Reference no: EM132534213

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:

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

Transferred from Process 1 and started in Process 2 (84,000 unit)

Completed and transferred out (73,500unit)

Work-in-process, 31 March (31,500 unit) (Percent Completed, Materials 30%, Conversion 40%)

Costs for March
(Transferred-in from Process 1 ($), Materials ($), Conversion ($))

Added during the month (120,000, 19,000, 17,000)
Work-in-process, 1 March (462,000, 264,600, 183,750)
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. (3 marks)

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