Reference no: EM132534283

Susan Company produces a product called 'N96' which required to go through two processes, Process 1 and Process 2. The following information relates to Process 2 for the month of March 2020:

Percent Completed Work-in-process, 1 March Units 21,000 Materials 80% Conversion 60%

Transferred from Process 1 and started in Process 2 Units 84,000

Completed and transferred out 73,500 Work-in-process, 31 March Units 31,500 Materials 30% Conversion 40%

Costs for March

Work-in-process 1 March Transferred-in from Process 1($)120,000

Materials ($)19,000

Conversion ($) 17,000

Added during the month Transferred-in from Process 1 462,000

Materials ($)264,600

Conversion ($) 183,750

It is the company's policy to adopt FIFO method in its process costing system.

Required:

Question (a) Determine the equivalent units for transferred-in from Process 1, materials and conversion for March.

Question (b) Determine the cost per equivalent unit for transferred-in from Process 1, materials and conversion for March.

Question (c) Determine the total cost of ending work-in-process inventory and the total cost of units transferred to finished goods in March.

Question (d) Briefly explain how the adoption of a lean manufacturing approach affects process costing.

Question (e) 'Normal loss is included in the cost of good output units, while abnormal loss is recorded as a period cost.' Comment on this statement.