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? Question 2 (34 marks) Windhoek Dairy Products (WDP") processes milk to produce three products, Cheese (CS), Butter (BT) and Cream (CM) from one process. WDP is based in Windhoek. The following are the resource requirements of one process in May 2020: Milk (Note 1 & 4) 20 000 liters Direct Labour (Note 2) 5 000 hours Other Manufacturing overheads (Note 3) Notes 1. The milk is sourced from various farms based in farms in Dordabis, Gobabis and Mariental. The suppliers price their milk at N$3 per litre bought at the farm. WDP incurs a further N$1 per litre to transport the milk to their Windhoek factory. 2. Direct labour is paid at N$60 per hour and overtime (when worked) is paid at a time and a half. Due to increase in demand during the period when the country was in lockdown, employees had to work 500 of the 5 000 hours as overtime in May 2020. 3. Other manufacturing overheads excludes indirect labour and amounted to N$85 000 in the month of May 2020. 4. Milk is considered a direct material for the process. However, the company also require some preservatives that cost N$10 000 for the period under consideration. 5. The output of CS, BT and CM normally emerge in the ratio of 4:6:8 respectively. A by- product (Fat) is estimated at 10% of input milk and it is sold to a local small business for N$20 per kilo. It is company policy to deduct the net realisable value of by-products from the total joint process costs before allocating the joint process costs to products CS, BT and CM. 6. The finished products are sold at the following prices: Product N$ CS per kilo 100 BT per kilo 110 CM per kilo 130 Page 11 of 16 Question 3 (29 marks) Tulipamwe Windhoek ("TW") operates a process costing system to manufacture honey. The company buys raw honey from the farmers concentrated in the Zambezi region of Namibia. The process involves extracting raw-honey and filtering it to remove all forms of impurities (e.g. wax and bee stingers). The final product known as the "Honey Dew" is packaged into 500 grams (g) containers and sold to the local market. Raw honey is the only direct material required for the process. Raw honey required for the HoneyDew is added at the beginning of the process. Conversion costs are incurred evenly throughout the process. A normal loss is detected at inspection point which occurs when the process is 70% complete. The normal loss is 5% of the input raw honey that reaches this point. All losses in the process are sold at N$2 per kilo. One (1) kilo of the raw-honey adjusted for losses and/or gains yields one (1) kilogram of Honey Dew. Page 12 of 16 #24SEVENBEER OX ? Question 2 (34 marks) Windhoek Dairy Products (WDP") processes milk to produce three products, Cheese (CS), Butter (BT) and Cream (CM) from one process. WDP is based in Windhoek. The following are the resource requirements of one process in May 2020: Milk (Note 1 & 4) 20 000 liters Direct Labour (Note 2) 5 000 hours Other Manufacturing overheads (Note 3) Notes 1. The milk is sourced from various farms based in farms in Dordabis, Gobabis and Mariental. The suppliers price their milk at N$3 per litre bought at the farm. WDP incurs a further N$1 per litre to transport the milk to their Windhoek factory. 2. Direct labour is paid at N$60 per hour and overtime (when worked) is paid at a time and a half. Due to increase in demand during the period when the country was in lockdown, employees had to work 500 of the 5 000 hours as overtime in May 2020. 3. Other manufacturing overheads excludes indirect labour and amounted to N$85 000 in the month of May 2020. 4. Milk is considered a direct material for the process. However, the company also require some preservatives that cost N$10 000 for the period under consideration. 5. The output of CS, BT and CM normally emerge in the ratio of 4:6:8 respectively. A by- product (Fat) is estimated at 10% of input milk and it is sold to a local small business for N$20 per kilo. It is company policy to deduct the net realisable value of by-products from the total joint process costs before allocating the joint process costs to products CS, BT and CM. 6. The finished products are sold at the following prices: Product N$ CS per kilo 100 BT per kilo 110 CM per kilo 130 Page 11 of 16 Question 3 (29 marks) Tulipamwe Windhoek ("TW") operates a process costing system to manufacture honey. The company buys raw honey from the farmers concentrated in the Zambezi region of Namibia. The process involves extracting raw-honey and filtering it to remove all forms of impurities (e.g. wax and bee stingers). The final product known as the "Honey Dew" is packaged into 500 grams (g) containers and sold to the local market. Raw honey is the only direct material required for the process. Raw honey required for the HoneyDew is added at the beginning of the process. Conversion costs are incurred evenly throughout the process. A normal loss is detected at inspection point which occurs when the process is 70% complete. The normal loss is 5% of the input raw honey that reaches this point. All losses in the process are sold at N$2 per kilo. One (1) kilo of the raw-honey adjusted for losses and/or gains yields one (1) kilogram of Honey Dew. Page 12 of 16 #24SEVENBEER OX