of closing work-in-progress?
Equivalent units are 3,500, so cost per equivalent unit is Rs 100. Closing WIP is 500 equivalent units at Rs 100, which is Rs 50,000. Valuing all 1,000 units fully would wrongly give Rs 1,00,000.
- ARs 1,00,000Correct
- BRs 87,500
- CRs 75,000
- DRs 50,000
Explanation
Equivalent units = 3,000 + 1,000 x 50% = 3,500. Cost per equivalent unit = 3,50,000/3,500 = Rs 100. Closing WIP = 500 equivalent units x 100 = Rs 50,000. So the correct value is Rs 50,000.
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