Paradise Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department, Cutting, for a recent month.

Production data:
Units work in process, beginning; 70% complete with respect to materials and 80% complete with respect to conversion	100
Units started into production during the month	11,000
Units completed and transferred out	10,700
Units work in process, ending; 50% complete with respect to materials and 20% complete with respect to conversion	400
Cost data:
Work-in-process, beginning:
Materials cost	525
Conversion cost	1,696
Costs added to production during the month:
Materials cost	83,405
Conversion cost	223,606

Required:

1. Prepare a production report for the first processing department. Use the following steps in preparing your report:

1. Prepare a quantity schedule and a computation of equivalent units.

(6 marks)

2. Compute the costs per equivalent unit for the month.

(7 marks)

3. Using the data from Requirement (i) and (ii) above, prepare a cost reconciliation.
4. marks)

2. What characteristics of the production process would lead a company to use process costing rather than job costing? give examples of companies that might use process costing.