image not availableREVISION QUESTION BANK - MANAGEMENT ACCOUNTING (F2/ FMA) Information for last month for each process is as follows: Process I Raw material input 50,000 litres at a cost of $365,000 Conversion costs $256,000 Output to Process II 47,000 litres Process II Opening work in progress 5,000 litres (40% complete for conversion costs) valued at $80,000 Conversion costs $392,000 Closing work in progress 2,000 litres (50% complete for conversion costs) Required: (a) Prepare the Process I account for last month. (5 marks) (b) Calculate in respect of Process II for last month: (i) the value of the completed output; and (ii) the value of closing work in progress. (5 marks) (10 marks) Question 39 MAYBUD Maybud operates Process X which creates two joint products, A and B, in the ratio of 3:2 by volume. There is no work in progress. The following information relates to Process X for last month: (i) 80,000 litres of raw materials with a total cost of $158,800 were input into the process and conversion costs were $133,000. (ii) A normal process loss of 5% of the input was expected. An actual loss of 5,500 litres was identified at the end of the process. Losses have a realisable value of $0.75 per litre. It is company policy to apportion joint costs to products using the net realisable value method. After Process X, both product A and product B are further processed at a cost of $2 per litre and $3 per litre respectively. The final selling prices of the products are as follows: Product $ per litre A 8 B 12 Required: (a) Prepare the process account for last month including the output volume and cost of products A and B separately. (7 marks) (b) Explain clearly how an abnormal gain arises in a process. Indicate where it would appear in a process account and how it would be valued. (3 marks) (10 marks) ©2017 DeVry/Becker Educational Development Corp. All rights reserved. 47