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Q2. ABC Company is a manufacturing company that produces biscuits covered with chocolates. The company has two stages; manufacturing stage where they add the biscuits

Q2. ABC Company is a manufacturing company that produces biscuits covered with chocolates. The company has two stages; manufacturing stage where they add the biscuits at the beginning of the production. Then, they add chocolate when the production is ready by 60%. Second stage is the packaging stage where DM is added at the beginning of the process. The following is data of production and costs for both stages for Jan 2020 period:

Data

Units

Biscuits

Chocolate

CC

Beginning inventory (70%)

120,000

$18,000

$30,000

$8,400

Added units

600,000

$96,000

$132,000

64,620

Ending Inventory (35%)

150,000

Data

Units

DM

CC

Transferred C

Beginning inventory (50%)

75,000

$11,250

$3,000

$36,000

Added units

$91,200

$52,875

Ending Inventory (60%)

50,000

Required:

  1. Prepare the stage report for the manufacturing and Packaging stages using, a) WA, and B) FIFO
  2. Journalize the required entry to transfer the completed units and prepare the ledger of the manufacturing stage and Packaging stage.

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