Unga millers operates a manufacturing process where six (6) people work as a team and are
paid a weekly group bonus based upon the actual output of the team compared with output
expected.
A basic 37 hour week is worked during which the expected output from the process is 4,000
equivalent units of a product. Basic pay is Ksh. 5.00 per hour and the bonus of the group,
shared equally, is Ksh. 0.80 per unit in excess of expected output.
In the week ended January 31, 2009, basic hours were worked on the process. The following
additional information is provided for the week:
Opening work in process (1,000 units):
Materials used Ksh. 540 (100% complete)
Labour and overheads Ksh. 355 (50% complete)
During the week:
Materials used Ksh. 2,255
Overheads incurred Ksh. 1,748
Completed production 3,800 units
Closing work in progress (1,300 units):
Materials (100% complete)
Labour and overheads (75% complete)
NB
There are no process losses
The FIFO method is used to apportion costs
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