Question $9$ Process costing $-$losses in process $($FIFO$)$

Hao Ltd uses process costing and First in First Out $($FIFO$)$ method of valuation. The following information for the March $2024$ relates to the first stage of processing cider. In this stage all materials are added at the start of the process and no materials are added during the process.

Opening work in progress: $2,000$ litres $(30\%$ complete in respect of conversion costs$)$ and is valued at $24,600($split into $16,500$ direct material and $8,100$ conversion costs$).$

Cost incurred: Direct material $99,600$ for $12,500$ litres of input, and conversion was $155,250.$

Normal loss: $8\%$ of input. All losses which are incurred evenly throughout the process can be sold for $3$ per litre.

Actual output: $10,000$ litres were transferred from the first stage to the finished goods warehouse.

Closing work in progress: $3,000$ litres $(45\%$ complete in respect of conversion costs$).$

You are required to:

a$)$ Prepare the first stage process account for March $2024$ in pounds $()$ and litres. $(15$ marks$)$

b$)$ Identify two types of organisations where it would be appropriate to use service costing. For each suggest a suitable unit cost measure. $(5$ marks$)$