Question :

(a)Prepare the following journal entries for a job costing system (no values required):

(i)Purchase of materials from a supplier on credit.(2 marks)

(ii)Issues of direct materials for production.(2 marks)

(iii)Issues of indirect materials for production.(2 marks)

(iv)Payment of wages to employees by cash. (2 marks)

(v)Allocation of wages, comprising direct and indirect wages for production. (2 marks)

(vi)Factory machinery and equipment were depreciated.(2 marks)

(vii)Overhead expenses were charged to jobs through factory overhead absorption rates.(2 marks)

(b)X and Y are joint products that can be sold immediately after split-off. The following information is available for the last period:

No opening inventories. Total joint production costs were RM700,000.

Product Production units Sales units Selling price per unit

X 14 000 12 000 RM20

Y 12 000 8 000 RM22

Required:

(i)Using the physical unit method, compute the value of the closing inventory of products X and Y for the last period.(6 marks)

(ii)In your view, is the physical measures method or the sales value method of joint costallocation more appropriate? Why?(2 marks)

(iii) Provide and describe briefly, an example of an industry that produces both joint and by-products.(3 marks)

[Total: 25 Marks]