Question 3 (25 marks) Hadiff Ikhwan Ltd is a manufacturer of COVID-19 vaccine. The vaccine process takes place in two production departments: Bottling and Finishing. The results of operating the two processes during the month of October are shown below: Bottling Department Finishing Department Direct material (at costs): Cost of materials per litre Materials used in process at cost $3.00 $60,000 Conversion costs at costs): Direct labour cost incurred Variable overhead incurred Estimated fixed overhead $74,240 $41,360 $70,000 $60,400 $6,920 $100,000 Beginning Working in Progress (at costs): Materials used Direct labour cost incurred Variable overhead incurred Estimated fixed overhead Transferred-in costs $0 $7,000 $3,000 $5,000 $0 $0 $4,200 $4,500 $12,300 $11,000 Further information 1. Bottling Department Direct materials are added at the beginning of the production process and conversion costs occur uniformly in the Bottling Department. It is considered normal for 10% of the total input of materials in the bottling process to be defective. The spoiled litres were detected during inspection of the finished units at the end of the process. Work in process (WIP) at the beginning of bottling process is 4,000 units and 50% complete for conversion costs. The closing WIP of bottling process is 2,000 units, 80% completion with respect to conversion costs. 2. Finishing Department The WIP at the beginning of finishing process is 3,000 units and 50% complete for conversion costs. Direct materials in the Finishing Department are added when the process reach 80% completion stage. The conversion costs are uniformly incurred throughout the process. The closing WIP of finishing process is 4,000 units, 60% completion with respect to conversion costs. Losses are not expected in the finishing process. The company is using the Weighted Average (WA) method of process costing. PART A Required: (Round up the unit costs to two decimal places): (a Determine the total cost per equivalent unit for the Bottling Department for the month of October (b) Calculate the cost of good completed and transferred from the bottling process to finishing process. Calculate the cost of ending inventory for bottling process in October 30. (d) Prepare a journal entry to transfer the cost from the bottling to finishing processes. (5 + 3 + 3 + 2 = 13 marks) DADT D PART B Required: (Round up the unit costs to two decimal places): a Determine the total cost per equivalent unit for the Finishing Department for the month of October. (6) Calculate the cost of good completed and transferred from the Finishing Department. Calculate the cost of ending inventory for finishing process in October 30. (d) Prepare a journal entry to transfer the cost of COVID-19 vaccine from the Finishing Department. (5 + 2 + 3 + 2 = 12 marks) Question 3 (25 marks) Hadiff Ikhwan Ltd is a manufacturer of COVID-19 vaccine. The vaccine process takes place in two production departments: Bottling and Finishing. The results of operating the two processes during the month of October are shown below: Bottling Department Finishing Department Direct material (at costs): Cost of materials per litre Materials used in process at cost $3.00 $60,000 Conversion costs at costs): Direct labour cost incurred Variable overhead incurred Estimated fixed overhead $74,240 $41,360 $70,000 $60,400 $6,920 $100,000 Beginning Working in Progress (at costs): Materials used Direct labour cost incurred Variable overhead incurred Estimated fixed overhead Transferred-in costs $0 $7,000 $3,000 $5,000 $0 $0 $4,200 $4,500 $12,300 $11,000 Further information 1. Bottling Department Direct materials are added at the beginning of the production process and conversion costs occur uniformly in the Bottling Department. It is considered normal for 10% of the total input of materials in the bottling process to be defective. The spoiled litres were detected during inspection of the finished units at the end of the process. Work in process (WIP) at the beginning of bottling process is 4,000 units and 50% complete for conversion costs. The closing WIP of bottling process is 2,000 units, 80% completion with respect to conversion costs. 2. Finishing Department The WIP at the beginning of finishing process is 3,000 units and 50% complete for conversion costs. Direct materials in the Finishing Department are added when the process reach 80% completion stage. The conversion costs are uniformly incurred throughout the process. The closing WIP of finishing process is 4,000 units, 60% completion with respect to conversion costs. Losses are not expected in the finishing process. The company is using the Weighted Average (WA) method of process costing. PART A Required: (Round up the unit costs to two decimal places): (a Determine the total cost per equivalent unit for the Bottling Department for the month of October (b) Calculate the cost of good completed and transferred from the bottling process to finishing process. Calculate the cost of ending inventory for bottling process in October 30. (d) Prepare a journal entry to transfer the cost from the bottling to finishing processes. (5 + 3 + 3 + 2 = 13 marks) DADT D PART B Required: (Round up the unit costs to two decimal places): a Determine the total cost per equivalent unit for the Finishing Department for the month of October. (6) Calculate the cost of good completed and transferred from the Finishing Department. Calculate the cost of ending inventory for finishing process in October 30. (d) Prepare a journal entry to transfer the cost of COVID-19 vaccine from the Finishing Department. (5 + 2 + 3 + 2 = 12 marks)
