Well Done Sdn. Bhd. makes a product that has to pass through two manufacturing processes, I and II. All the materials is input at the start of Process I. No losses occur in Process I but there is a normal loss in Process II equals to 7% of the input into that process. Losses have no realisable value.

Process I is operated only in the first part of every month followed by Process II in the second part of the month. All completed production from Process I is transferred into Process II in the same month. There is no Work In Process (WIP) in Process II.

Information for last November for each process is as follows:

Process I

Opening WIP 200 units (40% complete for

conversion costs) valued in total at

RM16,500

Input into the process 1,900 units with a material cost of

RM133,000

Conversion costs incurred RM93,500

Closing WIP 50% complete for conversion

costs

Process II

Transfer from Process I 1,800 units

Conversion costs incurred RM78,450

Completed units 1,660 units

Calculate the total value of the units transferred to Process II.

Question 8Answer

a. RM198,000

b. RM238,500

c. RM134,500

d. RM214,500