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: Direct material added Direct labour Manufacturing overhead $513,000 $365,000 $211,000 (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 Direct material added Conversion costs 100% 50% 30% (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 Direct material added Conversion costs 100% 80% 40% Required: Prepare Better Choice’s Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

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:
Direct material added
Direct labour
Manufacturing overhead
$513,000
$365,000
$211,000
(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
Direct material added
Conversion costs
100%
50%
30%
(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
Direct material added
Conversion costs
100%
80%
40%
Required:
Prepare Better Choice’s Work-In-Process Inventory - Process 2 T-account, clearly showing the
ending balance. 
(d) State the journal entries necessary to record the assignment of direct materials, direct
manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal
entries to record the cost of goods completed and transferred to finished goods. 
(e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal
spoilage statement, clearly showing Better Choice’s true loss. 

Expert Solution
steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education