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ABS Plastic Factory specializes in manufacturing of ABS plastic cups and uses normal costing to allocate overhead cost based on the 120% of labour cost.
ABS Plastic Factory specializes in manufacturing of ABS plastic cups and uses normal costing to allocate overhead cost based on the 120% of labour cost. Production process requires 100% of materials at the start of production. The following are the production and cost data of the company in March 2023. Note: The company uses weighted average method for inventory costing. Required: a) Compute the equivalent units and costs per equivalent unit for materials, labour, and overhead for the month. (7 marks) b) Determine the amount of cost that should be assigned to the finished goods and ending WIP inventories. (8 marks) c) What is the major differences between weighted average method and FIFO method in calculation of equivalent unit. (2 marks) d) Calculate the equivalent units for materials, labour and overhead by using FIFO method
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