On October 1st, Pano bakeries opened a plant for making frozen pastries that customers can finish off in the oven at home. Data for the first two months of operations are shown below: October (units) November (Units) 2,700 3,900 Units started in month Units completed in month 2,400 2,400 Closing work in progress 1,500 1.800 () (E) Variable costs Materials 58,500 48,600 Labour 36,000 21.000 Fixed costs 63,000 63,000 Sales revenue 112,800 120,000 On October 31st, the units in closing work in progress were 100% complete for materials and 80% complete for labor. On November 30th, the units in closing work in progress were 100% complete for materials and 50% complete for labor. The company's policy for the valuation of work in progress is under review. The board of directors decided that two alternative profit and loss statements should be prepared for October and November. One statement would value work in progress on a weighted average cost basis and the other would adopt a first in, first out basis. Fixed costs would be absorbed in proportion to actual labor costs in both cases. Answer the following questions: 1. What is process costing 2. Prepare the two alternative profit and loss statements for October and November