ACCT303Chapter18 - CHAPTER 18 a.i.1.a.i.1.a.i. SPOILAGE,...

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Unformatted text preview: CHAPTER 18 a.i.1.a.i.1.a.i. SPOILAGE, REWORK, AND SCRAP a.i.1.a.i.1.a.ii. a.i.1.a.i.1.a.iii. 18-16 (510 min.) Normal and abnormal spoilage in units. a.i.1.a.i.1.a.iv. a.i.1.a.i.1.a.v. 1. Total spoiled units 12,000 Normal spoilage in units, 5% 132,000 6,600 a.i.1.a.i.1.a.vii. Abnormal spoilage in units 5,400 a.i.1.a.i.1.a.viii. a.i.1.a.i.1.a.ix. 2. Abnormal spoilage, 5,400 $10 $ 54,000 a.i.1.a.i.1.a.x. Normal spoilage, 6,600 $10 66,000 a.i.1.a.i.1.a.xi. Potential savings, 12,000 $10 $120,000 a.i.1.a.i.1.a.xii. a.i.1.a.i.1.a.xiii. Regardless of the targeted normal spoilage, abnormal spoilage is non-recurring and avoidable. The targeted normal spoilage rate is subject to change. Many companies have reduced their spoilage to almost zero, which would realize all potential savings. Of course, zero spoilage usually means higher-quality products, more customer satisfaction, more employee satisfaction, and various beneficial effects on nonmanufacturing (for example, purchasing) costs of direct materials. a.i.1.a.i.1.a.xiv. a.i.1.a.i.1.a.xv. 18-17 (20 min.) Weighted-average method, spoilage, equivalent units . a.i.1.a.i.1.a.xvi. a.i.1.a.i.1.a.xvii. Solution Exhibit 18-17 calculates equivalent units of work done to date for direct materials and conversion costs. a.i.1.a.i.1.a.xviii. a.i.1.a.i.1.a.xix. SOLUTION EXHIBIT 18- 17 Summarize Output in Physical Units and Compute Output in Equivalent Units; Weighted-Average Method of Process Costing with Spoilage, a.i.1.a.i.1.a.xx. Gray Manufacturing Company for November 2009. a.i.1.a.i.1.a.xxi. a.i.1.a.i.1.a.xxii. a.i.1.a.i.1.a.xxiii. a.i.1.a.i.1.a.xxiv. a.i.1.a.i.1.a.xxv. (Step 2) a.i.1.a.i.1.a.xxvi. Equivalent Units a.i.1.a.i.1.a.xxvii. a.i.1.a.i.1.a.xxviii. a.i.1.a.i.1.a.xxix. a.i.1.a.i.1.a.xxxi. a.i.1.a.i.1.a.xxxii. a.i.1.a.i.1.a.xxxiii. a.i.1.a.i.1.a.xxxiv. 18-< a.i.1.a.i.1.a.xxxv. Work in process, a.i.1.a.i.1.a.xxxvi. Started during current a.i.1.a.i.1.a.xxxvii. To account for a.i.1.a.i.1.a.xxxviii. Good units completed and a.i.1.a.i.1.a.xxxix. during current period: a.i.1.a.i.1.a.xl. Normal spoilage* a.i.1.a.i.1.a.xli. 100 100%; 100 a.i.1.a.i.1.a.xlii. Abnormal spoilage a.i.1.a.i.1.a.xliii. 50 a.i.1.a.i.1.a.xliv. Work in process, ending a.i.1.a.i.1.a.xlv. 2,000 100%; 2,000 a.i.1.a.i.1.a.xlvi. Accounted for a.i.1.a.i.1.a.xlvii. Work done to date a.i.1.a.i.1.a.xlviii. 1,000 a.i.1.a.i.1.a.xlix. 10,150 a a.i.1.a.i.1.a.l. 11,150 a.i.1.a.i.1.a.lii. 9,000 a.i.1.a.i.1.a.liii. 100 a.i.1.a.i.1.a.liv. 50 a.i.1.a.i.1.a.lvi. a.i.1.a.i.1.a.lvii. 2,000 a.i.1.a.i.1.a.lviii. a.i.1.a.i.1.a.lix. 11,150 a.i.1.a.i.1.a.lx. a.i.1.a.i.1.a.lxi....
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This note was uploaded on 11/02/2011 for the course ACCOUNTING 4642 taught by Professor Dr.irabates during the Spring '11 term at Florida A&M.

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ACCT303Chapter18 - CHAPTER 18 a.i.1.a.i.1.a.i. SPOILAGE,...

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