Reference no: EM132567149

Sedap Rasa Sdn Bhd produces a product by passing through two consecutive processes. The following data are related to the two processes for January 2018.

Process A

Input for process A:

Material RM240,000 (RM30 per kg)

Direct Labour RM80,000

Production overhead RM64,000

Normal loss is expected to be 5% of materials input and all scrap can be sold at RM10 per kg. Inspection was made at the end of the process. The actual output transfer to process B was 7,000kg.

Process B

Work in progress (WIP) as at 1 January 2018 was 1,000kg valued at RM54,740. The WIP was 100% complete for transfer from Process A, 80% complete for added materials and 50% complete for conversion cost.

Costs incurred in January 2018:

Added materials RM69,600

Conversion cost RM57,440

Expected loss is 400kg and these losses can be sold at RM10 per kg. Inspection was made at the end of the process and it was identified that actual scrapped amounted to 200kg.

Partially completed outputs were found at the end of the process. They were 100% complete for transfer from Process A, 70% complete for added materials and 60% complete for conversion costs.

Output completed and transferred to finished goods stock were 7,000kg.

Required:

Question a. Prepare process account for Process A for January 2018

Question b. Prepare process account for Process B for January 2018 showing all the relevant statements