Question 2 Global Defence is a manufacturer of military equipment. Its Santa Fe plant manufactures the Interceptor Missile under contract to the U.S. government and friendly countries. All interceptors go through an identical manufacturing process. Every effort is made to ensure that all interceptors are identical and meet many demanding performance specifications. The process costing at Santa Fe plant has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Each interceptor passes through two departments: the Assembly Department and the Testing Department. Direct materials are added at the beginning of the process in Assembly. Conversion costs are added evenly during the Assembly Department's process. When the Assembly Department finishes work on each interceptor, it is immediately transferred to Testing. Global Defence uses the weighted-average method of process costing. Data for the Assembly Department for October 2007 are: Physical units Direct (Missiles) Work in process, 1 October 2007* 20 materials R460 000 Conversion costs R120 000 Started during October 2007 Completed during October 2007 80 90 Work in process, 31 October 2007** Total costs added during October 2007 10 R2 000 000 R950 000 *Degree of completion: direct materials ?%; conversion costs 60% **Degree of completion: direct materials ?%; conversion costs 70% Required: 2.1 Prepare the production report for the Assembly Department. 2.2 method. Prepare the production report for the Assembly Department using the FIFO