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Remington Shipping 1200

Price: $1.99

Remington Shipping, 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 company.

Remington Shipping 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.

Containers in transit, April 1  0  
Containers loaded  1,200  
Containers in transit, April 30  350 40% of direct materials and
  20% of conversion costs

(a) Determine the physical fl ow of containers for the month.
(b) Calculate the equivalent units for direct materials and conversion costs.

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