Question 2Process Costing(15 marks)

Worldwide Pictures has a manufacturing plant in New York that manufactures a limited edition "Accounting Calculator" for the movie.The manufacturing of the calculator is completed on a production line and is packaged by hand in a specially shaped tin that includes an authenticity certificate.Previous models of the calculator have been highly sought after by accountants.

All the raw materials are added at the commencement of the process.The tins are introduced when the manufacturing process is 70% complete.For the purposes of accounting the conversion costs of manufacturing are assumed to occur evenly across the whole of the production cycle.

The information below relates to the manufacturing of "The Accountant Calculator" during the month of November:

Work-in-process: November 1, 2020

8500

Stage of completion Value

Raw materials 100% $170,000

Tins 100% $63,750

Conversion 65% $260,000

Work-in-process: November 30, 2020

15,300

60% complete

Calculators commenced during November

36,000

Costs incurred during production:

Raw materials $160,000

Tins $82,500

Conversion $350,000

Required:

1.Using the Weighted Average Cost Method, determine the cost value of closing WIP and the cost value of goods transferred out during the period.(7 marks)

2.Using the First in First Out (FIFO) method determine the cost value of closing WIP and the cost value of goods transferred out during the period.(8 marks)