(TCO 3) Why is it necessary to use equivalent units in a process costing system?
(TCO 7) Each year, ACE Engines surveys 7,600 former and prospective customers
regarding satisfaction and brand awareness. For the current year, the company is
considering outsourcing the survey to RBG Associates, who have offered to conduct the
survey and summarize results for $50,000. Robert Ace, the president of ACE Engines,
believes that RBG will do a higher-quality job than his company has been doing, but is
unwilling to spend more than $12,000 above current costs. The head of bookkeeping for
ACE has prepared the following summary of costs related to the survey in the prior year.
Printing (done by Lester Print Shop)
Salary of Pat Fisher, part-time employee who stuffed
envelopes and summarized data when surveys were
returned (130 x $16)