Question 2 (25 marks) Golden Tiger Limited (GTL) has focused on the production of surgical masks. Data have been provided by GTL, which uses the weighted average method in its process costing system. The following data concern the operations of the company's first processing department for February 2022 Physical Percent Complete Units Materials Conversion Cost Work in process, 1 February 5,000 70% 55% Units started into production during February 42,000 Units completed during February and transferred to the next department 45,000 Work in process, 28 February 2,000 90% 40% According to the company's records, the conversion cost in beginning work in process inventory was $68,000 and $29,000 for materials and conversion costs respectively. Additional materials of $400,000 and conversion cost of $200,000 were incurred in the department during the month. Required: Using the weighted average method, for the month of February: (a) Calculate the number of equivalent units of production for materials and conversion costs. (2 marks) (b) Calculate the total cost per equivalent unit. (2 marks) (e) Determine the total cost of units transferred out of the department. (3 marks) (d) Determine the total cost of ending work-in-process inventory. (3 marks) (@) Prepare a cost reconciliation report for each process and in total. (3 marks) (1) Explain the cause of underapplied or overapplied overhead. (3 marks) (g) After the Chinese New Year of 2022, Hong Kong faces its worst outbreak of the pandemic. In the recent weekly meeting, the Marketing Director suggests donating surgical masks to grassroots families to boost company's image. The Sales Director, on the other hand, recommends taking the opportunity of increase in public demand to raise the selling price in order to maximize company's profits. As the CEO of GTL, how would you decide on which proposal to choose? (9 marks) Question 2 (25 marks) 55% Golden Tiger Limited (GTL) has focused on the production of surgical masks. Data have been provided by GTL, which uses the weighted average method in its process costing system. The following data concern the operations of the company's first processing department for February 2022 Physical Percent Complete Units Materials Conversion Cost Work in process, 1 February 5,000 70% Units started into production during February 42,000 Units completed during February and transferred to the next department 45,000 Work in process, 28 February 2,000 90% 40% According to the company's records, the conversion cost in beginning work in process inventory was $68,000 and $29,000 for materials and conversion costs respectively. Additional materials of $400,000 and conversion cost of $200,000 were incurred in the department during the month. Required: Using the weighted average method, for the month of February: (a) Calculate the number of equivalent units of production for materials and conversion costs. (2 marks) (b) Calculate the total cost per equivalent unit. (2 marks) (C) Determine the total cost of units transferred out of the department (3 marks) (d) Determine the total cost of ending work-in-process inventory (3 marks) (e) Prepare a cost reconciliation report for each process and in total. (3 marks) (1) Explain the cause of underapplied or overapplied overhead. (3 marks) (9) After the Chinese New Year of 2022, Hong Kong faces its worst outbreak of the pandemic. In the recent weekly meeting, the Marketing Director suggests donating surgical masks to grassroots families to boost company's image. The Sales Director, on the other hand, recommends taking the opportunity of increase in public demand to raise the selling price in order to maximize company's profits. As the CEO of GTL, how would you decide on which proposal to choose? (9 marks) [Total for Question 2: 25 marks
