1. James Company uses process costing to track its costs in two sequential production departments: Forming and Finishing. The following information is provided
regarding the Forming Department: Forming Department Month Ended June 30 Unit information Beginning work in process, June 1 — 4,000 Started into production during
June — 22,000 Completed and transferred to Finished Department during June — 20,000 Ending work in process, June 30 (20% complete as to direct materials and 50%
complete as to conversion costs) — 6,000 Cost information: Beginning work in process as of June 1 (consists of $1,000 of direct materials costs and $4,500 of
conversion costs) — $5,500 Direct materials used in June — $7,268 Conversion costs incurred in June — $32,990 Required: (a) Calculate the equivalent units for
conversion costs. (Show your work) (b) Calculate the cost per equivalent unit for conversion costs. (Show your work) (Points : 30) 2. Harry Corp buys equipment for
$194,000 that will last for 9 years. The equipment will generate cash flows of $36,000 per year and will have no salvage value at the end of its life. Ignore taxes.
Use 10% required rate of return. (a) What is the Present Value (PV) of this investment (at 10%)? (b) What is the NET Present Value (NPV) of this investment Should you
buy the equipment if you need 10%? (c) What is the Internal Rate of Return (IRR) of this investment? (d) What is the payback period?
