Question
oductioncostsaresetoutbelow:Openingwork-in-progresscostsMaterialR10000CurrentyearcostsR52500Materialbottles ? ConversioncostsR22850R80500AbottlecostsR7.50andisaddedwhentheprocessis95%complete.Eachbottlecontains1kgofjam.Theweightofthejambottle isinsignificant.Basedonpastexperienceandmanagement'sknowledgeoftheproductionprocess,itisregardedasnormalif10% ofallunitsinspectedareofinferiorqualityasaresultofjambottlesnotreachingthedesiredtemperature.Theinspectionpointisat theendoftheprocess.Inferiorqualityjamisnotsoldtothepublic,butissoldtoVhembeFoodsworkersatasellingpriceofR2per bottleofpreservedjam.Theabnormallossunitsdonotshareinthenormallossallocation.VhembeFoodsLimitedusesthefirst-in-first-outstockvaluation method.
oductioncostsaresetoutbelow:Openingwork-in-progresscostsMaterialR10000CurrentyearcostsR52500Materialbottles ? ConversioncostsR22850R80500AbottlecostsR7.50andisaddedwhentheprocessis95%complete.Eachbottlecontains1kgofjam.Theweightofthejambottle isinsignificant.Basedonpastexperienceandmanagement'sknowledgeoftheproductionprocess,itisregardedasnormalif10% ofallunitsinspectedareofinferiorqualityasaresultofjambottlesnotreachingthedesiredtemperature.Theinspectionpointisat theendoftheprocess.Inferiorqualityjamisnotsoldtothepublic,butissoldtoVhembeFoodsworkersatasellingpriceofR2per bottleofpreservedjam.Theabnormallossunitsdonotshareinthenormallossallocation.VhembeFoodsLimitedusesthefirst-in-first-outstockvaluation method.
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