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Question Two Pass-Well Company Limited produces a product that passes through two processes, Process 1...

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Accounting

Question Two

Pass-Well Company Limited produces a product that passes through two processes, Process 1 and Process 2. Details of activities for the month of December, 2020 is as follows;

Process 1Process 2

Material introduced (4,000 u..;@GH200.00

Material addedGH25,000.00

Labour Costs (@GH400 per hour)200hrs600hrs

Output in units3,500units3,150units

Scrap value of normal lossGH20 per unitGH40 per unit

Note;

i.Overhead is absorbed at 80% of labour costs.

ii.Normal loss is estimated at 10% for both process.

iii.No opening and closing stocks

a.You are required to prepare the relevant accounts

b.You are required to prepare the relevant Accounts With practical example, differentiate between cost assignment and cost apportionment; product cost and period costs; direct cost and indirect cost

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