Question

¨The Grant Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. Now we focus on the Finishing Department.

¨Conversion costs are added evenly during the process. Direct material costs are added when production is 90% complete. The inspection point is at 80% stage of production. Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net disposal value.

¨In September, the following are recorded:

	Physical Units	Transferred-in Costs	Direct Materials	Conversion Costs
Beginning WIP	12,000
Percentage of completion		100%	0%	25%
Costs included in beginning WIP		$86,400	$0	$57,200
Units started	78,000
Units completed	58,000
Units in ending WIP	20,000
Percentage of completion		100%	100%	95%
Spoiled units	12,000
Total costs added during current period
Transferred-in costs		$737,100
Direct materials			$731,640
Conversion costs				$1,402,010

¨Requirement:

For September, Summarize total costs to account for and assign these costs to units completed and transferred out, to abnormal spoilage, and to units in ending work in process ( In FIFO Method)

Answer 1