QUESTION TWO Ragus. Sugars Ltd (RSL) makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and for use in desserts. The bottles are sold for 12 each. The first stage in the production process is carried out in the Mixing department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted average method in its process costing system. Information on work in the Mixing Department for the month of April is shown below: Quantity Schedule Units to be accounted for: Work in progress inventory, 1 April (90% materials, 80% conversion cost added last month) 30,000 Started into production 200,000 Total units 230,000 Units accounted for as follows: Transferred to the next department 190,000 Work in progress inventory, 30 April (75% materials, 60% conversion cost added this month) 40.000 Total units 230,000 Total Cost Cost to be accounted for:- Work in progress inventory, 1 April Cost added during the month Total cost 98,000 827.000 925.000 Cost reconciliation Cost accounted for as follows: Transferred to the next department Work in progress inventory, 30 April Total cost 805,600 119.400 925.000 RSL has just been acquired by another company, and the management of the acquiring company would like some additional information about the operations of RSL, particularly with reference to the information on the work done in April. As such, the management of the acquiring company is seeking answers in relation to the following questions. Required: (a) What were the equivalent units for the month of April? (10 Marks) (b) What were the costs per equivalent unit for the month of April? The beginning inventory consisted of the following costs: materials, 67,800; and conversion cost, 30,200. The costs added during the month consisted of materials, 579,000; and conversion cost, 248,000. (15 Marks) (c) How many of the units transferred to the next department were started and completed during the month of April? (5 Marks) (d) The manager of the Mixing Department, anxious to make a good impression on the new owners, stated, 'Materials prices jumped from about 2.50 per unit in March to 3.00 per unit in April, but due to good cost control I was able to hold our materials cost to less than 3.00 per unit for the month'. Should this manager be rewarded for good cost control? Explain. (10 Marks) (e) Define what a quantity schedule is and explain its purpose in manufacturing companies like RSL? (10 Marks) [TOTAL: 50 MARKS] QUESTION TWO Ragus. Sugars Ltd (RSL) makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and for use in desserts. The bottles are sold for 12 each. The first stage in the production process is carried out in the Mixing department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted average method in its process costing system. Information on work in the Mixing Department for the month of April is shown below: Quantity Schedule Units to be accounted for: Work in progress inventory, 1 April (90% materials, 80% conversion cost added last month) 30,000 Started into production 200,000 Total units 230,000 Units accounted for as follows: Transferred to the next department 190,000 Work in progress inventory, 30 April (75% materials, 60% conversion cost added this month) 40.000 Total units 230,000 Total Cost Cost to be accounted for:- Work in progress inventory, 1 April Cost added during the month Total cost 98,000 827.000 925.000 Cost reconciliation Cost accounted for as follows: Transferred to the next department Work in progress inventory, 30 April Total cost 805,600 119.400 925.000 RSL has just been acquired by another company, and the management of the acquiring company would like some additional information about the operations of RSL, particularly with reference to the information on the work done in April. As such, the management of the acquiring company is seeking answers in relation to the following questions. Required: (a) What were the equivalent units for the month of April? (10 Marks) (b) What were the costs per equivalent unit for the month of April? The beginning inventory consisted of the following costs: materials, 67,800; and conversion cost, 30,200. The costs added during the month consisted of materials, 579,000; and conversion cost, 248,000. (15 Marks) (c) How many of the units transferred to the next department were started and completed during the month of April? (5 Marks) (d) The manager of the Mixing Department, anxious to make a good impression on the new owners, stated, 'Materials prices jumped from about 2.50 per unit in March to 3.00 per unit in April, but due to good cost control I was able to hold our materials cost to less than 3.00 per unit for the month'. Should this manager be rewarded for good cost control? Explain. (10 Marks) (e) Define what a quantity schedule is and explain its purpose in manufacturing companies like RSL? (10 Marks) [TOTAL: 50 MARKS]