QUESTION $2[50$ MARKS$]$

ZimbaChippi $($Pty$)$ Ltd produces healthy alternative snacks. All materials are added at the beginning

of the process and conversion costs are incurred evenly throughout the process. A quality inspection

is conducted $33\%$ of the way through production at which point $2\%$ of all units started are usually

found to be defective. During the year $5510$ units were found to be defective.

The following relates to the current year:

Direct labour worked $7,800$ hours at R$25$ per hour.

Opening Raw Materials R$55800$

Purchased Raw Materials R$185000$

Closing Raw Materials R$74500$

Opening Work in Progress $0$

Closing Work in Progress $(65\%$ complete$)10590$

Units Started $48100$

Units Completed $32000$

Normal capacity is $42,000$ completed units, while the total fixed costs amounted to R $480000.$ The

company uses a FIFO costing system.

Required

a$)$ Calculate the cost per equivalent unit $(29)$

b$)$ Calculate closing WIP $(21)$

Total