Uncle Tom’s factory in Tasmania is responsible for manufacturing the Direct Calorie Bar. The factory employs a process costing system. Due to the management accountant still suffering from food poisoning, you have been asked to prepare the end of period product costing. The process for manufacturing the ‘Direct Calorie Bar’ involves mixing all the ingredients. The ingredients are then poured into moulds and injected with extra pure sugar and snap-frozen. It is assumed for process costing purposes that all raw material ingredients are added at the commencement of the process. Packaging occurs when the manufacturing process is 70% complete. For the purpose of accounting, the conversion costs of manufacturing are assumed to occur evenly across the whole of the production cycle.

The following information relates to the production of Direct Calorie Bar during the month of November.

Work-in-process: 1 November 20208,500 units

Stage of completionValue
Raw materials100% $ 170,000
Packaging100% $ 63,750
Conversion65% $ 260,000

Work-in-process: 30 November 2020 15,300
60% complete

Chocolate Bars commenced during November36,000

Cost incurred during production:
Raw materials $ 160,000
Packaging $ 82,500
Conversion $ 350,000

Required:
a) Using the Weighted Average Cost Method determine the cost value of closing WIP and the cost value of goods transferred out during the period. (10 marks)
b) Using the First in First Out (FIFO) method determine the cost value of closing WIP and the cost value of goods transferred out during the period. (10 marks)