Problem
Oliver manufacturing Ltd uses process costing in their company. The company manufactures its products and the products go through four [4] different processes for them to be ready for sale in the market. Currently their target markets are companies that are based in Africa only. As a cost accountant for the company, you have been given the following information which has been extracted from the books of the company for the month of September 2022. Assume that there was neither opening nor closing work in progress [WIP].
|
|
1st process
|
2nd process
|
3rd process
|
4th process
|
|
|
$
|
$
|
$
|
$
|
|
Materials that were consumed
|
36 000.00
|
-
|
-
|
42 000.00
|
|
Labour costs that were incurred
|
87 000.00
|
48 000.00
|
45 000.00
|
6 000.00
|
|
Allocated overheads
|
27 000.00
|
60 000.00
|
18 000.00
|
21 000.00
|
NB: It's very pertinent to note that the output at the end of each of the processes consisted of 750 kiloliters' of production.
Make Assuming that there were no spillages during the four processes, calculate the cost per kilolitre after completion of each of the processes.