Remington Inc is contemplating the use of process costing to
Remington Inc. is contemplating the use of process costing to track the costs of its operations. The operation consists of three segments (departments): Receiving, Shipping, and Delivery. Containers are received at Remington’s docks and sorted according to the ship they will be carried on. The containers are loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the Receiving Department.
Remington wants to begin using process costing in the Shipping Department. Direct materials represent the fuel costs to run the ship, and “Containers in transit” represents work in process. Listed below is information about the Shipping Department’s first month’s activity.

(a) Determine the physical flow of containers for the month.
(b) Calculate the equivalent units for direct materials and conversioncosts.
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