Question 2 Balkan Bhd, manufatures a caulking compound that goes through three processing stage priorto completion. Information on work in the first department, Cooking Department, is givenbelow for May: Production data: Pounds in process, May 1; 10,000(materials 100% complete; conversion 80% complete) Pounds started into production during May 100,000Pounds in process, May 31; 15,000(materials 60% complete; conversion 20% complete) Cost data: Work in process inventory, May 1: Materials cost RM1,500 Conversion cost RM7,200 Cost added during May: Materials cost RM154,500 Conversion cost RM90, 800 You need to prepare the cost reconciliation report for this process costing, but you are not surewhich method is the most suitable method to be implemented in the company. You need toanalyse which of these methods, either weighted average costing method or first in first outcosting method give higher cost of the finished goods and explain the differences between thetwo costing methods. The report must also include a physical flow schedule and an equivalentunit schedule. (40 marks)
