Reference no: EM132549125

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:

Units

21,000 84,000 73,500 31,500

Percent Completed

Work-in-process, 1 March

Transferred from Process 1 and started in Process 2 Completed and transferred out Work-in-process, 31 March

Materials 80%      30%

Materials ($) 19,000 264,600

system.

Conversion 60%        40%

Conversion ($) 17,000       183,750

Costs for March Work-in-process, 1 March Added during the month Transferred-in from Process 1 ($) 120,000  462,000

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

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.