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Cookie Master Inc. manufactures bar cookies. These are produced in three separate departments sequentially: Blending, Forming, and Packaging. The following information of process input, output
Cookie Master Inc. manufactures bar cookies. These are produced in three separate departments sequentially: Blending, Forming, and Packaging. The following information of process input, output and work in process relates to the Forming department for the month of August 2023: The opening and closing work in process are respectively 60 per cent and 40 per cent complete as to conversion costs. Raw materials are added at the beginning of the manufacturing process. However, conversion costs are incurred evenly throughout the manufacturing process. Spoilages are assumed to occur at the stage of completion where inspection takes place. All spoilages are assumed to be from units started during the month. Inspection takes place when the products are 80% complete. The opening work in process included the transferred-in costs of $63,546 from the Blending department, raw material costs of $29,904 and conversion costs of $60,556. Costs incurred during the period were: The normal spoilage is 5 per cent of the units inspected. d) Compare and explain how the difference in the method of process costing will affect the values of completed units and the ending work in process in the forming department. (6 marks)
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