Valentine Accessories Plus produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding,...

  

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Valentine Accessories Plus produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C $ 0 January 1 Bal. Transfer from Moulding Direct Materials Added 20,000 1,310,000 391,600 638,000 Direct Labour Manufacturing Overhead 307,400 Normal losses are estimated to be 22% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added 100% 40% 20% Conversion costs Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. (b) Compute the: (10 marks) • cost of the unexpected losses • total cost of the handles completed and transferred out of the Packaging Department • cost of ending work in process inventory in the Polishing Department (3 marks) (c) Complete the Work in Process Inventory Polishing Process T-account, clearly showing the ending balance. (5 marks) (d) Prepare the journal entries for the: * assignment of direct materials, direct labour incurred and the manufacturing overhead applied to the Polishing Process * cost of the units completed and transferred out to the Packaging Process (5 marks) (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Valentine Accessories true loss for the Polishing Department. (2 marks) Valentine Accessories Plus produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C $ 0 January 1 Bal. Transfer from Moulding Direct Materials Added 20,000 1,310,000 391,600 638,000 Direct Labour Manufacturing Overhead 307,400 Normal losses are estimated to be 22% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added 100% 40% 20% Conversion costs Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. (b) Compute the: (10 marks) • cost of the unexpected losses • total cost of the handles completed and transferred out of the Packaging Department • cost of ending work in process inventory in the Polishing Department (3 marks) (c) Complete the Work in Process Inventory Polishing Process T-account, clearly showing the ending balance. (5 marks) (d) Prepare the journal entries for the: * assignment of direct materials, direct labour incurred and the manufacturing overhead applied to the Polishing Process * cost of the units completed and transferred out to the Packaging Process (5 marks) (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Valentine Accessories true loss for the Polishing Department. (2 marks)

Answer rating: 100% (QA)

Requirement a Equivalent Units Physical Input Materials Direct Materials Conversion costs UNITS unit... View the full answer