Assignment Details:
QUESTION 1 (14 marks)
Big Ginger Ltd produces crystallised and chocolate coated ginger pieces at its Gothenburg factory. The ginger is purchased by the factory as clean, pealed, and raw ginger. Big Ginger Ltd chops the ginger into uniform pieces which are then transferred to other departments for further processing to crystallised ginger or chocolate coated ginger treats.
In the Chopping Department, the process-costing system at Big Ginger Ltd has two cost categories–Direct materials and conversion costs.
Direct materials, being the pealed ginger and secret other ingredients, are added at the beginning of the process. Conversion costs are added evenly during the process.
When the Chopping Department finishes with the ginger, it is immediately transferred to either Crystallisation or Chocolate Coating Departments, and then packaged for sale.
Big Ginger Ltd uses the weighted-average method of process costing. Data for the Chopping Department for January 2018 are:
|
Physical Units[kg]
|
Direct Materials
|
Conversion costs
|
Work in process, 1 January
|
20,000
|
$70,000
|
$3,600
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Started during January
|
200,000
|
|
|
Completed during January
|
210,000
|
|
|
Total costs added during January
|
|
$1,470,000
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$40,000
|
Opening work in process is 70% complete with regards to conversion costs and closing work in process is 80% complete with regards to conversion costs.
REQUIRED:
Produce a production cost report in order to calculate the cost of chopped ginger transferred out and the value of closing work in process in the Chopping department. Round any workings to 4 decimal places and the final answers to the nearest dollar.
COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969
This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). Thematerial in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a registered higher education provider CRICOS Provider Code 02426B.
Assessment Information
QUESTION 2 (15 marks)
Milka Chocolate Limited is located in Mount Vinson and produces quality chocolate for plain wrapped blocks, specialty boxed chocolates and chocolate figurines from its state of the art production facility.
The initial joint cost of production is $1,300,000 for the year. This cost results in an output of 2,600,000 kilograms of chocolate blocks.
Details relating to the 3 joint products are given below:
Chocolate
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Wrapped
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Boxed
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Figurines
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Quantity at split-off point
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1,000,000 kg
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1,000,000 kg
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600,000 kg
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Selling price at split-off point
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$ 2.00 per kg
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$ 2.00 per kg
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$ 2.00 per kg
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Separable cost
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$ 0.50 per kg
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$ 2.50 per kg
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$ 1.50 per kg
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Sales price of ultimate product
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$3.00 per kg
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$ 5.00 per kg
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$ 6.00 per kg
|
REQUIRED:
1. Allocate the joint cost between Wrapped, Boxed and Figurines using:
a) The Physical Units Method. (3 Marks)
b) The Relative Sales Value Method. Round your final answer to whole dollars. (3 Marks) c) Net Realisable Value Method. Round your final answer to whole dollars. (3 Marks)
2. Milka Chocolate Limited has a request from a prospective customer to further process its chocolate figurines into Chocolate Gift Baskets which will then be bought by the customer for $9.00 per kilogram. This will increase the separable costs of chocolate per kilogram to $3.00.
Would you advise the company to accept the offer? Why or why not? (6 Marks)
COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969
This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). Thematerial in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a registered higher education provider CRICOS Provider Code 02426B.
Assessment Information
QUESTION 3 (21 marks)
Chocmust Ltd buys and sells premium chocolates and sweets wholesale for distribution to retail outlets and has decided to prepare a cash budget for the quarter ending 31 March 2018.
As at 1 January 2018, the Cash at bank ledger account had a debit balance of $30,000. The following estimates have been made for the next three months:
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January $
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February $
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March $
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Sales
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100,000
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150,000
|
200,000
|
Purchases
|
75,000
|
100,000
|
125,000
|
Cash wages
|
15,000
|
20,000
|
28,000
|
Depreciation on Fixtures
|
5,000
|
5,000
|
5,000
|
Rental expenses
|
10,000
|
10,500
|
11,000
|
Insurance expenses
|
500
|
500
|
500
|
Loan repayment
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0
|
1,000
|
1,000
|
All sales are on credit.
It is expected that debtors will pay their accounts as follows:•50 per cent in the month following the sale.
•40 per cent in the second month following the sale.
•10 per cent in the third month following the sale.
Actual sales for the previous three months were as follows:•$300,000 in December 2017
•$250,000 in November 2017
•$150,000 in October 2017
Purchases are paid 50% in the same month, and 50% in the month following the sale. December purchases amounted to $50,000.
Rental expenses and insurance expenses are paid the following month after they are incurred. December expenses were as follows: Rental Expense $10,000 and Insurance Expense $500
REQUIRED:
Part A:Prepare a schedule of cash receipts from debtors for the Quarter ending 31st March 2018.
(7 marks)Part B:Prepare a Cash budget for the Quarter ending 31stMarch 2018. (14 marks)
COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969
This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). Thematerial in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a registered higher education provider CRICOS Provider Code 02426B.
Assessment Information
QUESTION 4 (9 marks)
SuperParkas Pty Ltd incurred the following costs for job number PP549, which consisted of 900 waterproof purple jackets for sale to an outdoor clothing store.
Direct material:
1 January Requisition no. 235: 1800 metres of Coated Plastic Material @ $8.50 per metre 3 January Requisition no. 718: 1100 metres of Nylon Mesh Material @ $3.25 per metre
Direct labour:
31 January Timesheet no. 45: 300 hours@$25 per hour
Manufacturing overhead:
Applied on the basis of direct labour hours @$13 per hour
Additional information:
Job PP549 was completed on 31 January.
REQUIRED:
Prepare a job cost sheet including dates & requisition / timesheet numbers and record the information given above and also a cost summary for Job PP549, including total cost and cost per jacket.
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