Question 4 Pace Limited produce fitness trackers. Following a recent competitive tendering process, they have agreed terms with a new supplier for the GPS processors system used in each tracker. This resulted in confusion within the procurement department resulting in no opening stock of processers on 1 August 2016. However, at the end of the month there was a noticeable quantity of processors in stock due to an error made by the ordering clerk. The following stores movements were noted during August 2016: Cost Per unit Stores Movements - August 2016 1 August - Receipt to Stores 6 August - Receipt to Stores 10 August - Transfers to WIP 16 August - Receipt to Stores 29 August - Transfers to WIP 4.25 4.75 Units 3,000 4,500 6,000 7,500 4,500 5.25 Pace Ltd's factory is operating at full capacity. Eight production line operatives were in employment for the month of August. The normal working week for production line operatives is 38 hours and they are paid 798 per week. Assume four working weeks per month. On 5 of August a machine malfunction caused production to stop for a period of four hours. To make up for this lost production, five employees agreed to work eight hours overtime each. Overtime is paid at 1.5 time's normal hourly pay. As Pace Ltd's Junior Management Accountant your responsibilities include advising on inventory management While preparing for a meeting with the auditors, you realise that Pace Ltd has employed the Last In, First Out (LIFO) method of stock valuation for its processors. Concerned about the validity of the stock valuation, you have informed your line manager that LIFO is an unacceptable method of valuing stocks for the preparation of annual accounts. Your line manager has asked you not to mention this concern to anyone, particularly the company's auditors. Requirement: (a) Calculate the total cost of issues of processers to Work in Progress during August 2016 and the Closing Stock value of processers as at 30 August 2016 using the following valuation bases: 0 Last in First Out (LIFO); (H) Weighted Average. 10 marks (b) Calculate the total wage cost for August 2016 and prepare the wages control account for the month. 6 marks