Question 3 1.The following information relates to question 1 and 2 A company produces a certain food item in a manufact

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Question 3

1.The following information relates to question 1 and 2 A company produces a certain food item in a manufacturing process. On 1 November, there was no opening inventory of work in process. During November, 500 units of material were input to the process, with a cost of $9,000. Direct labour costs in November were $3 840. Production overhead is absorbed at the rate of 200% of direct labour costs. Closing inventory on 30 November consisted of 100 units which were 100% complete as to materials and 80% complete as to labour and overhead. There was no loss in process. 1.The full production cost of completed units during November was:

a) $10,400

b) $16,416

c) $16,800

d) $20,520

Part b

The value of the closing work in process on 30 November is:

a) $2,440

b) $3,720

c) $4,104

d) $20,520

2. The following information relates to question 3 and 4 A company manufactures chemical X in a single process. At the start of the month there was no work-in process. During the month 300 litres of raw material were input into the process at a total cost of $6,000. Conversion costs during the month amounted to $4,500. At the end of the month 250 litres of chemical X were transferred to finished goods inventory. The remaining work-in-process was 100% complete with respect to materials and 50% complete with respect to conversion costs. There were no losses in the process. 3. The equivalent units for closing work-in-process at the end of the month would have been:

a) Material - 25 litres Conversion costs - 25 litres

b) Material - 25 litres Conversion costs - 50 litres

c) Material - 50 litres Conversion costs - 25 litres

d) Material - 50 litres Conversion costs - 50 litres

b.If there had been a normal process loss of 10% of input during the month the value of this loss would have been:

a) nil

b) $450

c) $600

d) $1,050