Remington Inc. is contemplating the use of process costing to track the costs of its operations. The operation consists of three segments (departments): Receiving, Shipping, and Delivery. Containers are received at Remington€™s docks and sorted according to the ship they will be carried on. The containers are loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the Receiving Department.
Remington wants to begin using process costing in the Shipping Department. Direct materials represent the fuel costs to run the ship, and €œContainers in transit€ represents work in process. Listed below is information about the Shipping Department€™s first month€™s activity.

Instructions
(a) Determine the physical flow of containers for the month.
(b) Calculate the equivalent units for direct materials and conversioncosts.

Transcribed Image Text:

Containers in transit, April 1 Containers loaded Containers in transit, April 30 0 1,200 350, 40% of direct materials and 20% of conversion costs