Question
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
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
Value of closing WIP in Process I is
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