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Question Two Pass-Well Company Limited produces a product that passes through two processes, Process 1 and Process 2 . Details of activities for the month
Question Two
Pass-Well Company Limited produces a product that passes through two processes, Process 1 and Process 2. Details of activities for the month of December, 2020 is as follows;
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| Process 1 |
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| Process 2 |
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Material introduced (4,000 units) | @GH200.00 |
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Material added |
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| GH25,000.00 | ||
Labour Costs (@GH400 per hour) |
| 200hrs |
| 600hrs | ||
Output in units |
| 3,500units |
| 3,150units | ||
Scrap value of normal loss | GH20 per unit | GH40 per unit | ||||
Note; |
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- Overhead is absorbed at 80% of labour costs.
- Normal loss is estimated at 10% for both process.
- No opening and closing stocks
a. You are required to prepare the relevant accounts (12 marks)
- You are required to prepare the relevant Accounts With practical example, differentiate between cost assignment and cost apportionment; product cost and period costs; direct
cost and indirect cost (8 marks)
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