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15 marksProcess Costing

CAPE Accounting Unit 2 · 2011 · Paper 2 · Question 2(b)

Belmopan Company produces calendars in a one-process department using weighted-average process costing. Direct materials are added at the start; conversion costs are added uniformly. Beginning WIP: 22 500 units (40% conversion, direct materials 51 900, conversion 20 174). Units started: 130 000 units. Units completed: 124 000 units. Ending WIP: 28 500 units (60% conversion). Costs added: Direct materials 430 000, conversion costs 310 000.

Prepare a production report for Belmopan Company.

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Other parts of this question

  1. 2(a)(i)Assuming that Lawson Bravo Company uses an absorption costing system, compute its operating income for the year.[4 marks]
  2. 2(a)(ii)Assuming that Lawson Bravo Company uses a marginal costing system, compute its operating income for the year.[4 marks]
  3. 2(a)(iii)Reconcile the operating income figures computed in parts (a)(i) and (ii) above.[2 marks]
  4. 2(c)(i)State THREE fundamental differences between activity-based costing and traditional costing systems such as process costing.[6 marks]
  5. 2(c)(ii)Explain how cost drivers are selected in activity-based costing systems.[4 marks]

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