Better Choice Foods makes a single product using two processes. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of April 20X9, for Process 2. (i) Work-in-process, beginning inventory: -0- (ii) Transfer from Process 1: 15,000 units valued at $51.40 each (iii) Other manufacturing costs incurred during April: $513,000 $365,000 $211,000 Direct material added Direct labour Manufacturing overhead (iv) Normal losses were estimated to be 5% of input during the period. Losses from Process 2 are deemed to be scrap, and sold at $40 per unit. (v) At inspection 1,750 units were rejected as scrap. These units had reached the following degree of completion: Input material 100% Direct material 50% added Conversion 30% costs (vi) 12,000 units were completed and transferred to Finished Goods Inventory. (vii) Work-in-process at the end of April had reached the following degree of completion: Input material 100% Direct material 80% added Conversion 40% costs Required: (a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b) Calculate the: Total cost of units completed and transferred to Finished Goods inventory Cost of abnormal losses Cost of ending work-in-process inventory in Process 2 (c) Prepare Better Choice's Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance.
Better Choice Foods makes a single product using two processes. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of April 20X9, for Process 2. (i) Work-in-process, beginning inventory: -0- (ii) Transfer from Process 1: 15,000 units valued at $51.40 each (iii) Other manufacturing costs incurred during April: $513,000 $365,000 $211,000 Direct material added Direct labour Manufacturing overhead (iv) Normal losses were estimated to be 5% of input during the period. Losses from Process 2 are deemed to be scrap, and sold at $40 per unit. (v) At inspection 1,750 units were rejected as scrap. These units had reached the following degree of completion: Input material 100% Direct material 50% added Conversion 30% costs (vi) 12,000 units were completed and transferred to Finished Goods Inventory. (vii) Work-in-process at the end of April had reached the following degree of completion: Input material 100% Direct material 80% added Conversion 40% costs Required: (a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b) Calculate the: Total cost of units completed and transferred to Finished Goods inventory Cost of abnormal losses Cost of ending work-in-process inventory in Process 2 (c) Prepare Better Choice's Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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answer these questions a,b and c
Transcribed Image Text:Better Choice Foods makes a single product using two processes. Quality control check takes
place during
the process, at which point, rejected units are separated from good units.
The following details relate to production for the month of April 20X9, for Process 2.
(i)
Work-in-process, beginning inventory: -0-
(ii)
Transfer from Process 1: 15,000 units valued at $51.40 each
(iii)
Other manufacturing costs incurred during April:
$513,000
$365,000
$211,000
Direct material added
Direct labour
Manufacturing
overhead
(iv) Normal losses were estimated to be 5% of input during the period. Losses from Process 2
are deemed to be scrap, and sold at $40 per unit.
(v)
At inspection 1,750 units were rejected as scrap. These units had reached the following
degree of completion:
Input material
100%
Direct material
50%
added Conversion
30%
costs
(vi)
12,000 units were completed and transferred to Finished Goods Inventory.
(vii) Work-in-process at the end of April had reached the following degree of completion:
Input material
100%
Direct material
80%
added Conversion
40%
costs
Required:
(a)
Prepare a statement of equivalent production to determine the equivalent units for direct
materials (From Process 1 & Direct Material Added), and conversion costs and the cost per
equivalent unit for direct materials and conversion costs.
(b)
Calculate the:
Total cost of units completed and transferred to Finished Goods inventory
Cost of abnormal losses
Cost of ending work-in-process inventory in Process 2
(c)
Prepare Better Choice's Work-In-Process Inventory - Process 2 T-account, clearly showing
the ending balance.
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