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Management Accounting problem Susan Company produces a product called N96' which required to go through two processes, Process 1 and Process 2. The following information
Management Accounting problem
Susan Company produces a product called N96' which required to go through two processes, Process 1 and Process 2. The following information relates to Process 2 for the month of March 2020: Units Percent Completed Materials Conversion 80% 60% Work-in-process, 1 March Transferred from Process 1 and started in Process 2 Completed and transferred out Work-in-process, 31 March 21,000 84,000 73,500 31,500 30% 40% Costs for March Work-in-process, 1 March Added during the month Transferred-in from Process 1 ($) 120,000 462,000 Materials ($) 19,000 264,600 Conversion ($) 17,000 183,750 It is the company's policy to adopt FIFO method in its process costing system. (d) Briefly explain how the adoption of a lean manufacturing approach affects process costing. (3 marks) (e) Normal loss is included in the cost of good output units, while abnormal loss is recorded as a period cost.' Comment on this statement. (4 marks)Step by Step Solution
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