QUESTION 1

A raw material named 'Honey' undergoes 2 processes in order to be converted into a product known as 'Homey". Below are the information pertaining to the production of 'Homey'.

Process 1

Honey(RM4.00/kg) 500kg

Direct Labour RM3,000

Direct Expenses RM1,000

Process 2

Additional material (RM6.00/kg) 500kg

Direct Labour RM4,000

Direct Expenses RM2,000

Overhead are absorbed at 100% of direct labour cost. Normal loss is 10% of input in both processes and its scrap value is RM0.20/kg.

Actual output is only 300kg in Process 1 and 750kg in process 2.

Required:

Prepare Process 1 and Process 2 account and Normal loss/abnormal loss/abnormal gain account (if any).

QUESTION 2

SUASANA Sdn Bhd produces cupcakes that go through two processes before it can be sold. The followings are information regarding the two processes.

Process 1 Process 2

Direct material 9,000 kg at RM1.65 per kg -

Additional material - 600kg at RM1.80

Direct labour 2,450 hours at rate of RM3.40 per hour 1,000 hours at rate of RM3.40 per hour

Production overhead RM6,370 RM2,900

Actual output 7,000kg 6,900kg

Normal loss 20% 10%

Scrap value RM1.20 per kg RM1.40 per kg

Note: The price per unit is to be calculated to four decimal places and all other calculations are to be rounded up to nearest RM.

Required:

Prepare the following accounts:

a. Process 1 Account

b. Process 2 Account

c. Normal Loss Account

d. Abnormal Loss/Abnormal Gain Account (if any)