Question 1

**Section A**

ChemCo operates a chemical refinery using process costing. During the month, 10,000 liters of material were input. Normal loss is 5% of input.

Actual output completed and transferred was 8,500 liters. Closing Work in Progress (WIP) was 1,000 liters, which were 100% complete for materials and 60% complete for conversion costs.

Calculate the equivalent units for conversion costs for the period.

*(Enter your answer as a whole number)*

Accepted Answer

1. Check for abnormal loss: Input (10,000) - Normal Loss (500) = Expected Output (9,500). Actual Output (8,500) + WIP (1,000) = 9,500. There is no abnormal loss/gain.
2. Calculate EU for conversion: Completed units (8,500 * 100%) + WIP units (1,000 * 60%).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Including normal loss in the equivalent units calculation, or using 100% for the WIP conversion costs.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 6

More questions from this exam