Question 1) The following information relates to the goods in process No. 2 of Mustafa Manufacturing for the month of November 2004:

Goods in process inventory (40,000 units 100% complete as to material and

75% complete as to conversion cost) 774,000

Cost of 140,000 units transferred in from process No. 2 during November 1,400,000

Manufacturing cost added in process No. 2, during November ?

Direct material 560,000

Direct labour 250,000

Factory overhead 750,000

3,734,000

On Nov. 30, 50,000 units are still in process No. 2 which are 100% complete as to material and 50% complete as to conversion cost.

REQUIRED

a.Compute the following:

i.Equivalent units of production.

ii.Cost per unit.

iii. Cost of units transferred out of finished goods.

b. General Journal entries to record:

i.Manufacturing cost added in process No. 2 during Nov.

ii. Transfer of 130,000 units from process No. 2 to finished goods warehouse.

Question 2)

Direct Materials: Manufacturing overhead:

Standard: 4.0 kg at $7.20 per kg Standard: 1.6 hours at $3.60 per hour

Actual: 4.4 kg at $6.70 per kg Actual: 1.4 hours at $4.30 per hour

Direct labor:

Standard: 1.6 hours at $9.00 per hour

Actual: 1.4 hours at $9.70 per hour

Calculate:

a)Materials quantity and price variance

b)Labor efficiency and rate variance