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Saratoga Systems produces a single product. The production process requires all material to be brought to the shop floor before any

work begins. The material is then processed and assembled and then transferred to finished goods inventory. Every unit is completely

dentical in specification and use, and no customization is possible. Because of the cost of the product, only a few units are produced

in any one month.

During June, only three units were started, and these were labelled ID$061,$ ID$062,$ and ID$063.$ There was no beginning inventory of any

kind on June $1.$ Records from the raw material store and employee time records show the following requisitions and direct labor costs:

The difference in the material cost represents the historical cost of material purchased at different times. The difference in labor cost

represents the difference in seniority $($not skill$)$ of the individual employees.

Overhead for the month of June totaled $$63,000.$

During March, ID$061$ and ID$062$ were completed and transferred to finished goods. ID$063$ was still in process on June $30.$

Required:

a$.$ Suppose Saratoga Systems uses a job cost system and applies overhead to products based on direct labor cost. What will be the

cost of the units transferred to finished goods? What will be the amount in Work$-$in$-$Process Ending Inventory?

b$.$ Suppose Saratoga Systems uses process costing and ID$063$ was $25$ percent complete with respect to conversion cost $($direct labor

and overhead cost$).$ Assume that direct materials cost is not traced to individual units. What will be the cost of the units transferred

to finished goods? What will be the amount in Work$-$in$-$Process Ending Inventory?

c$.$ Based on the provided information, does process costing appear to be sufficient?

Complete this question by entering your answers in the tabs below.

Suppose Saratoga Systems uses process costing and ID$063$ was $25$ percent complete with respect to conversion cost $($direct

labor and overhead cost$).$ Assume that direct materials cost is not traced to individual units. What will be the cost of the units

transferred to finished goods? What will be the amount in Work$-$in$-$Process Ending Inventory?

Note: Do not round intermediate calculations.

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Cost of goods transferred out

Work in process ending inventory

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