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Chapter 9
Process 2 account
Litres $ Litres $
Input materials 2,000 4,000 Output materials 2,500 5,650
from Process 1 to Process 3
New materials 500 550
Labour 600
Overheads 500
––––– ––––– ––––– –––––
2,500 5,650 2,500 5,650
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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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