a. For the month of March prepare the following accounts, ensuring that all workings are clearly shown:(i) The Blending process account (ii) The Cooking process account. b. In some cases a scrap value is placed on the loss arising from a production process. For example, when scrap material can be sold for cash. In such cases, explain how the scrap value of a normal loss and the scrap value of an abnormal loss are treated in the cost accounts.
Drogheda Ltd produces a range of delicious Jams & Preserves which it sells to selected supermarkets. In manufacturing its produce there are two production processes, Blending and Cooking. The Blending process incurs both materials and conversion costs (labour and overheads) when preparing the fruits and sugars and then blending all of the ingredients together. The Cooking process only incurs conversion costs which arise from heating the ingredients and boiling and testing the jams to ensure that it is properly 'set' before being poured into jars. The company uses the weighted average method of process costing to value production and inventory. Information relating to one of the company's most popular products, strawberry jams, for the month of March is provided below. 1. During March, a total of 52,000 Kgs of mixed strawberries and sugar costing 18,900 were input to the Blending process and the conversion costs incurred during the month amounted to 12,100 2. At the beginning of March there was 2,200 Kgs of ogening invento in the Blendin process. The 0 ening inventory inc uded a 1 ingredients w 'ch cost 61 ut was only 0% complete in terms of conversion and this cost amounted to 512. 3. Over the ten years that it has been in operation W has established that no loss or gain arises in the jams Blending process but that a loss of 10% of materials input is expected to occur in the jams Cooking process. 4. During March, 48,400 Kgs of fully mixed and blended strawberries and sugar were transferred to the Cooking process and 3,300 Kgs of partially mixed and blended ingredients remained in work in progress. The work in progress mixture was Jlly complete in relation to materials but only 50% complete in terms of conversion costs. 5. Conversion costs incurred in the Cooking process during the nancial period amounted to 21,640 6. At the beginning of March, there was 640 Kgs of opening inventory in the Cooking process. This inventory was complete inrelation to materials which cost 631 1'? and 50% complete in terms of conversion costs which total 45. 7. During March, 45,930 Kgs of completed Strawberry Jams was transferred from the Cooking process to the bottling area. 8. The closing work in progress in the Cooking process at the end of March was 520 Kgs. This was fully complete in terms of material and 40% complete in terms of conversion costs
