KS Chemicals manufactures and sells liquid soap in western Jamaica. The company uses a process costing system where all materials to produce the liquid soap are added at the start of the production process. The opening inventory of a process is 25,000 units which are deemed 80% completed with respect to direct labour and overheads. Opening material cost is \$1,000,000, while direct labour and production overheads are $800,000 and $1,100,000 respectively. During the period 75,000 units were started. Material cost for the period was $1,500,000. Meanwhile, direct labour and production overheads incurred were \$1.900.000 and \$1.600.000 respectively. It was ascertained that there were 20,000 units at the end of the period which are 50 complete for labour and production overheads. Management also indicated that resources are used evenly over the production process. Required: a) Using the weighted average cost flow assumption: determine the equivalent unit cost for direct material and conversion cost. (10 marks) b) Prepare the process account using the weighted average. Hint: the account should include units and values. (5 marks) c) Using the FIFO cost flow assumption: determine the equivalent unit cost for direct material and conversion cost. (10 marks) d) Prepare the process account using the FIFO. Hint: the accoumt should include units and values. (5 marks) KS Chemicals manufactures and sells liquid soap in western Jamaica. The company uses a process costing system where all materials to produce the liquid soap are added at the start of the production process. The opening inventory of a process is 25,000 units which are deemed 80% completed with respect to direct labour and overheads. Opening material cost is \$1,000,000, while direct labour and production overheads are $800,000 and $1,100,000 respectively. During the period 75,000 units were started. Material cost for the period was $1,500,000. Meanwhile, direct labour and production overheads incurred were \$1.900.000 and \$1.600.000 respectively. It was ascertained that there were 20,000 units at the end of the period which are 50 complete for labour and production overheads. Management also indicated that resources are used evenly over the production process. Required: a) Using the weighted average cost flow assumption: determine the equivalent unit cost for direct material and conversion cost. (10 marks) b) Prepare the process account using the weighted average. Hint: the account should include units and values. (5 marks) c) Using the FIFO cost flow assumption: determine the equivalent unit cost for direct material and conversion cost. (10 marks) d) Prepare the process account using the FIFO. Hint: the accoumt should include units and values
