Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

John Ltd. manufactures a product which passes through 2 departments, Boiling and Cooling. Processing first begins in the Boiling department. After boiling of all the

John Ltd. manufactures a product which passes through 2 departments, Boiling and

Cooling.

Processing first begins in the Boiling department. After boiling of all the materials

have been completed, the product is transferred to Cooling department. In the Cooling

department, further materials are added when processing is 25% complete (all the

materials in the Cooling department are added at this point only).

Conversion costs are incurred uniformly throughout the process in the Cooling

department.

Work in process in the Cooling Department as at 1 Nov amounted to 50,000 units

(40% complete). The costs included in these units are as follows :

Boiling Department $900,000

Cooling Department :

- Direct materials $740,000

- Direct labour $210,000

- Overheads $?

During the month of Nov, 140,000 units were completed in the Cooling Department

and transferred to finished goods inventory. Units transferred in from Boiling in Nov

were charged at $19 per unit. Cooling departments costs in Nov were :

Materials added $2,850,000

Direct labour $2,225,000

Overheads $?

Overhead is allocated on the basis of 110% of direct labour cost.

At the end of the month, 60,000 units were still in process in Cooling. These were

estimated to be 30% complete.

Required :

(a) Prepare the Cooling Department production cost report for the month of Nov 2015

using (round up to 2 decimal place) :

(i) Weighted Average method

(ii) FIFO method

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Managerial Accounting

Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

5th Canadian edition

77429494, 1259105709, 1260480798, 978-1259105708

More Books

Students also viewed these Accounting questions