Question 3 Holly Oil oil is processed in two refining department is transferred to the packaging department at the start of the packaging process. Conversion Company manufactures motor oil and uses a process costing system. The motor departments: refining and packaging. Oil that is refined in the added evenly throughout the packaging process. manufactured and is generated total revenue of $27,982,500. Each sold 350,000 packets of mot packet ofmotorolcontains four4) litres. LEX to oo At the end of June 2017, there were 40,000 litres (WIP) of the packagingdepartment. This wlP is 100% complete with re and 50% complete with respeot to conversion costs. There was oening WIPin the refining department at the end of June 2017. The following table summarises the costs he oil remaining in work in process material, incurred in each department in June: Packaging Refining $7,700,000 1,800,000 2,200,000 1,420,000 Direct material Direct labour Manufacturing overhead 9,540,000710,000 Total $19,440,000 $3,930,000 Required: (a) Using FIFO process costing, compute equivalent units of production for Holly Oil in the packaging department and calculate the costs per packet in June 2017. (Clearly show the costs per equivalent unit to the nearest cent for each cost category). What is the profit margin per packet of motor oil? (16 marks) Based on your computations in (a), write journal entries to transfer the manufacturing costs from the refining department to the packaging department (b) and record the costs of goods completed and sold in June 2017 (8 marks)