Question

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.

Q.1. XYZ Company makes Plastic chairs in its forming department, and it uses the average method of process costing. All direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal value. Summary data for August 2019 are as follows: Home Insert Formulas Data View Page Layout А Review B Physical Units 2,000 Direct Materials $17,700 100% D Conversion Costs $10,900 50% 4 5 1 2 Work in process, beginning inventory (August 1) 3 Degree of completion of beginning work in process Started during August Good units completed and transferred out during August 6 Work in process, ending inventory (August 31) 7 Degree of completion of ending work in process 8 Total costs added during August 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage 10,000 9,000 1,800 100% $81,300 75% $93,000 10% 100% 100% 100% 100%

Answer 1

Equivalent unit calculation(Weighted average cost method)

Particulars	Input	Particulars	Output	Equivalent unit
				Materilas	Conversion
	%	Unit	%	Unit
Opening W.I.P	2000	Units completed and transferred to next process	9000	100	9000	100	9000
Unit introduced	10000	Normal spoilage(10000*10%)	1000
		Abnormal spoilage (B.f)	200	100	200	100	200
		W.i.P at the end	1800	100	1800	75	1350
Total	12000		12000		11000		10550

Cost per equilant unit for each element
Particulars	Materials	Conversion	Total
Cost of opening WIP	17700	10900	28600
cost incurred during the month	81300	93000	174300
Total cost	99000	103900	202900
Equivalent unit	11000	10550	21550
Cost per equilant unit	9	9.848341232	18.8483

Statement of apportion of cost
	Amount	Amount
Value of units completed and transferred	(9000*18.883)	169635.0711
Closing WIP		29495.26066
Material(1800*9)	16200
Conversion (1350*9.8483)	13295.3
Abnormal loss		3769.668246
Material (200*9)	1800
Conversion(200*9.848)	1969.67
Total		202900

Particulars	Unit	Amount	articulars	Unit	Amount
Opening WIP	2000	28600	Normal loss	1000
Material	10000	81300	Abnormal loss	200	3769.668246
Conversion		93000	Completed and transferred to next process	9000	169634.7
			closing WIP		29495.26
Total	12000	202900			202900