QUESTION 1

(20 Marks)

REQUIRED

Study the information provided below and then prepare the Process Cost Report for Process 2 using the weighted average method.

INFORMATION

Dehli Ltd uses two processes to manufacture takkies. The following details are applicable to Process 2 for July 2018:

Production details

Units

Units of incomplete work (opening)

45 000

(100% complete i.r.o. materials; 40% complete i.r.o. conversion costs)

Units received from the previous process

180 000

225 000

Units completed and transferred

(135 000)

Units of incomplete work (closing)

90 000

(100% complete i.r.o. materials; 70% complete i.r.o. conversion costs)

Details in connection with costs:

R

Incomplete work (opening)

720 000

Costs of previous process

567 000

Direct materials

99 000

Conversion costs

54 000

Costs incurred during July:

1 548 000

Transferred from previous process

1 017 000

Direct materials

189 000

Conversion costs

342 000

2 268 000