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This is a Process Costing Question I need help with.. I have provided solution for (b).. only need help with doing question a.. I only
This is a Process Costing Question I need help with.. I have provided solution for (b).. only need help with doing question a.. I only have $10 Tutor credit. Thank You.. Need this question by 1pm because I have an exam at 5pm.. Thank You
Cal Beverages Limited manufactures and sells bottle syrups in Jamaica. The company uses a process costing system where all materials for the production of the syrups are added at the start of the production process. The opening inventory of a process is 10,000 units which are deemed 75% completed with respect to conversion costs. Opening material cost is $1,000,000, while direct labour and production overheads are $2,000,000 and $ 3,000,000 respectively. During the period 90,000 units were started. Material cost for the period was $2,500,000. Meanwhile, direct labour and production overheads incurred were $2,500,000 and $2,500,000 respectively. It was ascertained that there were 20,000 units at the end of the period which are 50% complete for labour and production overheads. Management also indicated that resources are used evenly over the production process. Required: a. Using the weighted average cost flow assumption: determine the equivalent unit cost, work in progress and completed cost for direct material as well as conversion cost. [ 10 marks ] b. Using the FIFO cost flow assumption: determine the equivalent unit cost, work in progress and completed cost for direct material as well as conversion cost. [ 10 marks ] b. Fifo Units to Account for BWIP - 10,000 Started - 90,000 Total - 100,000 BWIP Completed EWIP Total units 10,000 70,000 20,000 100,000 Equivalent cost per unit Valuation of Units BWIP Cost Direct Material -$1,000,000 Direct labour -$2,000,000 Units to Account for EWIP -20,000 Completed - 80,000 Total - 100,000 % 0% /25% 100%/100% 100%/50% Direct Material 0 70,000 20,000 90,000 Conversion 2,500 70,000 10,000 82,500 2,500,000/90,000 =$27.77777778 5,000,000/82500 =$60.60606061 Production Overhead- $3,000,000 Total - $6,000,000 Completed Units Cost Direct Material = (70,000 x $27.77777778) = $1,944,444.445 Conversion = (72,500 x $60.60606061) = $4,393,939.394 Total = $6,338,383.839 EWIP Direct material = (20,000 x $27.77777778) = $555,555.5556 Conversion = (10,000 x $60.60606061) = $606,060.6061 Total = 1,161,616.162 Total = BWIP + Completed Units + EWIP Total = $6,000,000 + $6,338,383.839 + 1,161,616.162 Total = $13,500,000 Total Cost Incurred BWIP - $6,000,000 Current Cost - $7,500,000 Total = $13,500,000Step by Step Solution
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