Howell Company uses the average cost method of process costing. Howell had 1,00 . units in beginning work-in-process which were 75% complete. Costs associated with this inventory were $3,200 . When calculating the cost per equivalent unit for the month of June, Howell's controller should:
a. Not consider the $3,200 as those costs were incurred in a prior period.
b. Calculate the cost to complete the 1,00 . items in beginning work-in-process separately.
c. Include the $3,200 with the current month's cost to arrive at total cost for production to date.
d. Include the equivalent units to complete the beginning work-in-process inventory to arrive at the equivalent units for the period.
c
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Otool Inc. is considering using stocks of an old raw material in a special project. The special project would require all 170 kilograms of the raw material that are in stock and that originally cost the company $2436 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $6.9 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $6.20 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $65 for all 170 kilograms. What is the relevant cost of the 170 kilograms of the raw material when deciding whether to proceed with the special project?
A. $1150 B. $1173 C. $989 D. $1054