Question
Ncaute Pottery Cc is well known firm that manufactures utensils, vases and other pottery-ware items from clay obtained from Kavango River. Clay and other materials
Ncaute Pottery Cc is well known firm that manufactures utensils, vases and other pottery-ware items from clay obtained from Kavango River. Clay and other materials are added at the beginning of the process while conversion costs are evenly incurred during the period. The inspection point occurs when conversion is 50% and according to company policy normal spoilage is expected to be 5% of units that pass this point. Spoilage usually occurs during the heating process in the kiln. The company adopts weighted average method to value the pottery ware. The following is relevant information pertaining to the period: Work-in-progress, beginning: 20 000 units which were complete as follows: a) Materials: 100% b) Conversion: 75% Units introduced during the period: 40 000 units, during the period 45 000 units were completed and transferred to packing department. Work-in-progress, ending:10 000 units which were complete as follows: a) Materials: 100% b) Conversion: 65% Related costs as follows: Work-in-progress, beginning: 20 000 units which were complete as follows: a) Materials: N$ 50 000 b) Conversion: N$ 30 000 Cost incurred in the period: a) Materials: N$ 100 000 b) Conversion: N$ 140 000
REQUIRED: | Marks | |
2.1. | Prepare the Production cost report, clearly showing quantity statement, equivalent units, equivalent unit cost and cost allocation statement. | 14.5 |
2.2. | Prepare the Process account. | 5.5 |
TOTAL MARKS | 20 |
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