Ludo Apparels Limited produces fashionable clothes for all

Ludo Apparels Limited produces fashionable clothes for all ages through two processes; cutting and assembly materials undergo these processes in cutting and assembly departments. At the beginning of August 2020, the cutting process has opening WIP of 200 units at N$8 102 and its breakdown was: 

                                                                Degree of Completion             N$

Material                                                100%                                          N$4950

Labour                                                  30%                                            N$986

Overheads                                            20%                                           N$2184

Total                                                                                                         N$8102

In August 2020, 1 000 units of materials were added to the cutting process. Due to limitations of the cutting machine, 10% of materials added to the cutting process were expected to become loss with a scrap value of N$10 per unit. It is the company’s cost accounting policy to deduct the scrap value of normal losses from the cost of materials in the current process. By end of August, 940 units of finished cutting process were transferred out to the next process: assembly. 100 units remained in closing Work In Progress and their degrees of completion of individual inputs were: 

Materials 100%

 Labour 60% 

Overheads 40% 

Costs incurred in August were:

 Materials N$20 700 

Labour N$ 5 074

 Overheads N$10 920

 REQUIRED: 

Prepare the process report for August 2020 using the weighted average method showing the following:

 2.1 Quantity statement (inclusive of equivalent units)

 2.2 Production cost statement per unit 

2.3 Cost allocation statement 

2.4 Journal entries to record: (i) Raw materials requisitioned by cutting department (ii) Items transferred from cutting department.

 2.5 Cutting Process account