REDCHEM Ltd. (REDCHEM) produces a product by putting materials through a single process. You are given...

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REDCHEM Ltd. ("REDCHEM") produces a product by putting materials through a single process. You are given the following details for April 2010: (I) Material costs 75,000 kilos at 3.84 per kilo. Labour costs 5,850 hours at 11 per hour. Overhead costs 129,000. REDCHEM uses the weighted average method of costing. (2) There was no opening work in progress. (3) Closing work in progress amounted to 15,000 kilos, fully complete for material and 70% complete for labour and overheads. 602 00 (4) (5) (6) Normal process loss is 5% of input (detected when units are 100% completed). Scrap value of losses is 2.25 per kilo. Finished output amounted to 51,000 kilos. Requirement (a) (i) Prepare the Process Account for the month of April 2010, detailing the value of the finished units and work in progress. (ii) Prepare the Abnormal Loss Account. (b) Distinguish between normal and abnormal losses and describe their respective accounting treatments. (c) Job costing and process costing are two different approaches to accumulating costs for the purposes of product costing. (i) Describe the types of organisations where it would be appropriate to use a job costing system and outline briefly the principal features of the system. 5 Marks (ii) Describe the types of organisations where it would be appropriate to use a process costing system and outline briefly the principal features of the system. 5 Marks REDCHEM Ltd. ("REDCHEM") produces a product by putting materials through a single process. You are given the following details for April 2010: (I) Material costs 75,000 kilos at 3.84 per kilo. Labour costs 5,850 hours at 11 per hour. Overhead costs 129,000. REDCHEM uses the weighted average method of costing. (2) There was no opening work in progress. (3) Closing work in progress amounted to 15,000 kilos, fully complete for material and 70% complete for labour and overheads. 602 00 (4) (5) (6) Normal process loss is 5% of input (detected when units are 100% completed). Scrap value of losses is 2.25 per kilo. Finished output amounted to 51,000 kilos. Requirement (a) (i) Prepare the Process Account for the month of April 2010, detailing the value of the finished units and work in progress. (ii) Prepare the Abnormal Loss Account. (b) Distinguish between normal and abnormal losses and describe their respective accounting treatments. (c) Job costing and process costing are two different approaches to accumulating costs for the purposes of product costing. (i) Describe the types of organisations where it would be appropriate to use a job costing system and outline briefly the principal features of the system. 5 Marks (ii) Describe the types of organisations where it would be appropriate to use a process costing system and outline briefly the principal features of the system. 5 Marks