Question 1 Process Costing (15 marks)

BYTB is leasing for a year a manufacturing plant in Southern NSW that specifically manufactures meringues. The plant has the ability to manufacture meringue in various sizes and colours. Everything from weighing, mixing, and baking is completed on a production line and then carefully packaged by hand into boxes.

All the raw materials are added at the commencement of the process except for decorations which are added when the manufacturing process is 85% complete. For the purposes of accounting the conversion costs of manufacturing are assumed to occur evenly across the whole of the production cycle.

The information below relates to the manufacturing of a large multicolour meringue with decorations during the month of March:

Work in process 01/03/2022		12500
	Stage of completion	Value
Raw materials	100%	$ 60,000
Decorations	100%	$ 75,250
Conversion	75%	$ 75,000
Work in process - 31/03/2022	11100
WIP - 31/03/2022 complete	70%
Meringues commenced in March	360000
Costs incurred
Raw materials	$ 160,000
Decorations	$ 18,000
Conversion	$ 320,000

1. Using the Weighted Average Cost Method what is the cost value of closing WIP and the cost value of goods transferred out during the period.
2. Using First in First Out (FIFO) method what is the cost value of closing WIP and the cost value of goods transferred our during the period.