Mars Limited (ML) blends and markets a specialised chemical and has two production processes, A and...
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Mars Limited (ML) blends and markets a specialised chemical and has two production processes, A and B. In process A, two joint products, Comet and G-1 are produced and incidental to their production, a by-product String is also manufactured. G-1 is further processed in process B and converted into a new product Gravity. Following information has been extracted for the month of August 2022: Costs Direct material Conversion costs Output Comet GI Gravity Opening work in process Closing work in process Process A Process B Rs. in '000 9,000 4,500 Litres 3500 4000 1000 800 950 Remarks 9000 litres were added at the beginning of the process 2,000 Conversion costs are incurred evenly throughout the process. Sold for Rs. 1,500 per litre after incurring packing cost of Rs. 120 per litre. Transferred to process B for conversion into Gravity Sold at split-off point for Rs. 600 per litre 4000 Sold for Rs. 2,200 per litre after incurring packing cost of Rs. 140 per litre. 60% complete as to conversion 80% complete as to conversion Additional information: ( Cost of opening work in process is Rs. 1,500,000 which comprises of 60% material cost and 40% conversion cost (u) Normal loss in process A is estimated at 10% of the input and is incurred at the end of the process. The rejected quantity from process A is sold for Rs. 200 per litre. No loss is incurred in process B Proceeds from sale of by-product String are treated as reduction in joint costs. Joint costs are allocated on the basis of net realizable values of the joint products at the split-off point (i) ML uses weighted average method for inventory valuation. Required: (4) (0) () Prepare accounting entries to record production gain/loss of process A for the month. Prepare quantity schedule and equivalent production schedule of process A Compute cost per litre of Comet and Gravity Mars Limited (ML) blends and markets a specialised chemical and has two production processes, A and B. In process A, two joint products, Comet and G-1 are produced and incidental to their production, a by-product String is also manufactured. G-1 is further processed in process B and converted into a new product Gravity. Following information has been extracted for the month of August 2022: Costs Direct material Conversion costs Output Comet GI Gravity Opening work in process Closing work in process Process A Process B Rs. in '000 9,000 4,500 Litres 3500 4000 1000 800 950 Remarks 9000 litres were added at the beginning of the process 2,000 Conversion costs are incurred evenly throughout the process. Sold for Rs. 1,500 per litre after incurring packing cost of Rs. 120 per litre. Transferred to process B for conversion into Gravity Sold at split-off point for Rs. 600 per litre 4000 Sold for Rs. 2,200 per litre after incurring packing cost of Rs. 140 per litre. 60% complete as to conversion 80% complete as to conversion Additional information: ( Cost of opening work in process is Rs. 1,500,000 which comprises of 60% material cost and 40% conversion cost (u) Normal loss in process A is estimated at 10% of the input and is incurred at the end of the process. The rejected quantity from process A is sold for Rs. 200 per litre. No loss is incurred in process B Proceeds from sale of by-product String are treated as reduction in joint costs. Joint costs are allocated on the basis of net realizable values of the joint products at the split-off point (i) ML uses weighted average method for inventory valuation. Required: (4) (0) () Prepare accounting entries to record production gain/loss of process A for the month. Prepare quantity schedule and equivalent production schedule of process A Compute cost per litre of Comet and Gravity
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Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
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