Total Marks:28 Total Time:50mins

Question: 1

ZF Industries manufactures a special chemical that is used by pharma companies.

The following information relates to the first process for the month of November 2020:

Litres Rs.
Opening WIP-60% complete 1,500
Cost of opening WIP:
Material 750,000
Conversion Cost 660,000

Costs incurred during the month:

Direct Material 15,000 8,250,000
Direct Labour 5,250,000
Actual FOH 4,987,500

Output transferred to Process 2 12,250 -

Closing WIP-75% complete 1,700 -

Other Information:
-FOH is applied @ 100% of Direct Labour cost.
-Normal loss is expected at 10% of input during the month.
-Inspection for losses occur when the process is 65% complete.
-Scrap value for defective units is Rs. 150 per litre.
-ZF uses FIFO to value its inventories.

Required:
Work in Process account for Process 1 Marks:15

Question:2

During November, these transactions took place in Singer Ltd, a

company that uses job order costing:

(i) Materials purchased on account, Rs. 35,600

(ii) Materials issued: to fill requisitions on job orders Rs.25,250:

factory supplies,Rs.1,300.
(iii) Materials issued to complete defected units Rs.200.

(iv) Materials returned to the vendor Rs.225.

(v) Materials returned to the storeroom: from job orders,

Rs.1,090; factory supplies,Rs.125.

(vi) Total payroll was as follows;

Recorded liability for net pay to workers Rs.72,054.

Withheld tax, was Rs. 5,616.

(vii) The payroll was distributed as follows: direct labor, Rs.

66,870; indirect labor, balance of payroll.

(viii) Depreciation for the month: buildings,Rs.750;

machinery,Rs.800.

(ix) Property tax accrued Rs.750; insurance with a credit to the

prepaid account,Rs.850.

(x) Factory overhead is charged to production at a rate of

Rs.1.20 per direct labor hour. Records show 18,900 direct labor
hours worked during the month.

(xi) Close out the over-or under applied factory overhead to

cost of goods sold.

(xii) Cost of goods completed Rs.122,020.

Goods costing Rs. 108,300 were sold on account at a sales price of

Rs.159,750.

Required: Prepare relevant journal entries in the books of Singer

Ltd.
Marks:13