Question

RuE TARLE Question 3-10 marks The following data relates to October 2018 All direct materials are added at the beginning of the process Spoiled units are disposed of for no proceeds DM $ Units Conversion $ 40,000 $ 100 % 2000 35,000 WIP-beginning Degree of Completion Beginning WIP Started during October Goods completed and transferred out 35% 6000 5000 2200 WIP-end 100 % 130,000 $ 55% Degree of Completion End WIP 245,400 October Costs 5% Normal spoilage (5 marks) ASSIGN COSTS OF ABNORMAL SPOILAGE-USING WIEGHTED AVERAGE (5 marks) ASSIGN COSTS OF ABNORMAL SPOILAGE-USING FIFO

Answer 1

Cale ftauivalent unie Converuion nits DOC units 300 ao00 2000 a-WIP 6000 ntro & OWIP Intraducid 3O00 3000 lcot &DOo 0smbluted Camp& 5000 NOT mal los 3oo 500 100 to aaoo 55 Soo 1100 500 100 teiny WIP 59O0 5700 8000 cocts unit Caleulatien Carverion cout OM 245 HO0 130, 000 Coct Noumal Jou Caute ausyoo 5900 130,000 5%00 equi unis Coit /unit a8 पा-5१

Abnormal loe OM converuion cout पOO 500 aa-8 500 $ 3.82,195

FIFO method

NOTE - I have assumed normal loss on only the current input units. Alternatively it can be assumed on the total input as well (including opening WIP). It will change the abnormal loss to 400 units.

WEIGHTED AVERAGE method

In this method, opening WIP will also be included to calculate the cost per unit. All other calculations remaining the same.

Neighted Calculation aup metod Caet unit OM 0onwcion cout Cast Q WIP othr cost 40,000 130,c00 70,000 35000 au5,400 wits 5700 5900 129.82 $47.53 coet lunit Abnormal os a9-88 Na10 500 M Conu cout -53 a3 165 500 $ 39,615