Questions Syarikat Mochalatte is a mid-size coffee brewery in Melaka. It has two major production processes (stages): Blending and Bottling. The company has been using the Weighted-Average (WA) method to determine its costs of production throughout 2020. The owner, Aisyah, is considering the use of the First-in-First-Out (FIFO) method instead for 2021. She has requested her cost accountant to present a report on the impact of changing its process costing method using the existing December 2020 data. The Blending stage recorded the following production data for its Work-in-Process account in the month of December 2020: Percentage of Completion Physical Units Materials Conversion Costs Work-in-Process, 01 Dec 100,000 100% 15% Work-in-Process, 31 Dec 100,000 100% 80% Materials are typically added at the beginning of the production process. Direct labour and overheads are incurred uniformly throughout each process. 900,000 units were added into production throughout the month of December 2020. Required: a) Determine the equivalent units of production for the Blending Department in the month of December 2020 using the: (i) weighted-average (WA) method (ii) first-in-first-out (FIFO) method b) Available costs data for December 2020 is presented below: Material Labour Manufacturing Overhead Work-in-Process, 01 December RM50,000 RM20,000 RM1,250 Incurred throughout December RM1,305,000 RM600,000 RM64,750 Compute the unit costs of production for materials and conversion costs using the weighted-average (WA) method. Round the determined unit costs to the nearest 3 decimal places. (2 marks) Continued... BAC1624 MANAGEMENT ACCOUNTING 1 15 JANUARY 2021 TXF/NMH/MMN 11/11 c) The cost accountant determined that the manufacturing overhead costs will increase by RM6,500 (original: RM64,750) to accommodate for a system upgrade requirement under the first-in-first-out (FIFO) method. Based on the existing December 2020 data, the projected costs under the FIFO method is as below: Material Labour Manufacturing Overhead Work-in-Process, 01 December RM50,000 RM20,000 RM1,250 Incurred throughout December RM1,305,000 RM600,000 RM71,250 Calculate the updated unit cost of production for materials and conversion costs using the First-In-First-Out (FIFO) method. Round the determined unit costs to the nearest 3 decimal places. (2 marks) d) Prepare a Work-in-Process T-account for December 2020 using the weightedaverage (WA) method. (4 marks) e) Journalise the costs of production units that are completed and transferred out under the First-In-First-Out (FIFO) method. (2 marks) f) As the company's cost accountant, write a short memo to answer the following question from Aisyah: How does the First-In-First-Out (FIFO) method of unit costs computation differ from the weighted average (WA) method for Syarikat Mochalatte?" Questions Syarikat Mochalatte is a mid-size coffee brewery in Melaka. It has two major production processes (stages): Blending and Bottling. The company has been using the Weighted-Average (WA) method to determine its costs of production throughout 2020. The owner, Aisyah, is considering the use of the First-in-First-Out (FIFO) method instead for 2021. She has requested her cost accountant to present a report on the impact of changing its process costing method using the existing December 2020 data. The Blending stage recorded the following production data for its Work-in-Process account in the month of December 2020: Percentage of Completion Physical Units Materials Conversion Costs Work-in-Process, 01 Dec 100,000 100% 15% Work-in-Process, 31 Dec 100,000 100% 80% Materials are typically added at the beginning of the production process. Direct labour and overheads are incurred uniformly throughout each process. 900,000 units were added into production throughout the month of December 2020. Required: a) Determine the equivalent units of production for the Blending Department in the month of December 2020 using the: (i) weighted-average (WA) method (ii) first-in-first-out (FIFO) method b) Available costs data for December 2020 is presented below: Material Labour Manufacturing Overhead Work-in-Process, 01 December RM50,000 RM20,000 RM1,250 Incurred throughout December RM1,305,000 RM600,000 RM64,750 Compute the unit costs of production for materials and conversion costs using the weighted-average (WA) method. Round the determined unit costs to the nearest 3 decimal places. (2 marks) Continued... BAC1624 MANAGEMENT ACCOUNTING 1 15 JANUARY 2021 TXF/NMH/MMN 11/11 c) The cost accountant determined that the manufacturing overhead costs will increase by RM6,500 (original: RM64,750) to accommodate for a system upgrade requirement under the first-in-first-out (FIFO) method. Based on the existing December 2020 data, the projected costs under the FIFO method is as below: Material Labour Manufacturing Overhead Work-in-Process, 01 December RM50,000 RM20,000 RM1,250 Incurred throughout December RM1,305,000 RM600,000 RM71,250 Calculate the updated unit cost of production for materials and conversion costs using the First-In-First-Out (FIFO) method. Round the determined unit costs to the nearest 3 decimal places. (2 marks) d) Prepare a Work-in-Process T-account for December 2020 using the weightedaverage (WA) method. (4 marks) e) Journalise the costs of production units that are completed and transferred out under the First-In-First-Out (FIFO) method. (2 marks) f) As the company's cost accountant, write a short memo to answer the following question from Aisyah: How does the First-In-First-Out (FIFO) method of unit costs computation differ from the weighted average (WA) method for Syarikat Mochalatte