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ACME Incorporated has five processing departments through which all product flows. Information for Department 2 for the most recent month is as follows: Beginning work

ACME Incorporated has five processing departments through which all product flows. Information for Department 2 for the most recent month is as follows:

Beginning work in process inventory in Department 2 consisted of 3,000 units that were 60% complete.

During the month, 61,000 units were received from Department 1.

58,000 good units were completed and transferred to Department 3.

When the units are 25% complete, they are inspected and all material is then added to the good units.

At the end of the month, 5,000 units in Department 2 were 75% complete. Remaining units were considered normal spoilage.

Normal spoilage is charged to manufacturing overhead.

Required: Prepare the first portion of the production report for Department 2: Quantity Schedule and the Equivalent Units of Production.

Which costing system is ACME Incorporated using? Why is that costing system appropriate for this company?

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