QUESTION 2 60 marks Part A Cultiva Ltd. provides the costs for its single product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process Percent Complete Physical units 30,000 97,500 97,500 Materials Conversion 80% 40% Work in process, August 1 Units started during August Units completed and transferred out during August in process, August 31 30,000 50% 30% Total $339,500 $430,000 $769,500 Conversion $220,000 $119,500 $230,000 $200,000 $450,000 $319,500 Direct Materials Work in process, August 1 Costs incurred during August Total costs to account for Required Using weighted-average process costing in completing the following requirements (a) Determine the equivalent units for August. (b) Compute the costs per equivalent unit. (c) Compute the cost of goods completed and transferred out during August (d) Compute the cost remaining in the work in process inventory on August 31, and total 6 marks 6 marks 6 marks 10 marks cost to be accounted for (e) Prepare a journal entry to record the transfer of the cost of goods completed and transferred out. 2 marks Part B Albatross Workwear Clothing Ltd produces and distributes Workwear in Australia with a selling price of $25 The company is now preparing its budget for July to August 2017. In making the clothes (Finished Goods), it needs 2 metres of direct materials. In keeping production and sales moving smoothly, the company has the lowing requirements I. The finished goods inventory on hand at the end of each month must be equal to 5,000 units of clothes plus 20% of the next month's sales. The finished goods inventory on 30 June 2017 is budgeted to be 12,000 units The direct materials inventory on hand at the end of each month must be equal to 40% of the following month's production needs for direct materials. The direct materials inventory on 30 June 2017 is budgeted to be 54,000 metres. Budgeted purchase price of Direct Materials is $8 per metre The company maintains no work in process inventories ll. III. The company's projected sales for the last six months of the year follows Month Units August September Octobe November December 45,000 50,000 50,000 60,000 65,000 60,000 Required: Prepare the following budgets for the period from July to August 2017 (show your working) (a) (b) (c) (d) Sales budgets in units and dollars Production budgets in units Direct material usage budgets in metres Direct material purchase budgets in dollars and metres 6 marks 6 marks 6 marks 12 marks