Question - New Image Sports uses a process-costing system. For March, the company had the following activities:
Beginning work-in-process inventory (1/3 complete) 6,000 units
Units placed in production 24,000 units
Good units completed 18,000 units
Ending work-in-process inventory 10,000 units
Cost of beginning work in process $ 5,000
Direct material costs, current $18,000
Conversion costs, current $13,800
Direct materials are placed into production at the beginning of the process. All spoilage is normal and is detected at the end of the process. Ending WIP is 50% completed as to conversion.
Required:
A. Prepare a production cost worksheet using the FIFO method.
B. What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company? You must support your discussion by relevant readings and examples.