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# ch18sol - CHAPTER 18 SPOILAGE REWORK AND SCRAP 18-21(30 min...

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CHAPTER 18 SPOILAGE, REWORK, AND SCRAP 18-21 (30 min.) Weighted-average method, spoilage. 1. Solution Exhibit 18-21A calculates equivalent units of work done in the current period for direct materials and conversion costs. SOLUTION EXHIBIT 18-21A Summarize Output in Physical Units and Compute Output in Equivalent Units; Weighted-Average Method of Process Costing with Spoilage, Appleton Company for August 2006. (Step 1) (Step 2) Equivalent Units Flow of Production Physical Units Direct Materials Conversion Costs Work in process, beginning (given) 2,0 00 Started during current period (given) 10,000 To account for 12,000 Good units completed and tsfd. out during current period: 9,000 9,000 9,000 Normal spoilage a 900 (900 3 100%; 900 3 100%) 900 900 Abnormal spoilage b 300 (300 3 100%; 300 3 100%) 300 300 Work in process, ending c (given) 1,800 (1,800 3 100%; 1,800 3 75%) ______ 1,800 1,350 Accounted for 12,000 _____ _____ Work done to date 12,000 11,550 a Normal spoilage is 10% of good units transferred out: 10% × 9,000 = 900 units. Degree of completion of normal spoilage in this department: direct materials, 100%; conversion costs, 100%. b Total spoilage = Beg. units + Units started - Good units tsfd. out – Ending units = 2,000 + 10,000 - 9,000 - 1,800 = 1,200; Abnormal spoilage = Total spoilage – Normal spoilage = 1,200 – 900 = 300 units. Degree of completion of abnormal spoilage in this department: direct materials, 100%; conversion costs, 100%. c Degree of completion in this department: direct materials, 100%; conversion costs, 75%.

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2 & 3. Solution Exhibit 18-21B calculates the costs per equivalent unit for direct materials and conversion costs, summarizes total costs to account for, and assigns these costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process, using the weighted-average method. SOLUTION EXHIBIT 18-21B Compute Cost per Equivalent Unit, Summarize Total Costs to Account For, and Assign Total Costs to Units Completed, to Spoiled Units, and to Units in Ending Work in Process; Weighted-Average Method of Process Costing, Appleton Company, August 2006. Total Production Costs Direct Materials Conversion Costs (Step 3) Work in process, beginning (given) \$ 28,600 \$17,700 \$ 10,900 Costs added in current period (given) 174,300 81,300 93,000 Costs incurred to date \$99,000 \$103,900 Divide by equivalent units of work done to date 3 12,000 3 11,550 Cost per equivalent unit _______ \$ 8.250 \$ 8.9957 (Step 4) Total costs to account for \$202,900 (Step 5) Assignment of costs: Good units completed and transferred out (9,000 units) Costs before adding normal spoilage \$155,211 (9,000 d 3 \$8.25) + (9,000 d 3 \$8.9957) Normal spoilage (900 units) 15,521 (900 d 3 \$8.25) + (900 d 3 \$8.9957) (A) Total costs of good units completed and transferred out 170,732 (B) Abnormal spoilage (300 units) 5,174 (300 d 3 \$8.25) + (300 d 3 \$8.9957) (C) Work in process, ending (1,800 units):
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ch18sol - CHAPTER 18 SPOILAGE REWORK AND SCRAP 18-21(30 min...

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