In: Accounting
Albers Refrigerator Compnay produces refrigerators in its
Processing Department. Direct materials are added at the start of
the production process. Conversion costs are added evenly
throughout the production process. Inspection takes place as units
are placed into production. After inspection, some units are
spoiled due to material defects. Spoiled units generally constitute
4% of the good units. Data provided for April 2015 are as
follows:
WIP, beginning inventory 4/1/2015 50,000 units
Direct materials (100% complete)
Conversion costs (50% complete)
Started during April 164,000 units
Completed and transferred out 162,000 units
WIP, ending inventory 4/30/2015 30,000 units
Direct materials (100% complete)
Conversion costs (25% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 300,000
Conversion costs 88,000
Direct materials added 419,832
Conversion costs added 219,786
1. What are the normal and abnormal spoilage units, respectively,
for April when using FIFO?
Group of answer choices
2,800 units; 2,960 units
6,480 units; 15,520 units
6,560 units; 3,280 units
6,480 units; 22,000 units
2. What costs would be associated with normal and abnormal
spoilage, respectively, using the FIFO method of process
costing?
Group of answer choices
$16,000; $8,000
$60,216; $25,142
$25,142; $60,216
$2,514; $6,020
3.What costs are associated with the ending work-in-process
inventory for direct materials and conversion costs, respectively,
using the FIFO method of process costing?
Group of answer choices
$80,000; $46,200
$76,800; $9,900
$99,000; $76,800
$76,500; $9,700
4.Which of the following journal entries correctly represents
the transfer of completed goods begun during April using the FIFO
method of process costing?
Group of answer choices
Finished Goods 855,559
Work in Process 855,559
Finished Goods 880,702
Loss from Abnormal Spoilage 60,216
Work in Process 940,918
Loss from Normal Spoilage 25,142
Finished Goods 25,142
Finished Goods 940,918
Work in Process 940,918
From Above calculations , answers will be as follows :
1. 6,480 units , 15,520 units
2. Normal Loss = Total units cost * No. of Normal loss units
= (2.56 + 1.32) * 6,480 Units = $25,142
Therefore , answer is $25,142 , $60,216
3.$76,800 , $9,900
4.A ) Finished Goods $ 855,559
Work In Progress $ 855,559
B) Loss from Normal Spoilage $25,142
Finished Goods $25,142