Process costing - Exercise 2

Below are the details for two departments in Proses Kos Sdn Bhd. Currently, the company is manufacturing a sofa set which involving Assembly Department and Painting Department.

	Assembly (P1)	Painting (P2)
Direct material	RM160,000	RM85,000
Direct labour	RM  80,000	RM60,000
Direct expenses	RM  40,000
Overheads	40% of direct labour cost	RM42,000

The input for direct material for Assembly Department (P1) is 4,000 units. Normal loss is expected at 5% of input materials and all scrap can be sold for RM5.00 per unit. At the end the process 3,600 units were transferred to Painting Department.

The work in progress at the beginning of the period is 800 units which cost;

Input materials RM64,000, Added materials RM43,500, Direct labour RM18,640 and overhead RM6,100.

The work in progress at the end of the period is 500 units which consist of 70% of conversion cost.

At the end of the process, 4,200 units of finished products were transferred to store. Expected losses for this department are estimated to be 5% of production. All losses can be sold as scrap for RM12.00 per unit.