Home & Gardening Depot makes decorative flower pots using three consecutive processes: Moulding, Baking & Spraying. Costs incurred in the Baking Department during June are summarized as follows:

June 1 bAL $0	...........................................
From Moulding 2000 665,200
Direct Material Added 195,200
Direct Manufacturing wages 204,240
Manufacturing Overhead Applied 306,360

Normal losses are estimated to be 5% of input during the period. Inspection takes place during the processing operation, at which point bad units are separated from good units and sold as scrap at $420 each.

At inspection, 300 units were rejected as scrap. These units had reached the following degree of completion:

From Moulding 100%

Direct materials added 50%

Conversion costs 40%

Work-in-progress at the end of June was 500 units and had reached the following degree of completion:

From Moulding 100%

Direct materials added 60%

Conversion costs 40%

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

Required:

(a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs.

(b) Calculate the: - Total cost of units completed and transferred out to the Spraying department - Cost of abnormal losses - Cost of ending work-in-process inventory in the Baking department

(c) Prepare Home & Gardening Depots Work-In-Process Inventory Baking Department T-account, clearly showing the ending balance.

(d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages incurred and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of goods completed and transferred to finished goods.

(e) Given that 25% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Home & Gardening Depots true loss.

(f) Briefly explain the difference between job costing & process costing, giving examples of industries in which both methods of product costing may be used.