Better Value produces brass handles for the furniture industry in a four$-$stage process $-$Mixing, Forming,

Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows:

Normal losses are estimated to be $2\frac{1}{2}\%$ of input during the period. Inspection takes place during the processing

operation, at which point imperfect handles are separated from good handles and sold as scrap to local furniture

manufacturers at $$85$ each.

At inspection, $2,000$ handles were rejected as scrap. These units had reached the following degree of completion:

Work$-$in$-$progress at the end of January was $4,000$ handles and had reached the following degree of completion:

Direct materials added and conversion costs are incurred uniformly throughout the process.

Required:

$($a$)$ Compute the equivalent units and cost per equivalent units for direct materials $($From Forming &

Direct materials added$)$ and conversion costs.

$($b$)$ Compute the:

cost of the unexpected losses

total cost of the handles completed and transferred out of the Packaging Department

cost of ending work in process inventory in the Polishing Department

$($c$)$ Complete the Work in Process Inventory $-$ Polishing Process T$-$account, clearly showing the ending

balance.

$($d$)$ Prepare the journal entries for the:

assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to

the Polishing Process

cost of the units completed and transferred out to the Packaging Process

$(5$ marks$)$

$($e$)$ After completing the physical count, it was determined that $30\%$ of the unexpected losses were

because of pilferage. In view of this finding, determine Better Value's true loss associated with the

Polishing Process.