Question: On 30 October the following were among
On 30 October the following were among the balances in the cost ledger of a company manufacturing a single product (Product X) in a single process operation: 
The raw material ledger comprised the following balances at 30 October: 
12 160kg of Product X were in finished goods stock on 30 October. During November the following occurred: (i). Raw materials purchased on credit: 
(ii). Raw materials issued from stock: 
Direct materials are issued at weighted average prices (calculated at the end of each month to three decimal places of £). (iii). Wages incurred: Direct: ……………………………………………………… £186 743 (23 900 hours) Indirect: ……………………………………………………………………………. £74 887 (iv). Other manufacturing overhead costs totalled £112 194. Manufacturing overheads are absorbed at a predetermined rate of £16.00 per direct labour hour. Any over-/under- absorbed overhead at the end of November should be left as a balance on the manufacturing overhead control account. (v). 45 937kg of Product X were manufactured. There was no work in progress at the beginning or end of the period. A normal loss of 5 per cent of input is expected. (vi). 43 210kg of Product X were sold. A monthly weighted average cost per kg (to three decimal places of £) is used to determine the production cost of sales. Required: (a). Prepare the following cost accounts for the month of November: Raw material control account Manufacturing overhead control account Work in progress account Finished goods account All entries to the accounts should be rounded to the nearest whole £. Clearly show any workings supporting your answer. (b). Explain the concept of equivalent units and its relevance in a process costing system.
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