Course Hero Logo

D which costing method absorption costing or variable

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 11 - 13 out of 25 pages.

(d) Which costing method, absorption costing or variable costing, is more appropriate for thepurpose of performance evaluation?Why?(4 marks)
SMU Classification: Restricted18. YWC Corporation manufactures a small travelling alarm clock using a two-department process.The two departments are the Assembly and Finishing Departments. The Assembly Departmentassembles the inner part of the clocks and transfers the parts to the Finishing Department.Once the inner part units have been transferred from the Assembly Department into the FinishingDepartment, Direct material X is added at the beginning of the process. Direct Material Y is addedwhen the process is 70% complete. Conversion costs are applied uniformly throughout the process.The weighted-average method of process costing is used. Information for the Finishing Departmentfor the month of April is as follows:Work in process inventory on 1 April:Number of units (65% complete)14,000Transferred-in costs$35,000Direct material X$11,200Conversion costs$24,570Units transferred-in from Assembly Department during April:Number of units45,000Transferred-in costs$112,500Units completed during April42,000Costs added during April:Direct material X$36,000Direct material Y$29,400Conversion costs$109,485Work in process inventory on 30 April:Number of units (45% complete)17,000Required:For April and with respect to the Finishing Department,(a) Compute the equivalent units (EU) for Direct Material Y.(2 marks)
(b) Compute the equivalent units (EU) for Conversion Cost.
Page 12 of 25

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 25 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
N/A
Tags

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture