Internet Inhand Ltd began producing netbooks on 1 July 2019. A unit of production passes through two processes — manufacturing and finishing. Production data for the month of July are presented below.

Required

(a) Prepare a cost of production report for July for each department, showing the unit cost on completed units for each process assuming that materials are added at the beginning of the process, and conversion costs are incurred continuously. The company uses the average cost method.

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Units started in process during July Units received from previous process during July Total Costs of production Materials Direct labour Factory overhead Units completed in July and transferred out Units in process, all materials added 31 July 1/2 complete for labour and overhead 1/4 complete for labour and overhead Manufacturing 98 000 Finishing - 82 000 82000 98000 $7 840 000 450 000 5 400 000 82 000 16000 387 500 4030000 76000 6000