QUESTION 28 a) The manufacturing process of ABC limited results in three products namely Exe, Wye an

QUESTION
28

a) The
manufacturing process of ABC limited results in three products namely Exe, Wye
and Zed.

Opening
work in progress 5000 litres
fully complete as to transfer from process
1:40% as to …
overheads. It is valued at $ 60000.
Transfer
from process 1 65000 litres
valued at $ 77500
Direct
labour $
101400
Variable
overheads $
80000
Fixed
overheads $
40000
Normal
loss 5%
of volume transferred from process 1
Scrap value of $
2 per unit
Actual
output 30000
litres of product Exe (a joint product)
25000 litres of
product Wye (a joint product)

7000 litres of
product Zed (a byproduct)
Closing
work in progress 6000
litres fully complete as to transfer from process 1 and
60% complete as
to labor and overheads

Additional
information

1. The
final selling prices per litre of products Exe, Wye and Zed are $ 15, $ 18 and
$ 4 respectively.

2. There
are no further costs associated with by product Zed
3. Product
Wye requires further processing at $ 1.50 per litre
4. All
the three products incur packaging costs of $ 0.50 per litre before they are
sold.

Required:
i.
Calculate the number of
equivalent units produced
ii.
Calculate the costs of products Exe and
Wye

iii.
Apportion the common
costs to joint products based on sales at the point of separation

iv.
Prepare process II account for the month
of January 2008

QUESTION
29

Travla
Limited operates a single process manufacturer soap. The process costs for the
month of February 2000 were as follows:-

$ ‘000’

Material
input 20000

5,000

Labor

4,500

Overheads

2,500

Additional
information:

1. The
normal output of the process is 95% of material input. The loss from the
process is sold for $ 60 per kilogram.

2. The
output for the month of February 2007 was as follows:-

Finished
goods 18800
kilograms

Closing work in
progress 1000 kilograms

3.
The degree of completion of closing work in progress was 50% for labour and
overheads and 100% for materials.

Required:
i.
Process account

ii. Abnormal gain account

QUESTION 30

Ups
Limited produces three products; Exe, Wye and Zed in a single process. For the
month of September 20006, the following budgeted figures were available:

Raw
materials 240000 kilograms at
$ 30 per kilogram

Labor 9000 hours at $ 90 per
hour

Variable
overheads 9000 hours at $ 45 per hour

Additional
information

1)
Fixed overheads were absorbed at 50% of
labor cost

2) There
was a normal loss of 10% of material input and no abnormal loss. The normal
loss was sold as scrap at $ 15 per kilogram which was credited to the process
account.

3)
Exe, Wye and Zed were produced in the
ratio of 5:3:2 respectively
4)
There was neither opening nor closing
work in progress
5)
The products were sold as follows:-

Product

Selling
price per kilogram

Exe

225

Wye

180

Zed

150

Required:

a.
Apportion the joint cost
to the joint products, Exe, Wye, and Zed using the following methods

i) Relative
weight of output
ii)
Sales value of output
b.
On further processing, products Exe, Wye
and Zed were converted to product A, B,

and
C respectively. The following prices per kilograms were $ 270, $ 225 and $180
for products A,B and C respectively.

The
further processing cost the company $ 15 kilograms of material input. In
addition, the normal loss was 10% of material input with no sales value.

Required:
Profit
or loss on further processing of each of the products

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