QUESTION 2B (TOPIC 5)

Russa Sdn Bhd (RSB) uses process costing system for its production. The company produces a drink extract from bird nest that passes through TWO (2) processes: Blending and Packaging. In the Blending Department, various ingredients such as bird nest extraction, reverse osmosis water and stevia leaf extraction are blended together at the beginning of the process. Direct material is added in the Packaging Department when the process reaches 80 percent of completion. Conversion costs are added continuously throughout the process. Manufacturing overhead is applied at the rate of 150 percent of direct labor cost for both processing departments. The following table summarizes the production activity and cost for April 2018: