Reference no: EM132533648

Axe Limited manufactures a single product in two successive processes.

The following information relates to the period ended November 30, 2019

Process 1.

Input

Direct material 15,000 Kgs @ Rs 16 per kilo

Direct Labour 82,000

Factory overheads are absorbed at 22.75% of material cost

Output

11,500 KGS transferred to process 2

There is a normal loss in process of 10% of input

There was no opening or closing wip in process 1

Process 2

Input

11,500 Kgs from process 1

Added material 2000 kgs @ 25

Direct Labour 29,050

Factory overhead were Rs 36,520

Output

10,000 Kgs were transferred to finished stock

• At the end of the month 1,500 kg remained in process these were complete with respect to materials but only 60% complete with respect to conversion costs There was no opening work in progress in process 2.

Required:

Question 1: Prepare process 1 & 2 accounts clearly showing transferred value and closing WIP