- Section B 80 Marks Answer All Questions A Barbarossa Ltd Is A Turkish Factory That Produces Premium Handmade Rugs Th 1 (104.75 KiB) Viewed 42 times
- Section B 80 Marks Answer All Questions A Barbarossa Ltd Is A Turkish Factory That Produces Premium Handmade Rugs Th 2 (71.65 KiB) Viewed 42 times
SECTION B (80 marks) ANSWER ALL QUESTIONS A. Barbarossa Ltd is a Turkish factory that produces premium handmade rugs. These rugs go under two production departments: Stage I and Stage II. The following information is for the Stage 1 Department in May 2021: Work in process, May 1st: Units (80% complete for materials and 40% complete for labour) Direct materials Direct labour 40,000 90,000* 60,000* * TL: Turkish Lira During May, 57,000 units were completed and transferred to the Stage II Department. The incurred costs for direct materials and direct labour in Stage I Department during May were 25,000 and On 31* May, 12,000 units remained in the Stage I Department. These remaining Thits were og and 85% complete for materials and labour costs, respectively. Required: Prepare a cost of production report in Turkish Lira) using the weighted average method for the Stage I Department. (45 marks) B. In addition to the production of the standard sizes of handmade rugs, Barbarossa accepts customised orders from its online store on Etsy. The following information is for Job10UK, for a UK customer, in June 2021. a Direct material £3,000 £4,340 Direct labour Barbarossa Ltd pays annual fees of £1000 for its Etsy store which cover all its online customised orders. Job 10UK used 20 labour hours with 124 labour hours being used by all Etsy store jobs this year.
C. Barbarossa Ltd has two operating divisions: Stage I and Stage II. The company allocates its service departments' costs (i.e., Accounting and Health Care) to each operating division. Allocations for the coming accounting period are based on the following data: Service Departments Operating Divisions Accounting Health Care Stage I Stage II Overhead costs (TL) Accounting Transactions processed Direct Labour Cost (TL) 64,000 10,000 33,000 61,000 40,000 66,000 72,500 140.627 400,000 71.900 280 593 500.000 Required: Allocate the service departments' costs to the operating divisions using a) the Direct Method and b) the Step-down Method (starting with Accounting to Health Care). (20 marks)