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this is hard Question 3 Cepat Sdn. Bhd. (CSB) produces a...

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Accounting

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Question 3 Cepat Sdn. Bhd. (CSB) produces a liquid fertiliser for local farmers. The fertiliser is made in two consecutive production processes. The cost accountant has provided the following information for the coming month. There were no opening or closing inventories at the beginning and end of either process. All losses are sold to a reprocessing company. Filtering Packaging RM RM Direct materials (15,000 litres) 15,000 NIL Direct labour 4,000 5,000 Production overheads 1,370 3,476 Scrap value of losses per litre 0.80 0.90 Output in litre Normal loss as % of total inputs 13,000 7% 12,500 4% (a) Required: Prepare the following accounts: (i) the Filtering process account; (6 marks) the Packaging process account; (6 marks) (iii) the normal loss account. (5 marks) (b) Explain ANY TWO (2) reasons why job costing is an inappropriate costing method for Cepat Sdn. Bhd. (2 marks) (c) Explain TWO (2) challenges that Cepat Sdn Bhd. will face when the process costing method is used to determine the output cost of the liquid fertilizer. (6 marks) [Total: 25 marks)

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