Page 202 - F2 - MA Integrated Workbook STUDENT 2018-19

Chapter 9

The next stage of this process is to add colour to the mixture. The output from
the first process is transferred to the next process and more value is added
with extra labour and overhead being added.

Process 2 account

Litres $ Litres $
Input materials 2,000 4,000 Output 2,500 5,650
from Process 1 materials to
Process 3
New materials 500 550

Labour 600
Overheads 500
––––– ––––– ––––– –––––

2,500 5,650 2,500 5,650

––––– ––––– ––––– –––––
The cost per litre of material input at the start of production = $3,000 ÷ 2,000 =
$1.50

The cost per litre at the end of Process 1 = $4,000 ÷ 2,000 = $2.00

The cost per litre at the end of Process 2 = $5,650 ÷ 2,500 = $2.26

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