QUESTION Mahkota Oil Sdn Bhd has been involved in the palm oil processing industry for several...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
QUESTION Mahkota Oil Sdn Bhd has been involved in the palm oil processing industry for several years. It has a steady market and competing successfully with other more expensive vegetable oil including groundnut, corn, and sunflower oil. The palm oil process, in summary, involves the reception of fresh fruit bunches from the plantations, sterilizing and threshing of the bunches to free the palm fruit, mashing the fruit and pressing out the crude palm oil. The crude oil is further treated in refining process to purify and dry it for storage before it is distributed to wholesalers and retailers. Below are the main activities and cost incurred in processing the oil for the month of April 2022: Threshing Process This is the process where the fresh fruits are removed from the bunch. The fresh fruit bunch consists of fruits embedded in spikelets growing on a main stem. From this process, a by- product which is the empty fruit bunches (EFB) is identified and will be further processed into fiber and particle board. Material input- Fresh fruits 10,000 kgs at a cost of RM13,300 Direct labour RM15,000 Production overhead RM8,880 The normal loss estimated is 5 kilograms for every 1,000 kilograms being processed. Actual losses were incurred as expected and there were no extra losses identified in April 2022. Losses can be sold at RM2 per kilogram. 150 kilograms of output were identified as by-product. The by-product generated a revenue of RM1,800. All good outputs were transferred to Digesting Process for further processing. Digesting Process Digesting is the process of releasing the palm oil in the fruit through the rupture or breaking down of the oil-bearing cells. The digester commonly used consists of a steam-heated cylindrical vessel fitted with a central rotating shaft carrying a number of beater (stirring) arms. Through the action of the rotating beater arms the fruit is pounded. Pounding, or digesting the fruit at high temperature, helps to reduce the viscosity of the oil, destroys the fruits' outer covering (exocarp), and completes the disruption of the oil cells. At the end of Digesting process, the following output was recorded: Total output transferred to Pressing process Total cost transferred to Pressing process 9,800 kilograms RM60,000 Pressing Process Pressing process involves pressing and extracting the oil from the digested material. The objective of this process is to squeeze the oil out of a mixture of oil, moisture, fiber and nuts by applying mechanical pressure on the digested mash. Through this process, another by- product which is the palm pressed fiber (PPF) is obtained and will be further processed to become fuel or fiber composite. Output By-product Crude oil palm transferred to Refining Process Transferred cost to Refining Process PPF Sales value Refining Process Conversion of crude palm oil to refined oil involves removal of the products of hydrolysis and oxidation, colour and flavour. After refining, two joint products are identified: Opening work in progress - 800 kgs at a value of RM2,500 Liquid phase - will be used extensively as liquid cooking oil Solid phase - will be used as feedstock for the production of high-melting palm products. The following cost was recorded in the process for the month of April 2022: The percentage of completion: From previous process Material added Direct labour Production overhead 9,780 kilograms RM76,284 From previous process Material added Direct labour Production overhead 20 kilograms RM2,400 Current period cost: Additional material Direct labour Production overheads Closing work in progress is 700 kilograms with the following stages of completion: 100% 80% 60% 70% 100% 100% 60% 70% RM28,920 RM14,730 RM34,335 No losses are expected in this process. The total actual output was 9,700 kilograms. The percentages of output for liquid phase and solid phase were 40 percent and 60 percent respectively. Total joint cost is to be apportioned using physical measurement method. After Refining process, the liquid phase are packed into a one-kilogram bottle of oil with a packaging cost of RM1.75 per bottle. The selling price per bottle is RM40. The solid phase are sold at RM20,000 per tonne with a total further processing cost of RM5,000. Required: a) b) c) d) Prepare Threshing process account for the month of April 2022. (Show all workings, round off cost per unit to four decimal places if necessary and round off total amount to the nearest ringgit). (6 marks) Prepare Refining process account and the relevant statements for the month of April 2022. (Show all workings, round off cost per unit to four decimal places if necessary and round off total amount to the nearest ringgit). (17 marks) Calculate the profit for Liquid phase and Solid phase for the month of April 2022. (Round off total amount to the nearest ringgit). (3 marks) Joint products are produced simultaneously by a common process or series of processes, with each product possessing more than nominal value in its produced form. In addition, by-products may also arise incidentally to the main products. Identify ONE (1) real example of manufacturing company in agricultural industry that produce joint products. Gives examples of the joint products produced and a by- product that arises from the production. (4 marks) (Total: 30 marks) QUESTION Mahkota Oil Sdn Bhd has been involved in the palm oil processing industry for several years. It has a steady market and competing successfully with other more expensive vegetable oil including groundnut, corn, and sunflower oil. The palm oil process, in summary, involves the reception of fresh fruit bunches from the plantations, sterilizing and threshing of the bunches to free the palm fruit, mashing the fruit and pressing out the crude palm oil. The crude oil is further treated in refining process to purify and dry it for storage before it is distributed to wholesalers and retailers. Below are the main activities and cost incurred in processing the oil for the month of April 2022: Threshing Process This is the process where the fresh fruits are removed from the bunch. The fresh fruit bunch consists of fruits embedded in spikelets growing on a main stem. From this process, a by- product which is the empty fruit bunches (EFB) is identified and will be further processed into fiber and particle board. Material input- Fresh fruits 10,000 kgs at a cost of RM13,300 Direct labour RM15,000 Production overhead RM8,880 The normal loss estimated is 5 kilograms for every 1,000 kilograms being processed. Actual losses were incurred as expected and there were no extra losses identified in April 2022. Losses can be sold at RM2 per kilogram. 150 kilograms of output were identified as by-product. The by-product generated a revenue of RM1,800. All good outputs were transferred to Digesting Process for further processing. Digesting Process Digesting is the process of releasing the palm oil in the fruit through the rupture or breaking down of the oil-bearing cells. The digester commonly used consists of a steam-heated cylindrical vessel fitted with a central rotating shaft carrying a number of beater (stirring) arms. Through the action of the rotating beater arms the fruit is pounded. Pounding, or digesting the fruit at high temperature, helps to reduce the viscosity of the oil, destroys the fruits' outer covering (exocarp), and completes the disruption of the oil cells. At the end of Digesting process, the following output was recorded: Total output transferred to Pressing process Total cost transferred to Pressing process 9,800 kilograms RM60,000 Pressing Process Pressing process involves pressing and extracting the oil from the digested material. The objective of this process is to squeeze the oil out of a mixture of oil, moisture, fiber and nuts by applying mechanical pressure on the digested mash. Through this process, another by- product which is the palm pressed fiber (PPF) is obtained and will be further processed to become fuel or fiber composite. Output By-product Crude oil palm transferred to Refining Process Transferred cost to Refining Process PPF Sales value Refining Process Conversion of crude palm oil to refined oil involves removal of the products of hydrolysis and oxidation, colour and flavour. After refining, two joint products are identified: Opening work in progress - 800 kgs at a value of RM2,500 Liquid phase - will be used extensively as liquid cooking oil Solid phase - will be used as feedstock for the production of high-melting palm products. The following cost was recorded in the process for the month of April 2022: The percentage of completion: From previous process Material added Direct labour Production overhead 9,780 kilograms RM76,284 From previous process Material added Direct labour Production overhead 20 kilograms RM2,400 Current period cost: Additional material Direct labour Production overheads Closing work in progress is 700 kilograms with the following stages of completion: 100% 80% 60% 70% 100% 100% 60% 70% RM28,920 RM14,730 RM34,335 No losses are expected in this process. The total actual output was 9,700 kilograms. The percentages of output for liquid phase and solid phase were 40 percent and 60 percent respectively. Total joint cost is to be apportioned using physical measurement method. After Refining process, the liquid phase are packed into a one-kilogram bottle of oil with a packaging cost of RM1.75 per bottle. The selling price per bottle is RM40. The solid phase are sold at RM20,000 per tonne with a total further processing cost of RM5,000. Required: a) b) c) d) Prepare Threshing process account for the month of April 2022. (Show all workings, round off cost per unit to four decimal places if necessary and round off total amount to the nearest ringgit). (6 marks) Prepare Refining process account and the relevant statements for the month of April 2022. (Show all workings, round off cost per unit to four decimal places if necessary and round off total amount to the nearest ringgit). (17 marks) Calculate the profit for Liquid phase and Solid phase for the month of April 2022. (Round off total amount to the nearest ringgit). (3 marks) Joint products are produced simultaneously by a common process or series of processes, with each product possessing more than nominal value in its produced form. In addition, by-products may also arise incidentally to the main products. Identify ONE (1) real example of manufacturing company in agricultural industry that produce joint products. Gives examples of the joint products produced and a by- product that arises from the production. (4 marks) (Total: 30 marks)
Expert Answer:
Answer rating: 100% (QA)
a Threshing process account for the month of April 2022 Output Good output 9850 kgs RM200kg RM19700 ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Con-Glo Corporation has been involved in various food services businesses since its incorporation in 1999. Con-Glo has a December 31 year-end. You have been asked by the controller to examine the...
-
Doralin Sdn Bhd has been in business for several years but did not keep a complete set of books. Mrs Shuhadah, the owner has approached you to assist her in preparing the financial statements for the...
-
Dynasty Limited has been involved in a research project (code named DNY) for a number of months. There is some doubt as to whether the project should be completed. If it is, then it is expected that...
-
Is the process for issuing a standard sufficient to ensure that all interested parties are consulted? What are the benefits and potential limitations of the process?
-
Fridley Manufacturings accounting records reveal the following account balances after adjusting entries are made on December 31, 2012: Accounts payable ......................$ 62,500 Bonds payable...
-
Assume that the following information is known about the current spot exchange rate between the U.S. dollar and the British pound (), inflation rates in Britain and the United States, and the real...
-
In the 2006 Wells Report, what was the third most common way of detecting fraud? a. Tips b. Internal audits c. External audits d. By accident e. Reports from the police
-
Suppose that a paper mill feeds a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases...
-
Please help me solve this problem!. Dolphins, Inc., has the following estimated quarterly sales for next year. The accounts receivable period is 45 days. What is the expected accounts receivable...
-
Choice Designs Ltd operates a wholesale/retail carpet store. The statement of financial position of the business as at 31 May Year 8 is as follows: As a result of falling profits the directors of the...
-
CAD needs to borrow $700,000 for 90 days to fund the purchase of new stock. To do this, the company decides to issue Promissory Notes (P-notes) In your own words, explain what a Promissory Note is...
-
Cost of Goods Manufactured = 52,500 Raw Materials Used = 25,500 WIP Inventory decreased by 10,000 Labor Cost is 50% of raw materials used. What is the total factory overhead applied?
-
Abudgetis essential for any organization. It helps to keep track of the organization's income and expenditure. Required: (a) Give two reasons for preparing a budget. (b) Describe four behavioral...
-
A chicken dinner has a standard food cost of $3.50. if a 30-percent food cost is desired what would be the base selling price using the ingredients mark-up method
-
The Game of Pig is a classic game played with a 6 sided die. In the game a player rolls the die. If they roll a 2 through 6, they add that score to their round score, but if they roll a 1, their...
-
13. You work for a U.S.-based firm that has transaction exposure to two currencies, net cash inflows in New Zealand dollars and net cash outflows in Japanese yen. Briefly explain (in one or two...
-
How does the interaction of caregivers with young children support their development in those areas? please provide an example for each one of those areas as well: Social-Emotional Language Cognitive...
-
Why is it important to understand the macro-environment when making decisions about an international retail venture?
-
How is the functional currency determined for each company in a group?
-
Retic Ltd. acquired 100% of the share capital of Dorado Ltd. for $102,000 on January 1, 2011, when the equity of Dorado consisted of: Share capital50,000 shares........ $50,000 Retained earnings...
-
Phoenix Ltd. is a not-for-profit organization that began operations on January 1, 2013. The organization provides support for individuals who are trying to start a new life after experiencing...
-
In its most recent corporate report, Williams, Inc., apologized to its stockholders for not paying a dividend. The report states that management will pay a \($1\) dividend next year. That dividend...
-
Nancy Ferris bought a building for \($120,000.\) She paid 15 percent down and agreed to pay the balance in 20 equal annual installments. What are the equal installments if the annual interest rate is...
-
You need \($25,000\) five years from now. You budget to make equal payments at the end of every year into an account that pays an annual interest rate of 7 percent. a. What are your annual payments?...
Study smarter with the SolutionInn App