QUESTION MARKS
ZimbaChippi Pty Ltd produces healthy alternative snacks. All materials are added at the beginning
of the process and conversion costs are incurred evenly throughout the process. A quality inspection
is conducted of the way through production at which point of all units started are usually
found to be defective. During the year units were found to be defective.
The following relates to the current year:
Direct labour worked hours at R per hour.
Opening Raw Materials R
Purchased Raw Materials R
Closing Raw Materials R
Opening Work in Progress
Closing Work in Progress complete
Units Started
Units Completed
Normal capacity is completed units, while the total fixed costs amounted to R The
company uses a FIFO costing system.
Required
a Calculate the cost per equivalent unit
b Calculate closing WIP
Total
