Question 2

DML Ltd manufactures cement for the construction industry in Ghana. Provide below are data relating to kilograms of cement processed through the Mixing Department in June, the first department in the manufacturing process.

	Kilograms of Cement	Percentage Completed
		Materials	Conversion
Work in process, June 1	90,000	75%	35%
Work in process, June 30	60,000	50%	15%
Started into production during June	310,000

Cost data relating to cement production in June are provided below:

Material cost in work in process inventory, June 1 GHS300,000

Conversion cost in work in process inventory, June 1 GHS210,000

Material cost added during June GHS1,820,000

Conversion cost added during June GHS680,000

Required:

On the assumption that the firm uses the weighted average method in its process costing system,

1. Compute the equivalent units of production for June
2. Compute cost per equivalent unit for materials and conversion
3. Compute the cost of units transferred and the cost of ending work in process inventory
4. Prepare a cost reconciliation report for the Mixing Department for June