Question
QUESTION 4 (20 Marks) Noordheuwel Manufacturers production system consists of two consecutive processes: process 1 and process 2. The output from process 1 is transferred
QUESTION 4 (20 Marks) Noordheuwel Manufacturers production system consists of two consecutive processes: process 1 and process 2. The output from process 1 is transferred to process 2 and the output of process 2 is sent to the packaging department. The information provided below relates to process 2 of Noordheuwel Manufacturers production system in January 2023: INFORMATION: R Transfer from process 1 400 kg at a cost of 43 000 Materials added 3 000 kg 122 400 Conversion costs 46 880 Output to finished goods 2 800 kg Output scrapped 400 kg Normal loss 10% of materials added in the period The scrapped units were complete in materials added but only 50 per cent complete in respect of conversion costs. All scrapped units have a value of R40 each. There was no opening work in progress, but 200 kg were in progress at the end of the month, at the following stages of completion: - 80 per cent complete in materials added and - 40 per cent complete in conversion costs. REQUIRED Write up the following accounts for the process (show all calculations leading to the three accounts): 4.1 Process 2 account. (14 Marks) 4.2 Scrap account. (3 Marks) 4.3 Abnormal account. (3 Marks)
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