Hi,

Please help me with this managerial accounting question. (Cost Accounting)

You may refer to Question 1 only.

Question 1 Good cans completed from Bottling Process 720,000 cans Spoiled units (bottling) 48,000 cans Happy Drink Lid is the licensed bottler of a reputable overseas beverage company for Lost units (mixing) 4.000 litres Singapore. It imports concentrates. mixes them with other ingredients and bottles the resulting beverage under the brand name "Refresh" for sales in Singapore. None of the opening work in process and closing work in process had entered the Bottling In the Mixing Process, other ingredients (water, flavouring agents, sugar and carbon dioxide) Process. The units in the closing work in process were on average 60% complete as to the are added to the concentrates. These are then transferred to the Bottling Process where the Mixing Process; none had entered the Bottling Process. beverage is then bottled into standard 250ml cans and transferred to the finished goods store Required: for deliveries to the customers. Concentrates are issued at the beginning of the Mixing Process. The other mixing costs (a) Using the four-step approach: (including other ingredients) are incurred evenly throughout that process. Similarly, cans are (i) added at the beginning of the Bottling Process while the other costs are incurred evenly. Calculate the closing work in process for the Mixing Process in litres and for the Bottling Process in cans. Overhead is applied into the mixing and the bottling, at a rate of 50% and 100% of direct labour (7 marks) cost respectively. (ii) Calculate the number of equivalent units processed in August, distinguishing It is considered normal for some of the beverage to be "lost" due to evaporation during mixing between Mixing Process and Bottling Process. and some cans of beverage to be rejected during bottling. Quality control inspection is applied (9 marks) at the end of the Bottling Process to determine whether completed products are safe for (iii) consumption. Those canned drinks that are deemed unsafe are rejected and considered as spoilt. Calculate the costs per equivalent unit for each product cost category processed in August for the Mixing Process and the Bottling Process, the costs of beverage It is acceptable that spoilage is normal if rejected cans of beverage are no more than 2% of the per litre transferred from the Mixing Process to the Bottling Process, the cost of each can of bottled beverage transferred from the Bottling Process, the costs of completed good cans of beverage produced. abnormal spoilage, lost and closing WIP. The loss of the beverage in the Mixing Process is assumed to take place at the end of the (28 marks) process. The cost of this loss is written off as a loss of the period in which it occurs. This cost is measured at the cost of the concentrates plus the costs of the Mixing Process, but no bottling (b) Prepare and show all the necessary journal entries. (6 marks) cost is charged Happy Drink Lid uses FIFO system of costing. Question 2 The following data summarize the firm's activities during August: To drive top performance in an organization, Zimmerman noted that it is important to keep the Opening WIP organizational architecture balanced. This would mean that the three activities namely (i) partition of decision rights, (1i) measurement of performance, and (iii) reward of performance Concentrates $50,000 must be "aligned". Unfortunately mismatch among these three legs are common occurrences. Other ingredients $9.000 Direct labour cost (mixing) to 31 Jul $12,000 Required: 30% of conversion done 100,000 litres Costs incurred during August Select a company you are familiar with or one you are currently working in, or one with Concentrates $112,000 information publicly available. Using your own words as much as possible, and in not more $72,840 than 1,200 words (in total): Other ingredients Cans $76,800 (a) Describe the industry the chosen company is operating in, and an outline of the Direct labour cost (mixing) $97,120 background, nature of business, the industry and the environment it is operating in, its Direct labour cost (bottling) $153,600 products/services, etc. Production data for August (5 marks) Units started in Mixing Process 224,000 litres