The Who’s of Whoville (WW) operate a thriving Christmas manufacturing business, manufacturing Christmas toys. Each toy goes through three departments: Moulding, painting and packaging. In the moulding department, latex, colour and a special dye is poured into toy moulds at the beginning of the process. A special finish is added to the toys at the end of the process. Conversion costs are added evenly throughout the moulding process. December data from the moulding department are as follows:

Toys Costs Beginning work in process inventory 0 Beginning work in process inventory $ 0 Started production 25,000 toys Costs added during October: Completed and transferred out to painting in October 19,000 Latex 75,000 Ending work in process inventory (55% of the way through the process) 6,000 Colour 6,250 Dye 2,500 Finish 4,000 Direct Labour 76,000 Manufacturing Overhead 19,000 Total Costs $182,750 WW needs your assistance with the above information. 

Assuming they are using process costing, determine the total costs of the units that are completed and transferred out and those left in ending work in process inventory (show your calculations!). 

In addition, briefly explain your results (i.e. what does your results mean in terms of pricing for the toys?) Cindy Lou Who, the controller for WW is considering moving to an activity-based costing system (ABC) as she has heard it provides better results.

 Prepare a separate memo to Cindy that describes some of the benefits and constraints of ABC (tied to WW) and what types of information WW would need to implement ABC. 

Answer rating: 100% (QA)

Requirement 1 Equivalent Units Physical Latex Color Dye Finish Conversion costs UNITS units eu eu eu ... View the full answer