Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50...
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Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March. Work in process, March 1 (60% complete as to conversion costs) Units started in March Units transferred to Finishing Department in March Work in process, March 31 (40% complete as to conversion costs) 160,000 620,000 650,000 130,000 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 60 percent (from 40 percent). c-1. What effect will this change have on the unit costs of units transferred to finished goods in March? c-2. Would this be ethical? c-3. Is this likely to be a successful strategy for affecting income over a long period of time? Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March. Work in process, March 1 (60% complete as to conversion costs) Units started in March Units transferred to Finishing Department in March Work in process, March 31 (40% complete as to conversion costs) 160,000 620,000 650,000 130,000 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 60 percent (from 40 percent). c-1. What effect will this change have on the unit costs of units transferred to finished goods in March? c-2. Would this be ethical? c-3. Is this likely to be a successful strategy for affecting income over a long period of time?
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a Compute the equivalent units for materials costs and for conversion costs using the weightedaverage method Materials Units transferred out 630000 un... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
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