Concept explainers
(1) Equivalent units of production with respect to (a) conversion and (b)direct materials.
Concept Introduction:
Process costing is mainly used in manufacturing units, wherein bulk units of standard goods are produced at a time in lots. It is used for each department of production to determine the costs assigned to units transferred out and ending work in process.
Requirement 1
To Determine:
Equivalent Units of Production with respect to (a) conversion and (b) Direct Materials.
(2) Conversion Cost and Direct Material Cost per unit.
Concept Introduction:
Process Costing:
Process costing is mainly used in manufacturing units, wherein bulk units of standard goods are produced at a time in lots. It is used for each department of production to determine the costs assigned to units transferred out and ending work in process.
Requirement 2
To Determine:
Conversion cost and Direct Material cost per equivalent unit.
- Conversion Cost and Direct Material Cost Assigned to (a) completed and transferred units and (b) ending work in process.
Concept Introduction:
Process Costing:
Process costing is mainly used in manufacturing units, wherein bulk units of standard goods are produced at a time in lots. It is used for each department of production to determine the costs assigned to units transferred out and ending work in process.
Requirement 3
- One page memo to Plant manager describing how his error affected the September Financial Statements.
Concept Introduction:
Process Costing:
Process costing is mainly used in manufacturing units, wherein bulk units of standard goods are produced at a time in lots. It is used for each department of production to determine the costs assigned to units transferred out and ending work in process.
Requirement 4
One Page memo to Plant Manager for making an error in ascertaining Closing Inventory.

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