Wellington Ltd manufactures coffee mugs in one mega production department. The company uses weighted average costing and in the production department, all materials are added at the beginning of the manufacturing process and conversion costs are added uniformly throughout the manufacturing process. At the beginning of June, there were 15,000 units in work in process (WIP), which were 30% completed and at the end of June there were 5,000 units remaining in work in process which were 50% complete. During June, work commenced on 30,000 units. Quality checks are conducted during manufacturing when products are 35% complete. Overall, in June there were 2,000 defective coffee mugs identified. Cost data of the production department is as follows:

Manufacturing Costs during June: WIP(1st June) Costs Incurred

Direct Materias: 35000 145000

Conversion: 195000 299400

a) Calculate the cost per equivalent unit for direct materials and for conversion costs.

b) Calculate the cost of units completed and transferred out.

c) calculate the cost of spoiled units.

d) calculate the cost of WIP at 30th June.

e) explain in detail the difference between normal and abnormal spoilage.

f) record the journal entry to transfer the cost of units completed and transferred out in June assuming the spoilage is normal.

g) record the journal entry to transfer the cost of units completed and transferred out in June assuming the spoilage is abnormal.

h) compare process costing and activity based in regards to the allocation of overhead costs. Discuss this in detail.