PCJ Limited operates a process costing system. At the start of July, work in progress (WIP) of 500 units was 60% complete with respect to materials and had a cost of £1,150. 5,000 units of product were transferred to finished goods during July. At the end of July, WIP consisted of 600 units of product which were 50% complete with respect to materials. Materials costs incurred by the process during July were £20,050. PCJ Limited uses the first in first out (FIFO) method when valuing closing work in progress and finished goods. How much materials cost is included in the production cost of goods transferred to finished goods during July?

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The Answer of PCJ Limited operates a process costing system. At the start of July, work in progress (WIP) of 500 units was 60% complete with respect to materials and had a cost of £1,150. 5,000 units of product were transferred to finished goods during July. At the end of July, WIP consisted of 600 units of product which were 50% complete with respect to materials. Materials costs incurred by the process during July were £20,050. PCJ Limited uses the first in first out (FIFO) method when valuing closing work in progress and finished goods. How much materials cost is included in the production cost of goods transferred to finished goods during July?

PCJ Limited Operates a Process Costing System