Two of the newer partners of BBP,LLC are looking at these forecasts and realize that the tax services they offer are fairly standardized in process and thinks they can be recorded as such. They think the firm should look at recording this in under a Process Costing methodology. They feel there are 2 major processes in which tax returns operate under, a data collection and data entry.

They want to view a process cost system for tracking the costs of the tax services using a weighted-average process costing method. All costs are incurred evenly throughout the process. They have provided the following data about the current clients to assist you:

Data Collection:

Beg WiP 12 Clients

Started During the Year 38 Clients

Completed and Transferred Out 42 Clients

End WiP (85% Complete) 8 Clients

Costs:

Beg WiP $201,066

Incurred During the Year:

Staff Labor 811,008

Manager Labor 268,840

Admin & Overhead 1,244,705

Data Entry:

Beg WiP 0 Clients

Started During the Year 50 Clients

Completed and Transferred Out 46 Clients

End WiP (30% Complete) 4 Clients

Costs:

Beg WiP $ -0-

Incurred During the Year:

Staff Labor 1,216,512

Manager Labor 1,075,360

Admin & Overhead 2,311,595

Required:

a. Based on the process costing system, what will the ending WiP for tax services DATA COLLECTION?

b. Based on the process costing system, total value transferred out of DATA ENTRY?

c. Based on the process costing system, what is the total cost for tax services for Client 15, compare this to the cost provided by the job order system.

d. Would you recommend this system, why or why not? (Provide reasons for or against the process cost system as compared to the job order system for tax services.)