a. Process 1 Account
Direct materials:
Opening WIP - 0
Material added - RM3000
Total materials - RM3000
Direct expenses:
Direct labor - RM4800
Direct expenses - RM1400
Total direct expenses - RM6200
Production overhead - RM5000
Total costs incurred - RM14200
Output:
Normal output (9800kg - 5%) = 9310kg
Scrap (9800kg - 9310kg) = 490kg
Scrap value = 490kg x RM0.40/kg = RM196
Cost per kg:
Total costs incurred / Normal output = RM14200 / 9310kg = RM1.5249
Loss value:
Loss (5%) = 490kg
Loss value = 490kg x RM1.5249/kg = RM747.06
Process 1 Account
| | Amount (RM) |
|---------------------------|----------------|
| Direct materials | 3000 |
| Direct expenses | 6200 |
| Production overhead | 5000 |
| Loss | 747.06 |
| | |
| Total Cost | 14200 |
| | |
| Outputs | |
| Normal output | 9310 |
| Scrap | 196 |
| | |
| Total output | 9506 |
b. Process 2 Account
Direct materials:
Opening WIP - 0
Material added - RM2000
Total materials - RM2000
Direct expenses:
Direct labor - RM2840
Direct expenses - RM1000
Total direct expenses - RM3840
Production overhead - RM2000
Total costs incurred - RM7840
Output:
Normal output (9000kg - 8%) = 8280kg
Scrap (9000kg - 8280kg) = 720kg
Scrap value = 720kg x RM0.50/kg = RM360
Cost per kg:
Total costs incurred / Normal output = RM7840 / 8280kg = RM0.9466
Loss value:
Loss (8%) = 720kg
Loss value = 720kg x RM0.9466/kg = RM681.07
Process 2 Account
| | Amount (RM) |
|---------------------------|----------------|
| Direct materials | 2000 |
| Direct expenses | 3840 |
| Production overhead | 2000 |
| Loss | 681.07 |
| | |
| Total Cost | 7840 |
| | |
| Outputs | |
| Normal output | 8280 |
| Scrap | 360 |
| | |
| Total output | 8640 |
QUESTION 2 (20 MARKS)
Siong Sdn Bhd produces a detergent known as "Turbo" which passes through two processes Some completion. Data for the month of July 2010 where as follows:
Direct materials (10,000 kg X RM0.50)
Process 1: Rm 5000 Process 2 : -
Material added
Process 1:Rm 3000 Process 2: 2000
Direct expenses
Process 1: Rm1400 Process 2: 1000
Production Overhead
Process 1: Rm5000 Process 2: 2000
Direct labour
Process 1: Rm4800 Process 2: 2840
Output
Process 1 : 9800kg Process 2: 9000kg
Normal loss unit
Process 1: 5% Process 2 : 8%
Scrap value /kg
Process 1: Rm 0.40 Process 2: Rm0.50
Note: The price per unit is to be calculated to four decimal places.
Required:
a. Prepare Process 1 account (show all workings)
b. Prepare Process 2 accounts (Show all workings)
1 answer