How often Process and joint product costing is asked

Where it was asked

What costs marks here

The questions

1. Oct/Nov 2015, Q2.1(a)(i)4 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Thabang Traders (Pty) Ltd, which uses job costing to manufacture customised products for its clients, recorded the following for September 2015: the direct material control account had an opening balance of R11 000, and direct materials purchased during the month amounted to R14 000. The direct materials required by the individual jobs during the month were R2 800 for Job A, R3 000 for Job B and R4 200 for Job C. Prepare the general ledger material control account of Thabang Traders (Pty) Ltd for the month of September 2015, and balance the account.

2. Oct/Nov 2015, Q2.1(a)(ii)2.5 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. For Thabang Traders (Pty) Ltd, the direct wages for September 2015, all paid in cash, were R4 100 for Job A (80 hours), R5 500 for Job B (108 hours) and R6 400 for Job C (124 hours). Prepare the general ledger salaries and wages control account of Thabang Traders (Pty) Ltd for the month of September 2015, and balance the account.

3. Oct/Nov 2015, Q2.1(b)(i)3 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Thabang Traders (Pty) Ltd applies manufacturing overheads to jobs at a pre-determined rate of R20 per direct labour hour. Jobs A, B and C were all started in September 2015; Job A required direct materials of R2 800, direct wages of R4 100 for 80 labour hours, and was completed during the month with the customer invoiced for R10 000. Using this information, prepare the cost ledger account for Job A of Thabang Traders (Pty) Ltd for September 2015, and balance the account.

4. Oct/Nov 2015, Q2.1(b)(ii)2.5 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Thabang Traders (Pty) Ltd applies manufacturing overheads to jobs at a pre-determined rate of R20 per direct labour hour. Job B, started in September 2015 and not yet completed, required direct materials of R3 000 and direct wages of R5 500 for 108 labour hours. Using this information, prepare the cost ledger account for Job B of Thabang Traders (Pty) Ltd for September 2015, and balance the account.

5. Oct/Nov 2015, Q2.1(c)4 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Thabang Traders (Pty) Ltd allocates manufacturing overheads to Jobs A, B and C at a pre-determined rate of R20 per direct labour hour, based on 80 hours worked on Job A, 108 hours on Job B and 124 hours on Job C. The actual manufacturing overhead costs incurred for September 2015 were R6 000. Calculate the total over- or under-applied manufacturing overheads for all three jobs combined for September 2015, and draft the journal entry that would usually be used to deal with this over- or under-application in the company's books at the end of the period.

6. Oct/Nov 2015, Q2.2(a)9 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Progressio Limited, a company in the same group as Thabang Traders (Pty) Ltd, manufactures a single product using a process costing system. For September 2015, opening work-in-progress amounted to 30 000 units that were 70% complete, and closing work-in-progress amounted to 25 000 units that were 80% complete. During the month, 118 000 new units were put into production and 108 000 units were completed and transferred. Normal losses are estimated at 5% of the units that reach or pass the wastage point, and these losses occur when the process is 90% complete. Raw materials are added at the beginning of the process, while conversion takes place evenly throughout the process. Prepare the quantity statement for Progressio Limited for September 2015, based on the first-in-first-out (FIFO) method of inventory valuation.

7. Oct/Nov 2015, Q2.2(b)3 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Using the same September 2015 information for Progressio Limited (opening work-in-progress of 30 000 units 70% complete; closing work-in-progress of 25 000 units 80% complete; 118 000 units put into production; 108 000 units completed and transferred; normal losses of 5% of units reaching the wastage point, which occurs at 90% completion; raw materials added at the start of the process and conversion occurring evenly throughout), the cost records showed opening work-in-progress costs of R260 000 for raw materials and R168 000 for conversion, and costs added during September 2015 of R1 062 500 for raw materials and R994 500 for conversion. Prepare the production cost statement for Progressio Limited for September 2015, based on the first-in-first-out (FIFO) method of inventory valuation.

8. Oct/Nov 2015, Q2.312 marks

   This question relates to three companies that belong to the same group, each using a different costing system: Thabang Traders (Pty) Ltd uses job costing, Progressio Limited uses process costing, and Ngoato (Pty) Ltd uses joint and by-product costing. All three parts (A, B and C) must be answered, and the information given for each part relates both to that part and to the question as a whole. Ngoato (Pty) Ltd, also part of the same group, operates a process that yields two joint products, Yellow and Blue. In September 2015 the joint production costs totalled R20 000. There was no opening inventory, and the entire month's production was sold; both joint products were processed further after the split-off point. For Yellow: the selling price per kilogram of the final product was R150, the total cost of further processing after split-off was R2 500, the total selling and distribution costs of the final product were R1 200, and the quantity at the split-off point (equal to the quantity of the final product) was 200 kilograms. For Blue: the selling price per kilogram of the final product was R165, the total cost of further processing after split-off was R3 150, the total selling and distribution costs of the final product were R1 400, and the quantity at the split-off point (equal to the quantity of the final product) was 300 kilograms. Prepare a statement of comprehensive income for Ngoato (Pty) Ltd for the month ended 30 September 2015, allocating the joint costs according to the physical standard method, and include separate columns for Yellow and Blue as well as a Total column.

9. May/Jun 2015, Q2.a6 marks

   Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. For Process Perfect Limited's April 2015 production data described above, prepare the quantity statement for April 2015, applying the weighted average method of inventory valuation.

10. May/Jun 2015, Q2.b3 marks

    Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. Using the same April 2015 information for Process Perfect Limited, prepare the production cost statement for April 2015, applying the weighted average method of inventory valuation.

11. May/Jun 2015, Q2.c.i1 mark

    Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. Considering the Process Perfect Limited scenario for April 2015, indicate whether the following statement is true or false: a portion of the rand value of the normal loss will be allocated to closing inventory in the cost allocation statement.

12. May/Jun 2015, Q2.c.ii1 mark

    Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. Considering the Process Perfect Limited scenario for April 2015, indicate whether the following statement is true or false: abnormal losses will be written off as a period cost and will not be included in the valuation of inventory.

13. May/Jun 2015, Q2.c.iii1 mark

    Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. Considering the Process Perfect Limited scenario for April 2015, indicate whether the following statement is true or false: abnormal losses are sometimes also referred to as 'controllable losses'.

14. May/Jun 2015, Q2.d8 marks

    Process Perfect Limited manufactures a single product and uses a process costing system. For the month of April 2015 the company recorded the following: opening work in progress ("opening WIP") as at 1 April, which was 55% complete, amounted to 18 000 units; closing work in progress ("closing WIP") as at 30 April, which was 70% complete, amounted to 20 000 units; new units put into production during April 2015 totalled 80 000 units; and units completed during April 2015 totalled 70 000 units. Additional information: normal losses are estimated at 3% of the units that reach/pass the wastage point; normal losses occur when the process is 60% complete; raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process. The relevant cost information was: opening WIP raw materials of R144 000 and conversion costs of R49 500; and costs added during April 2015 of R426 400 for raw materials and R235 850 for conversion. Now assume that, for Process Perfect Limited's April 2015 production, losses occur when the process is 90% complete instead of 60% complete. Prepare the quantity statement for April 2015 based on this revised wastage point, using the first-in-first-out (FIFO) method of inventory valuation.

15. May/Jun 2015, Q5.12 marks · multiple choice

    Candidates must answer the multiple-choice questions by writing, for each sub-question, the sub-question number together with the letter of the chosen alternative in the answer book (for example: 1.a). Note that where an alternative 'e' is offered, it should NOT be selected merely because the candidate's own answer differs from the other options only due to rounding. Identify in which one of the following situations a management accountant would most likely recommend using a process costing system rather than a job costing system.

16. May/Jun 2015, Q5.102 marks · multiple choice

    Candidates must answer the multiple-choice questions by writing, for each sub-question, the sub-question number together with the letter of the chosen alternative in the answer book (for example: 1.a). Note that where an alternative 'e' is offered, it should NOT be selected merely because the candidate's own answer differs from the other options only due to rounding. T. Thavhani (Pty) Ltd manufactures two products, Thophi and Tshidzimba, in a joint process. After the split-off point each product is separately processed further, at a cost of R5 per unit for Thophi and R2 per unit for Tshidzimba, before being marketed. Total joint costs for the year amounted to R1 200 000. During the year, 50 000 units of Thophi and 75 000 units of Tshidzimba were manufactured and sold. Using the physical standard method, determine the amount of joint costs for the year to be allocated to Thophi and Tshidzimba respectively.

17. Oct/Nov 2014, Q4(a)6 marks

    Mathembu Daniels (Pty) Ltd produces whisky using a process costing system. Raw materials are introduced at the start of the process, while conversion costs are incurred evenly throughout the process. For May 2014, the opening work-in-progress (WIP) stood at 70 000 units, 20% complete, with associated costs of R325 000 for material and R128 000 for conversion costs (CC). During the month, 150 000 units were put into production, incurring further costs of R560 000 for material and R1 800 000 for conversion costs. By month-end, 190 000 units had been completed and transferred out, while 25 000 units remained in closing WIP, which was 90% complete. Normal wastage is set at 4% of the units that reach the wastage point, and this wastage occurs at the end of the process. The company applies the FIFO method for inventory valuation. Using the May 2014 information for Mathembu Daniels (Pty) Ltd's whisky process (opening WIP of 70 000 units at 20% completion, 150 000 units put into production, 190 000 units completed and transferred, and 25 000 units in closing WIP at 90% completion, with normal wastage of 4% of units reaching the wastage point at the end of the process, valued under FIFO), prepare the quantity statement for the scenario.

18. Oct/Nov 2014, Q4(b)2 marks

    Mathembu Daniels (Pty) Ltd produces whisky using a process costing system. Raw materials are introduced at the start of the process, while conversion costs are incurred evenly throughout the process. For May 2014, the opening work-in-progress (WIP) stood at 70 000 units, 20% complete, with associated costs of R325 000 for material and R128 000 for conversion costs (CC). During the month, 150 000 units were put into production, incurring further costs of R560 000 for material and R1 800 000 for conversion costs. By month-end, 190 000 units had been completed and transferred out, while 25 000 units remained in closing WIP, which was 90% complete. Normal wastage is set at 4% of the units that reach the wastage point, and this wastage occurs at the end of the process. The company applies the FIFO method for inventory valuation. Based on the same May 2014 data for Mathembu Daniels (Pty) Ltd (material costs of R325 000 for opening WIP and R560 000 added during production; conversion costs of R128 000 for opening WIP and R1 800 000 added during production), prepare the production cost statement for the scenario.

19. Oct/Nov 2014, Q4(c)6 marks

    Mathembu Daniels (Pty) Ltd produces whisky using a process costing system. Raw materials are introduced at the start of the process, while conversion costs are incurred evenly throughout the process. For May 2014, the opening work-in-progress (WIP) stood at 70 000 units, 20% complete, with associated costs of R325 000 for material and R128 000 for conversion costs (CC). During the month, 150 000 units were put into production, incurring further costs of R560 000 for material and R1 800 000 for conversion costs. By month-end, 190 000 units had been completed and transferred out, while 25 000 units remained in closing WIP, which was 90% complete. Normal wastage is set at 4% of the units that reach the wastage point, and this wastage occurs at the end of the process. The company applies the FIFO method for inventory valuation. For Mathembu Daniels (Pty) Ltd's May 2014 whisky process, where normal wastage amounts to 4% of the inputs reaching the wastage point (which occurs at the end of the process), calculate the Rand value of the normal loss and allocate it appropriately for purposes of the cost allocation statement of the scenario.

20. Oct/Nov 2014, Q4(d)6 marks

    Mathembu Daniels (Pty) Ltd produces whisky using a process costing system. Raw materials are introduced at the start of the process, while conversion costs are incurred evenly throughout the process. For May 2014, the opening work-in-progress (WIP) stood at 70 000 units, 20% complete, with associated costs of R325 000 for material and R128 000 for conversion costs (CC). During the month, 150 000 units were put into production, incurring further costs of R560 000 for material and R1 800 000 for conversion costs. By month-end, 190 000 units had been completed and transferred out, while 25 000 units remained in closing WIP, which was 90% complete. Normal wastage is set at 4% of the units that reach the wastage point, and this wastage occurs at the end of the process. The company applies the FIFO method for inventory valuation. Using all the information provided for Mathembu Daniels (Pty) Ltd's May 2014 whisky production process (including the quantity statement, production cost statement and the allocated normal loss value), prepare the cost allocation statement for the scenario.

21. Oct/Nov 2013, Q1.62 marks · multiple choice

    Question 1 is a multiple-choice section made up of ten short questions, numbered 1.1 to 1.10, each worth 2 marks. For each one you must write down the question number together with the letter (A, B, C or D) of the option you consider correct. The following data relates to two joint products, Isitya and Ikopi. For Isitya: sales at the split-off point are R120 000, sales after further processing are R190 000, the joint cost allocated up to the split-off point is R50 000, and further processing costs are R30 000. For Ikopi: sales at the split-off point are R90 000, sales after further processing are R150 000, the joint cost allocated up to the split-off point is R35 000, and further processing costs are R30 000. Based on this information, which product(s) should be sold at the split-off point and which product(s) should be sold after further processing? A. Isitya: split-off point; Ikopi: split-off point; B. Isitya: further process; Ikopi: split-off point; C. Isitya: split-off point; Ikopi: further process; D. Both Isitya and Ikopi must be processed further.

22. Oct/Nov 2013, Q4(a)7 marks

    Simple Snacks (Pty) Ltd manufactures a single product through one process and applies a process costing system. For June 2013 the following unit data apply: work-in-process on 1 June 2013 stood at 300 000 units, 20% completed; work-in-process on 30 June 2013 stood at 240 000 units, 90% completed; 400 000 units were started (put into production) during June; and 420 000 units were completed during June. Additional information: raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process; normal losses are estimated at 4% of the units that reach the wastage point. Cost details for June 2013 were: work-in-process on 1 June 2013 comprised R1 050 000 of material cost and R432 000 of conversion cost; current production cost for the month comprised R1 456 000 of material cost and R2 029 000 of conversion cost. Using the data given for Simple Snacks (Pty) Ltd for June 2013, prepare the quantity statement for June 2013 using the weighted average method, assuming that wastage occurs at the point where the process is 10% complete.

23. Oct/Nov 2013, Q4(b)8 marks

    Simple Snacks (Pty) Ltd manufactures a single product through one process and applies a process costing system. For June 2013 the following unit data apply: work-in-process on 1 June 2013 stood at 300 000 units, 20% completed; work-in-process on 30 June 2013 stood at 240 000 units, 90% completed; 400 000 units were started (put into production) during June; and 420 000 units were completed during June. Additional information: raw materials are added at the start of the process while conversion costs are incurred evenly throughout the process; normal losses are estimated at 4% of the units that reach the wastage point. Cost details for June 2013 were: work-in-process on 1 June 2013 comprised R1 050 000 of material cost and R432 000 of conversion cost; current production cost for the month comprised R1 456 000 of material cost and R2 029 000 of conversion cost. Using the data given for Simple Snacks (Pty) Ltd for June 2013, prepare the quantity statement for June 2013 using the FIFO method, assuming that wastage occurs at the end of the process.

24. May/Jun 2013, Q1.72 marks · multiple choice

    Question 1 is a multiple-choice question section made up of ten individual questions, numbered 1.1 to 1.10, each worth 2 marks. For each one you must write down the question number together with the letter (A, B, C or D) of the option you believe is correct. Chachingo Ltd manufactures three joint products (Aye, Bee and Cee) and one by-product (Dee) in a single process. For March 2013, actual production at 100% capacity was 20 000 units of Aye, 25 000 units of Bee, 10 000 units of Cee, and 2 000 units of Dee. All three joint products can be processed further into superior versions called Super Aye, Super Bee and Super Cee; however, because of strict quality control at the end of the process, further processing after split-off results in a rejection of 10% of the final product. If products are processed further, Super Aye sells for R20 per unit with additional processing costs of R4 per unit, Super Bee sells for R15 per unit with additional processing costs of R4 per unit, and Super Cee sells for R25 per unit with additional processing costs of R5 per unit. Costs incurred in the joint process were: direct material R238 500, direct labour R143 100, and manufacturing overheads R95 400. The by-product Dee is sold for R3 per unit. Assuming a regular market exists for the by-product, what is the total amount of joint costs to be allocated among the joint products?

25. May/Jun 2013, Q1.82 marks · multiple choice

    Question 1 is a multiple-choice question section made up of ten individual questions, numbered 1.1 to 1.10, each worth 2 marks. For each one you must write down the question number together with the letter (A, B, C or D) of the option you believe is correct. Using the same information about Chachingo Ltd's joint products Aye, Bee and Cee and by-product Dee for March 2013 (production of 20 000, 25 000, 10 000 and 2 000 units respectively at 100% capacity; joint costs of R238 500 direct material, R143 100 direct labour and R95 400 manufacturing overheads; by-product Dee sold at R3 per unit; and, if processed further, Super Aye selling at R20 with R4 additional processing cost per unit, Super Bee selling at R15 with R4 additional processing cost per unit, and Super Cee selling at R25 with R5 additional processing cost per unit, subject to a 10% rejection rate on further processing), what profit is attributed to product Super Bee if the total production is sold and the company uses the physical standard (units) method to allocate joint costs? Round your answer off to the nearest rand.

26. May/Jun 2013, Q8.a7 marks

    Bontebo (Pty) Ltd manufactures a single product through one continuous process and applies a process costing system. For March 2013 the following unit data apply: work-in-process on 1 March 2013 stood at 12 000 units and was 60% complete; 38 000 units were started during the month; 35 000 units were completed during the month; and work-in-process on 31 March 2013 amounted to 10 000 units, 20% complete. Additional information: (1) Bontebo (Pty) Ltd uses the FIFO method of inventory valuation; (2) wastage occurs at the point where the process is 30% complete; (3) raw material is introduced at the start of the process while conversion costs are incurred evenly throughout the process; (5) normal loss is estimated at 10% of the units that reach the wastage point; (6) cost data for March 2013 are as follows - opening work-in-process on 1 March 2013 consisted of material of R64 800 and conversion cost of R18 720, while current production costs incurred during the month were material of R209 000 and conversion cost of R118 940. Using the information given for Bontebo (Pty) Ltd for March 2013, prepare the quantity statement for the month, showing the flow of units including opening and closing work-in-process, units started, completed, normal loss and any equivalent units required under the FIFO method.

27. May/Jun 2013, Q8.b3 marks

    Bontebo (Pty) Ltd manufactures a single product through one continuous process and applies a process costing system. For March 2013 the following unit data apply: work-in-process on 1 March 2013 stood at 12 000 units and was 60% complete; 38 000 units were started during the month; 35 000 units were completed during the month; and work-in-process on 31 March 2013 amounted to 10 000 units, 20% complete. Additional information: (1) Bontebo (Pty) Ltd uses the FIFO method of inventory valuation; (2) wastage occurs at the point where the process is 30% complete; (3) raw material is introduced at the start of the process while conversion costs are incurred evenly throughout the process; (5) normal loss is estimated at 10% of the units that reach the wastage point; (6) cost data for March 2013 are as follows - opening work-in-process on 1 March 2013 consisted of material of R64 800 and conversion cost of R18 720, while current production costs incurred during the month were material of R209 000 and conversion cost of R118 940. Based on the same information for Bontebo (Pty) Ltd, prepare the production cost statement for March 2013, showing the cost per equivalent unit for material and conversion and the allocation of total costs.

28. May/Jun 2013, Q8.c1 mark

    Bontebo (Pty) Ltd manufactures a single product through one continuous process and applies a process costing system. For March 2013 the following unit data apply: work-in-process on 1 March 2013 stood at 12 000 units and was 60% complete; 38 000 units were started during the month; 35 000 units were completed during the month; and work-in-process on 31 March 2013 amounted to 10 000 units, 20% complete. Additional information: (1) Bontebo (Pty) Ltd uses the FIFO method of inventory valuation; (2) wastage occurs at the point where the process is 30% complete; (3) raw material is introduced at the start of the process while conversion costs are incurred evenly throughout the process; (5) normal loss is estimated at 10% of the units that reach the wastage point; (6) cost data for March 2013 are as follows - opening work-in-process on 1 March 2013 consisted of material of R64 800 and conversion cost of R18 720, while current production costs incurred during the month were material of R209 000 and conversion cost of R118 940. Calculate the Rand value of the normal loss for Bontebo (Pty) Ltd in terms of material cost only for March 2013, rounding the amount off to the nearest Rand.

29. May/Jun 2013, Q8.d4 marks

    Bontebo (Pty) Ltd manufactures a single product through one continuous process and applies a process costing system. For March 2013 the following unit data apply: work-in-process on 1 March 2013 stood at 12 000 units and was 60% complete; 38 000 units were started during the month; 35 000 units were completed during the month; and work-in-process on 31 March 2013 amounted to 10 000 units, 20% complete. Additional information: (1) Bontebo (Pty) Ltd uses the FIFO method of inventory valuation; (2) wastage occurs at the point where the process is 30% complete; (3) raw material is introduced at the start of the process while conversion costs are incurred evenly throughout the process; (5) normal loss is estimated at 10% of the units that reach the wastage point; (6) cost data for March 2013 are as follows - opening work-in-process on 1 March 2013 consisted of material of R64 800 and conversion cost of R18 720, while current production costs incurred during the month were material of R209 000 and conversion cost of R118 940. Calculate the total Rand value of the closing work-in-process for Bontebo (Pty) Ltd as at 31 March 2013 that will be included in the cost allocation statement.