Nezuko Sdn. Bhd. specializes in producing Japanese daifuku (mochi) in Mont Kiara. Its production process consists of four stages: Mixing, Steaming, Forming, and Packing. In the Forming stage, the cooled mixture from the Steaming stage is formed into smaller seasonal shapes before it is ready for the packaging machine.

All materials are entered at the beginning of each process. Direct labor and manufacturing overhead costs are incurred uniformly throughout each process. Production and cost data for the mixing stage during February 2022 are presented below:

Production Data: Units Percentage of Completion Work-in-Process, 01 February 7,500 60% Started into production 123,000 Work-in-Process, 28 February 50,000 60%

Costs Data: RM Work-in-Process, 01 February 27,000 80% incurred for Direct Materials Direct Materials 246,000 Direct Labour 190,000 Manufacturing Overhead 16,700

The perishable nature of Nezukos raw materials requires the company to use the first-in- first-out (FIFO) system to account for its production and costs.

Required: a) Why is it important to account (cost) for equivalent units of production in the process costing?

b) How many units were started and completed in February 2022?

c) Compute the equivalent units of production for materials and conversion costs.

d) Compute the unit costs of production.

e) Show the assignment of costs to units completed and transferred out and in-process at the end of the production month.