Waec Model Questions Vol1 2022 Financial Accounting Question 21

A manufacturing company uses process costing with the weighted‑average method. Opening work‑in‑process (WIP) is 5,000 units, 40% complete for materials and 30% for conversion. During the period 30,000 units are started. Closing WIP is 4,000 units, 60% complete for materials and 50% for conversion. Materials are added at the start of the process and conversion costs are incurred uniformly. Normal loss is 5% of units started and is accounted for at the same cost per unit as good units. Abnormal loss is 2% of units started and the lost units are sold for ₦2 each. Total material cost incurred is ₦180,000 and total conversion cost incurred is ₦120,000. (a) Determine the cost per unit of good units transferred out (rounded to two decimal places). (b) Calculate the profit or loss on the abnormal loss (rounded to the nearest naira).