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Coastal Brewers manufactures fruit infused beers for local as well as international consumption. The Beer is prepared through two processes. Process I involves Blending and

Coastal Brewers manufactures fruit infused beers for local as well as international consumption. The Beer is prepared through two processes. Process I involves Blending and Fermentation and Process 2 involves Canning and Labeling for market. The packing of finish product cost is minimal in relation to the other processes and is not treated as a separate process. All beer related direct materials are added at the beginning of process 1. The information presented below is for process 1. The organization uses the Weighted Average method for inventory valuation.

Physical units (liters)

Direct Materials

Conversion Cost

Work in process July 01. Degree of completion materials100%, conversion 50%

500,000

$100,000

$160,000

Started in July

4,500,000

Normal spoilage 3% of inputs

Good units completed and transferred out in July

?

Work in process July 31. Degree of completion, 100,% conversion 60%

400,000

Cost added during July

$ 1,350,000

$ 1,820,000

All spoiled units are 40% complete as to conversion.

200,000 (liters)

The spoiled units result from temperature fluctuations during the fermentation process.

Required

Prepare a process costing work sheet. (25 Marks

Coastal Brewers manufactures fruit infused beers for local as well as international consumption. The Beer is prepared through two processes. Process I involves Blending and Fermentation and Process 2 involves Canning and Labeling for market. The packing of finish product cost is minimal in relation to the other processes and is not treated as a separate process. All beer related direct materials are added at the beginning of process 1. The information presented below is for process 1. The organization uses the Weighted Average method for inventory valuation.

Physical units (liters)

Direct Materials

Conversion Cost

Work in process July 01. Degree of completion materials100%, conversion 50%

500,000

$100,000

$160,000

Started in July

4,500,000

Normal spoilage 3% of inputs

Good units completed and transferred out in July

?

Work in process July 31. Degree of completion, 100,% conversion 60%

400,000

Cost added during July

$ 1,350,000

$ 1,820,000

All spoiled units are 40% complete as to conversion.

200,000 (liters)

The spoiled units result from temperature fluctuations during the fermentation process.

Required

Prepare a process costing work sheet. (25 Marks

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