Question

liet to the information for Alfombra Inc. on the previous page. The owner of Alfombra sisted on a formal report that provided all the details of the weighted average miethod. In manufacturing process, all materials are added uniformly throughout the process Required: Prepare a production report for the throw rug department for August using the weighted age method. Problem 6-61 Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment Mimasca Inc. manufactures various holiday masks. Each mask is shaped from a piece of rubbe in the molding department. The masks are then transferred to the finishing department, whete they are painted and have elastic bands attached. Mimasca uses the weighted average method. May, the molding department reported the following data: a. BWIP consisted of 15,000 units, 20% complete. Cost in beginning inventory totaled $1,656 b. Costs added to production during the month were $26,094. c. At the end of the month, 45,000 units were transferred out to finishing. Then, 5,000 unit remained in EWIP, 25% complete. Required: 1. Prepare a physical flow schedule. 2. Calculate equivalent units of production. 3. Compute unit cost. 4. Calculate the cost of goods transferred to finishing at the end of the month. Calculate the cost of ending inventory 5. CONCEPTUAL CONNECTION Assume that the masks are inspected at the end of the molding process. Ofthe 45,000 units inspected, 2.500 are rejected as faulty and are discarded. Thus, only 42,500 units manager of Mimasca considers all suc assign any of this cost to the 42,500 g Your task is to determine the cost o how you would account for this spoilage cost. Now suppose this spoilage cost is just part of the cost of producing thegooanage Therefore, he wants to assign this cost to the good productio are transferred to the finishing department. The h spoilage as abnormal and does not want to f this spoilage of 2,500 units and then to discuss units transferred out ood units produced and transferred to finishing. units of spoilage be handled. (Hint: Spoiled units are a type of output, and equivaln how this would can be calculate

Answer 1

Part 4 calculation of cost of units transferred out a) Cost of units transferred to finishing 45,000 x $ 0.6 $27,000.00 b) cost of ending inventory 5,000 x 0.6 $3,000.00 Part 5 Assigining costs to spoiled units Transferred out units Units spoiled Ending WIP [ 5,000 x 25%) Total 42,500 2,500 1,250 46,250 The cost per equivalent unit is the same calculated without spoilage Spoilage cost 2,500 x $0.6 $1,500 If the spoilage cost is abnormal, then it will not be added to production costs. It is seperately stated as loss for the period.