Question

Incorporated manufactures medium-size desks in its Processing Department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some products are spoiled due to non-detectible defects. Inspection occurs at the end of the process. Spoiled desks generally constitute 10% of the good units. Data for March 2019 are as follows: WIP, beginning inventory 3/1/2019 30,000 Units Direct materials (100% complete) Conversion costs (50% complete) Started during March 80,000 Units Completed and transferred out 3/31/2019 85,000 Units WIP, ending inventory 3/31/2019 7,500 Units Direct materials (100% complete) Conversion costs (20% complete) Costs for March: WIP, beginning Inventory: Direct materials $ 40,000 Conversion costs 75,000 Direct materials added 415,000 Conversion costs added 417,000

Q1) What is the number of total spoiled units?

Q2) Normal spoilage totals ________.

Q3) Abnormal spoilage totals ________.

Q4) What is the total cost per equivalent unit using the First-In-First Out method of process costing?

Q5) What cost is allocated to abnormal spoilage using the First-In-First Out method?

Q6) What is the amount of direct materials and conversion costs assigned to ending work in process using the First-In-First Out method?

Q7) What is the cost assigned to units completed and transferred out using the First-In-First Out method? 

PLEASE: (Answer the questions with the details)

Answer 1

STATEMENT OF EQUIVALENT PRODUCTION

INPUT DETAILS	UNITS	OUTPUT DETAILS	UNITS	EQUIVALENT UNITS	UNITS	EQUIVALENT UNITS	UNITS
				MATERIAL	100%	CONVERSION COST
OPENING WIP	30000	COMPLETED AND TRANSFERRED	85000	85000		85000
UNITS INTRODUCED	80000	NORMAL LOSS 10% OF GOOD UNITS MEAN	8500	NIL		NIL
		ABNORMAL LOSS	9000	9000	100%	1800	20%
		CLOSING WIP	7500	7500	100%	1500	20%
TOTAL	110000		110000	101500		88300

STATEMENT OF COST

DETAILS	COST AT THE BEGINING OF PROCESS	COST ADDED	TOTAL COST	EQUIVALENT PRODUCTION	COST PER UNIT
MATERIAL CONVERSION COST	40000 75000	415000 417000	455000 492000	101500 88300	4.48 5.57

STATEMENT OF DISTRIBUTION OF COST

1. COMPLETED AND TRANSFERRED GOODS [email protected] 854250

2. ABNORMAL LOSS 9000 UNITS

MATERIAL 100% [email protected] 40320

CONVERSION COST 20% [email protected] 10026 50346

3. CLOSING WIP 7500 UNITS

MATERIAL 100% [email protected] 33600

CONVERSIO 20% [email protected] 8355 41955

1. TOTAL NO OF SPOILED UNITS 16500

NORMAL WASTAGE 7500

ABNORMAL WASTAGE 9000