Let's break down the solution for the first part, which is: **(a) Prepare the quantity statement for June 2024 based on the weighted average method of inventory valuation.** We'll do this step by step: --- ## **Step 1: List the Input Units** - **Opening WIP:** 9,000 units - **Units started during June:** 80,000 units **Total units to account for:** \[ 9,000 + 80,000 = 89,000 \text{ units} \] --- ## **Step 2: Account for Output Units** Output can be split as: - **Completed & transferred out:** 70,000 units - **Closing WIP:** 10,000 units (75% complete) - **Normal loss:** 4% of units that reach wastage point First, determine the units that reach the wastage point: - All units except closing WIP reach wastage point (since closing WIP is not finished). - So, units reaching wastage point = Units completed + Normal loss units (since loss is part of output, not closing WIP). Let's calculate normal loss: - Units to be accounted for (excluding closing WIP): \( 89,000 - 10,000 = 79,000 \) - Normal loss = 4% × 79,000 = **3,160 units** --- ## **Step 3: Prepare the Quantity Statement** | Particulars | Units | |-------------------------------------------------|----------| | **Input:** | | | Opening WIP | 9,000 | | Units started | 80,000 | | **Total units to account for** | 89,000 | |-------------------------------------------------|----------| | **Output:** | | | Completed & transferred | 70,000 | | Normal loss | 3,160 | | Closing WIP | 10,000 | | **Total output accounted for** | 83,160 | **But wait:** The total output is less than input; this suggests that the closing WIP should be recalculated or that the loss is calculated differently. Typically, the sum of completed units, closing WIP, and loss should equal total input. So, let's check: - Completed & transferred: 70,000 - Closing WIP: 10,000 - Normal loss: 3,160 **Total:** 83,160 But input is 89,000, so the figures suggest either abnormal loss or an error in the question's data. For now, let's assume all numbers are correct and the remaining units are abnormal loss: Abnormal loss = Input - (Completed + Closing WIP + Normal loss) Abnormal loss = 89,000 - (70,000 + 10,000 + 3,160) = 5,840 units **Final Quantity Statement:** | Particulars | Units | |-------------------------|---------| | Input | | | - Opening WIP | 9,000 | | - Units started | 80,000 | | **Total Input** | 89,000 | |-------------------------|---------| | Output | | | - Completed & transferred| 70,000 | | - Normal loss | 3,160 | | - Abnormal loss | 5,840 | | - Closing WIP | 10,000 | | **Total Output** | 89,000 | --- ## **Final Answer (Quantity Statement):** **Step 1:** Add opening WIP and units started: **9,000 + 80,000 = 89,000 units** **Step 2:** Calculate normal loss (4% of units that reach wastage point): **Normal loss = 4% × (89,000 - 10,000) = 3,160 units** **Step 3:** Prepare the statement: | Particulars | Units | |-------------------------|---------| | Input | | | - Opening WIP | 9,000 | | - Units started | 80,000 | | **Total Input** | 89,000 | |-------------------------|---------| | Output | | | - Completed & transferred| 70,000 | | - Normal loss | 3,160 | | - Abnormal loss | 5,840 | | - Closing WIP | 10,000 | | **Total Output** | 89,000 | --- Let me know if you'd like the **production cost statement** as well!

Certainly! Let's approach the problem systematically in three clear steps, with explanations, to prepare the required statements based on the provided data. --- ### **Step 1: Quantity Statement for June 2024 (Weighted Average Method)** **Objective:** Determine the flow of units through the process. **Given Data:** - Opening WIP units: **9,000** (50% complete) - Units started in June 2024: **80,000** - Completed and transferred: **70,000** - Closing WIP units: **10,000** (75% complete) - Normal loss: 4% of units reaching the wastage point --- #### **Explanation:** - Total units to account for = Opening WIP + Units started = 9,000 + 80,000 = **89,000 units** - Normal loss occurs when units reach 60% completion. - Units that reach wastage point = Total units minus closing WIP units = 89,000 - 10,000 = 79,000 units - Normal loss = 4% of units reaching wastage point = 4% of 79,000 = **3,160 units** --- ### **Step 2: Calculate the Total Units Accounted For** **Units transferred out:** 70,000 **Closing WIP:** 10,000 units (75% complete) **Normal loss:** 3,160 units (loss occurs at 60% complete) **Total units accounted for:** | Particulars | Units | |---------------------------|---------| | Units transferred out | 70,000 | | Normal loss | 3,160 | | Closing WIP | 10,000 | | **Sum of output** | **83,160** | **Note:** The total input was 89,000 units, so remaining units are abnormal loss: | Abnormal loss = Total input - Total accounted units = 89,000 - 83,160 = **5,840 units** --- ### **Step 3: Final Quantity Statement** | Particulars | Units | |---------------------------|---------| | **Input:** | | | Opening WIP | 9,000 | | Units started in June | 80,000 | | **Total units to account for** | **89,000** | |---------------------------|---------| | **Output:** | | | Units transferred out | 70,000 | | Normal loss | 3,160 | | Abnormal loss | 5,840 | | Closing WIP | 10,000 | | **Total units accounted for** | **89,000** | --- ## **Summary of Step 1:** - Total units input: 89,000 - Units transferred out: 70,000 - Closing WIP: 10,000 units - Normal loss: 3,160 units - Abnormal loss: 5,840 units --- # **Step 4: Prepare the Production Cost Statement (Weighted Average Method)** **Given Cost Data:** - Opening WIP costs: - Raw materials: Rs. 400,000 - Conversion costs: Rs. 250,000 - Additional costs in June 2024: - Raw materials added: Rs. 400,000 - Conversion costs added: Rs. 250,000 --- ### **Explanation:** - **Total raw materials cost:** Rs. 400,000 (opening) + Rs. 400,000 (added) = Rs. 800,000 - **Total conversion cost:** Rs. 250,000 (opening) + Rs. 250,000 (added) = Rs. 500,000 - **Total units (for valuation):** 89,000 units --- ### **Step 5: Calculate Equivalent Units** **Using the weighted average method:** - **Units transferred out:** 70,000 (100% complete for materials and conversion) - **Closing WIP:** 10,000 units, 75% complete for conversion - **Normal loss:** 3,160 units, considered 60% complete at loss point - **Equivalent units for materials:** - All units transferred out + closing WIP (materials are added at the beginning, so 100% complete) - Materials in closing WIP: 10,000 units (fully complete for materials) - **Equivalent units for conversion:** - Units transferred out: 70,000 units (100% complete) - Closing WIP: 10,000 × 75% = 7,500 units - Loss units: 3,160 units at 60% complete = 1,896 units --- ### **Step 6: Calculate Cost Per Equivalent Unit** - **Total costs:** - Raw materials: Rs. 800,000 - Conversion: Rs. 500,000 - **Equivalent units:** | Particulars | Units | |----------------------------------|---------| | Materials: | | | Units transferred out | 70,000 | | Closing WIP (materials) | 10,000 | | **Total equivalent units for materials** | 80,000 | | Conversion: | | | Units transferred out | 70,000 | | Closing WIP | 7,500 | | Wastage loss (at 60%) | 1,896 | | **Total equivalent units for conversion** | 79,396 | - **Cost per equivalent unit:** | Cost component | Rs. | |------------------------|----------------| | Raw materials | Rs. 800,000 / 80,000 = Rs. 10 per unit | | Conversion costs | Rs. 500,000 / 79,396 ≈ Rs. 6.30 per unit | --- ### **Step 7: Assign Costs to Completed and WIP Units** - **Cost of units transferred out:** | Raw materials | Rs. 10 × 70,000 = Rs. 700,000 | | Conversion | Rs. 6.30 × 70,000 ≈ Rs. 441,000 | | **Total cost of units transferred out** | Rs. 1,141,000 | - **Cost of closing WIP:** | Raw materials | Rs. 10 × 10,000 = Rs. 100,000 | | Conversion | Rs. 6.30 × 7,500 = Rs. 47,250 | | **Total cost of closing WIP** | Rs. 147,250 | - **Cost of abnormal loss:** - Loss units: 5,840 units at Rs. 10 (materials) + Rs. 6.30 (conversion) - Rs. 10 × 5,840 = Rs. 58,400 - Rs. 6.30 × 5,840 ≈ Rs. 36,792 - Total abnormal loss cost ≈ Rs. 95,192 --- ### **Final Production Cost Statement:** | Particulars | Rs. | |----------------------------------|----------------| | **Costs to be allocated:** | | | Opening WIP costs: | Rs. 400,000 (materials), Rs. 250,000 (conversion) | | Costs added during June: | Rs. 400,000 (materials), Rs. 250,000 (conversion) | | **Total costs:** | Rs. 800,000 + Rs. 500,000 = Rs. 1,300,000 | | **Cost per equivalent unit:** | Rs. 10 (materials), Rs. 6.30 (conversion) | | **Cost of units transferred out:** | Rs. 1,141,000 | | **Cost of closing WIP:** | Rs. 147,250 | | **Cost of abnormal loss:** | Rs. 95,192 | --- ## **Final Summary:** - **Quantity statement** accounts for units of input, output, and losses. - **Cost statement** allocates costs based on the weighted average method, considering equivalent units and total costs. --- If you'd like, I can prepare a neatly formatted final version of both statements.