QUESTION 2 - 17 Marks Beryl (Pty) Limited (Beryl) manufactures a single product and uses a...

 

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QUESTION 2 - 17 Marks Beryl (Pty) Limited ("Beryl") manufactures a single product and uses a process costing system. The company recorded the following information for the month of March 2022: Opening work in progress ("opening WIP") (1 March): 60% complete Closing work in progress ("closing WIP") (31 March): 75% complete New units put into production in March 2022 Completed in March 2022 Additional information: Normal losses are estimated at 5% of the units that reach/pass the wastage point. Normal losses occur when the process is 70% complete. ● ● Raw materials are added at the beginning of the process and conversion takes place evenly throughout the process. The prices of the inputs used by Beryl generally returned to a lower level in March 2022 after a number of months in which these inputs were very difficult and expensive to obtain. Cost information was as follows: Opening WIP Raw materials Conversion Added in March 2022 Raw materials Conversion Units 20 000 25 000 175 000 150 000 R 310 000 98 750 1 016 000 539 625 TOTAL REQUIRED (a) Prepare the quantity statement for March 2022 based on the weighted average method of inventory valuation. (b) Prepare the production cost statement for March 2022 based on the weighted average method of inventory valuation. (c) Assume now that losses occur when the process is 80% complete. Prepare the quantity statement for March 2022 based on this new wastage point and the first-in-first-out (FIFO) method of inventory valuation. Marks (6) (3) (8) (17) QUESTION 2 - 17 Marks Beryl (Pty) Limited ("Beryl") manufactures a single product and uses a process costing system. The company recorded the following information for the month of March 2022: Opening work in progress ("opening WIP") (1 March): 60% complete Closing work in progress ("closing WIP") (31 March): 75% complete New units put into production in March 2022 Completed in March 2022 Additional information: Normal losses are estimated at 5% of the units that reach/pass the wastage point. Normal losses occur when the process is 70% complete. ● ● Raw materials are added at the beginning of the process and conversion takes place evenly throughout the process. The prices of the inputs used by Beryl generally returned to a lower level in March 2022 after a number of months in which these inputs were very difficult and expensive to obtain. Cost information was as follows: Opening WIP Raw materials Conversion Added in March 2022 Raw materials Conversion Units 20 000 25 000 175 000 150 000 R 310 000 98 750 1 016 000 539 625 TOTAL REQUIRED (a) Prepare the quantity statement for March 2022 based on the weighted average method of inventory valuation. (b) Prepare the production cost statement for March 2022 based on the weighted average method of inventory valuation. (c) Assume now that losses occur when the process is 80% complete. Prepare the quantity statement for March 2022 based on this new wastage point and the first-in-first-out (FIFO) method of inventory valuation. Marks (6) (3) (8) (17)

Answer rating: 100% (QA)

aUnits in opening WIP 1 March 60 complete Units in closing WIP 31 March 75 complete New units put into production in March 2022 175 000 Completed in March 2022 150 000 Normal losses 5 of units that re... View the full answer