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Acc3333 Ch 18 In Class solns 2010

Acc3333 Ch 18 In Class solns 2010 - Chapter 18 In-Class...

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Chapter 18 - In-Class Solutions 18-30 (30 min.) Weighted-average method, spoilage. 1. Solution Exhibit 18-30, Panel A, calculates the equivalent units of work done to date for each cost category in March 2010. 2. & 3. Solution Exhibit 18-30, Panel B, calculates the cost per equivalent unit for each cost category, summarizes total costs to account for, and assigns these costs to units completed (including normal spoilage), to abnormal spoilage, and to units in ending work in process using the weighted-average method. First-in, First-out (FIFO) Method of Process Costing with Spoilage, Cooking Department of Spicier Inc. for January PANEL A: Summarize Output in Physical Units and Compute Equivalent Units Physical Equivalent Units Units Direct Conversion Flow of Production (given) Materials Costs Work in process, beginning 30,000 Started during current period 50,000 To account for 80,000 Good units completed and transferred out during current period: 40,000 40,000 40,000 Normal spoilage* 6,000 × 100%; 6,000 × 100% 6,000 6,000 6,000 Abnormal spoilage 2,000 × 100%; 2,000 × 100% 2,000 2,000 2,000 Work in process ending 32,000 × 100%; 32,000 × 75% 32,000 32,000 24,000 Accounted for 80,000 Work done to date 80,000 72,000

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*Degree of completion of normal spoilage in this department: direct materials, 100%; conversion costs, 100%. Degree of completion of abnormal spoilage in this department: direct materials, 100%; conversion costs, 100%. Degree of completion in this department: direct materials, 100%; conversion costs, 75%. PANEL B: Compute Equivalent Unit Costs, Summarize Total Costs to Account for, and Assign Costs to Units Completed, to Spoilage Units, and to Units in Ending Work in Process Total Production Direct Conversion Costs Materials Costs Work in process, beginning (given) \$504,000 \$288,000 \$216,000 Costs added in current period (given) 1,203,840 504,000 699,840 Costs incurred to date \$792,000 \$915,840 Divide by equiv. units of work to date ÷ 80,000 ÷ 72,000 Equivalent unit costs of work done to date \$ 9.90 \$ 12,72 Total costs to account for \$1,707,840 Assignment of costs: Good units completed and transferred out (40,000 units): Costs before adding normal spoilage \$ 904,800 (40,000 # × \$9.90) + (40,000 # × \$12.72) Normal spoilage (6,000 units) 135,720 (6,000 # × \$9.90) + (6,000 # × \$12.72) (A) Total cost of good units completed and transferred out 1,040,520 (B) Abnormal spoilage (2,000 units) 45,240 (2,000 # × \$9.90) + (2,000 # × \$12.72) Work in process, ending (32,000 units) Direct materials 316,800 32,000 # × \$9.90 Conversion costs 305,280 24,000 # × \$12.72 (C) Total work in process, ending 622,080 (A)+(B)+(C) Total costs accounted for \$1,707,840 # Equivalent units of direct materials and conversion costs calculated in Panel A.
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