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Units are introduced into the process in Department 1 (this is the only material added in Department 1).
Spoilage occurs continuously through the department and normal spoilage should not exceed 10 percent of
the units started.
Department 2 adds material (packaging) at the 75 percent completion point; this material does not cause an
increase in the number of units being processed. A quality control inspection takes place when the goods are
80 percent complete. Spoilage should not exceed 5 percent of the units transferred in from Department 1.
The following production cost data are applicable for operations for August 20X7:
*This may not be the same amount determined for Department 1; ignore any difference and use this figure.
Required:
a. Compute the equivalent units of production in each department.
b. Determine the cost per equivalent unit in each department and compute the cost transferred out,
the cost in ending inventory, and the cost of spoilage (if necessary).
2. Consider the following data for a cooking department for the month of January:
Physical
Units
Work in process, beginning inventory* 11,000
Started during current period 74,000
To account for 85,000
Good units completed and transferred out during current
period:
From beginning work in process 11,000
Started and completed 50,000
Good units completed 61,000
Spoiled units 8,000
Work in process, ending inventory~ 16,000
Accounted for 85,000
Required: Prepare a detailed cost of production report. Use the FIFO method. Distinguish
between normal and abnormal spoilage.
3. Copperfield Manufacturing employs a weighted average process costing system for its
products. One product passes through three departments (Molding, Assembly, and Finishing)
during production. The following activity took place in the Finishing Department during April
20x6.
The costs per equivalent unit of production for each cost failure area as follows:
Required:
a. Calculate the equivalent units of production
b. Determine the cost of units transferred out of Finishing
c. Determine the cost of ending Work in Process Inventory
d. The portion of the total transferred in cost associated with beginning Work in Process
Inventory amounted to $18,900. What is the current period cost that was transferred in from
Assembly to Finishing?
e. Determine the cost associated with abnormal spoilage for the month.
Required: Determine the proper disposition of the May 20X8 costs for the Laminating
Department using the weighted average method.