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Cepat Sdn. Bhd. (CSB) produces a liquid fertiliser for local farmers. The fertiliser is made in two consecutive production processes. The cost accountant has

 

Cepat Sdn. Bhd. (CSB) produces a liquid fertiliser for local farmers. The fertiliser is made in two consecutive production processes. The cost accountant has provided the following information for the coming month. There were no opening or closing inventories at the beginning and end of either process. All losses are sold to a reprocessing company. Direct materials (15,000 litres) Direct labour Production overheads Scrap value of losses per litre Output in litre Normal loss as % of total inputs Required: (a) (b) (c) Prepare the following accounts: (i) Filtering RM 15,000 4,000 1,370 0.80 (ii) 13,000 7% Packaging RM NIL 5,000 3,476 0.90 the Filtering process account; (6 marks) the Packaging process account; (6 marks) (iii) the normal loss account. (5 marks) Explain ANY TWO (2) reasons why job costing is an inappropriate costing method for Cepat Sdn. Bhd. (2 marks) 12,500 4% Explain TWO (2) challenges that Cepat Sdn Bhd. will face when the process costing method is used to determine the output cost of the liquid fertilizer. (6 marks) [Total: 25 marks]

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