Cost Accounting
Monthly information is as follows: Beginning of month End of month
Work in process Inventory: 1,000 units 4,000 units
Conversion: degree of completion in WIP 60% 40%
Direct Material Costs in Beginning WIP $ 8,100 ?
Conversion Costs in Beginning WIP $11,300 ?
During the month: Costs incurred for Direct Materials $27,975
Costs incurred for Conversion $27,235
At month end: 2,860 good units were completed, 140 units were spoiled
Direct Materials: 90% are added at the beginning of the process, the rest at 90% conversion
Conversion costs: Added evenly during the process.
Spoiled Units: Detected at 100% conversion. Normal Spoilage = 2% of units started
Required:
A. Using FIFO, calculate:
i. Ending WIP
ii. Cost of Goods Manufactured
iii. Spoilage expense
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Required:
1. For each cost category, calculate equivalent units. Show
physical units in the first column of your schedule.
2. Summarize total costs to account for; calculate cost per
equivalent unit for each cost category; and assign total costs to
units completed and transferred out (including normal spoilage), to
abnormal spoilage, and to units in ending work in process.
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1. For each cost category, calculate equivalent units. Show
physical units in the first column of your schedule.
2. Summarize total costs to account for; calculate cost per
equivalent unit for each cost category; and assign total costs to
units completed and transferred out (including normal spoilage), to
abnormal spoilage, and to units in ending work in process.
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Tap Corp. is a pharma company based in London. It makes a drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. Tap uses the weighted average method of process costing. The following information for June 2010 is available. Equivalent Units Physical Direct Conversion Units...
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