QUESTION - Zauzi Company manufactures a high-quality fertilizer that has two departments involved in the production process which are Mixing Department and Finishing Department. In the Mixing Department, the raw material is added at the beginning of the process. Labor and overhead are applied continuously throughout the process called conversion.
The following information relates to production during May 2016 in the mixing department:
i) Cost incurred in work in process on 1 May 2016 (4,000 units, 75% complete as to conversion): Direct material, RM22,800 and conversion, RM41,880.
ii) Transferred to Finishing Department, 15,000kg
iii) Work in process, 31 May 2016, 5,000 units, 20% completed for conversion and 100% completed for direct material
iv) Cost incurred during the month of May 2016 are RM81,600 for direct material and RM201,800 for conversion.
The company uses weighted-average process costing to accumulate product costs.
Required:
a) Determine the equivalent units.
b) Compute the cost per equivalent unit.
c) Determine the total cost of ending work in process inventory and the total cost of unit transferred to the packaging department.
d) Prepare the cost reconciliation report for the mixing department for March.
e) Explain the condition would it be appropriate to use a process costing systems?
f) Briefly explain THREE (3) similarities between job order and process costing?