Question

Question 05: a) Big Bite Barbeque is engaged in the business of ready to cook barbeque shots. The preparation of barbeque shots passes through 3 culinary processes namely: marinating & slicing. Packing process is outsourced.

Details	Marinating	Slicing
Work in process – Opening inventory	300	250
Units started in the process	750	---
Units transferred to next department	1,000	---
Units received from previous department	---	---
Units transferred to finished goods		1,100
Work in process – Closing inventory	50	150

Departmental supervisors report that ending WIP is:

• 100% complete as to materials in marinating and slicing department.

• 100% complete as to labor in marinating and 45% complete in slicing department.

• 25% complete as to FOH in marinating and 70% complete in slicing department.

Details	Marinating ($)	Slicing ($)
Work in process – Opening inventory:
Cost from previous department	---	6,700
Materials	4,000	3,000
Labor	1,500	900
FOHs	600	1,450
Cost added to process during current period:
Materials	26,000	11,000
Labor	9,500	6,800
FOHs	7,000	5,000

Required: Construct a CPR for marinating department for the month ended June 30, 2017 showing proper calculations.

b) Hill-way Pharmaceuticals prepare cough syrups for children under the age of 10 years. The process alcohol, hydrazine & other chemical stabilizers in a process that results in 2 products:

• Cough syrup (800 liters)

• Liquor (400 liters)

Common cost of processing are £46,700. Cough syrup is sold for £2 per 100ml and liquor for £1.8 per 250ml.

REQUIRED: Allocate the common costs on basis of physical output & sales value method.

Answer 1

Weighted average cost
Beggining units	300	Transferred out	1,000
Started intro production	750	Ending units	50
	1050		1050
Equivalent units	Material	Labor	FOH
Units transferred                      A	1000	1,000	1,000
Ending Units	50	50	50
Completion	100%	100%	25%
B	50	50	12.5
Total units	1050	1050	1012.5
Cost per equivalent units
Particulars	Material	Labor	FOH	Total
As at beginning	4000	1500	600	6100
Added during the month	26000	9500	7000	42500
Cost to be accounted for	30000	11000	7600	48600
Total eqivalent units	1050	1050	1012.5
Cost per equivalent unit	28.57	10.48	7.51	46.55
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

Cost of ending work in progress
Particulars	Material	Labor	FOH
Ending units	50	50	50
Cost per equivalent units	28.57	10.48	7.51
Completion	100%	100%	25%
Total cost	1429	524	94
Total cost	2046
Cost of goods transferred
Particulars	Material	Labor	FOH
Number of units	1000	1000	1000
Cost per equivalent units	28.57	10.48	7.51
Total amount	28571.43	10476	7506
Total cost	46554
Reconciliation report
Cost of goods transferred		46554
AddWork in proress ending
Material	1429
Labor	524
Overheads	94	2046
Total cost accounted for		48600