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.