Question: GREEN Ltd makes a product that passes through two manufacturing processes. A normal loss equal to 8% of the raw material input occurs in Process

GREEN Ltd makes a product that passes through two manufacturing processes. A normal loss equal to 8% of the raw material input occurs in Process ALPHA but no loss occurs in Process BETA. Losses have no realisable value. All the raw material required to make the product is input at the start of Process ALPHA. The output from Process ALPHA each month is input into Process BETA in the same month. Work in progress occurs in Process BETA only. Information for the month of February 2020 for each process is as follows:

Process ALPHA

Raw material input 50,000 litres at a cost of K365,000

Conversion costs K256,000

Output to Process BETA 47,000 litres

Process BETA

Opening work in progress 5,000 litres (40% complete for conversion costs) valued at K80,000

Conversion costs K392,000

Closing work in progress 2,000 litres (50% complete for conversion costs)

Required:

(a) Prepare the Process ALPHA account for last month. [5 Marks]

(b) Calculate in respect of Process BETA for last month:

(i) The value of the completed output; and

(ii) The value of closing work in progress. [5 Marks] [TOTAL: 10 MARKS]

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