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Week 4 Chat Solutions

# Week 4 Chat Solutions - Week4ChatSolutions 18-17(20 min...

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Week 4 Chat Solutions 18-17 (20 min.) Weighted-average method, spoilage, equivalent units . Solution Exhibit 18-17 calculates equivalent units of work done to date for direct materials and conversion costs. SOLUTION EXHIBIT 18-17 Summarize Output in Physical Units and Compute Output in Equivalent Units; Weighted-Average Method of Process Costing with Spoilage, Gray Manufacturing Company for November 2012. (Step 1) (Step 2) Equivalent Units Flow of Production Physical Units Direct Materials Conversion Costs Work in process, beginning (given) Started during current period To account for Good units completed and transferred out during current period: Normal spoilage* 100 × 100%; 100 × 100% Abnormal spoilage 50 × 100%; 50 × 100% Work in process, ending (given) 2,000 × 100%; 2,000 × 30% 1,000 10,150 a 11,150 9,000 100 50 2,000 9,000 100 50 2,000 9,000 100 50 600

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Accounted for Equivalent units of work done to date 11,150 11,150 9,750 a From below, 11,150 total units are accounted for. Therefore, units started during current period must be = 11,150 – 1,000 = 10,150. *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, 30%.
18-18 (20 - 25 min.) Weighted-average method, assigning costs (continuation of 18-17). Solution Exhibit 18-18 summarizes total costs to account for, calculates the costs per equivalent unit for direct materials and conversion costs, and assigns total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. SOLUTION EXHIBIT 18-18 Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed, to Spoiled Units, and to Units in Ending Work in Process; Weighted-Average Method of Process Costing, Gray Manufacturing Company, November 2012. Total Production Costs Direct Materials Conversion Costs (Step 3) Work in process, beginning (given) Costs added in current period (given) Total costs to account for (Step 4) Costs incurred to date Divided by equivalent units of work done to date Cost per equivalent unit (Step 5) Assignment of costs Good units completed and transferred out (9,000 units) \$ 2,533 39,930 \$42,463 \$ 1,423 12,180 \$13,603 \$13,603 ÷ 11,150 \$ 1 .22

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