Acct306 Homework Ch18

Acct306 Homework Ch18 - 18-1 CHAPTER 18 SPOILAGE, REWORK,...

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Unformatted text preview: 18-1 CHAPTER 18 SPOILAGE, REWORK, AND SCRAP 18-30Weighted-average method, spoilage. Solution Exhibit 18-30 summarizes total costs to account for, calculates the equivalent units of work done to date for each cost category, and assigns total costs to units completed (including normal spoilage), to abnormal spoilage, and to units in ending work in process using the weighted-average method. SOLUTION EXHIBIT 18-30 Weighted-Average Method of Process Costing with Spoilage; Cleaning Department of the Boston Company for May. PANEL A: Steps 1 and 2Summarize Output in Physical Units and Compute Output in Equivalent Units (Step 1) (Step 2) Equivalent Units Flow of ProductionPhysical Units Direct Materials Conversion Costs Work in process, beginning (given) Started during current period (given) To account for Good units completed and transferred out during current period: Normal spoilage* 2,050 100%; 2,050 100% Abnormal spoilage 1,250 100%; 1,250 100% Work in process, ending (given) 4,200 100%; 4,200 30% Accounted for Equivalent units of work done to date 3,000 25,000 28,000 20,500 2,050 1,250 4,200 28,000 20,500 2,050 1,250 4,200 28,000 20,500 2,050 1,250 1,260 25,060 *Normal spoilage is 10% of good units transferred out: 10% 20,500 = 2,050 units. Degree of completion of normal spoilage in this department: direct materials, 100%; conversion costs, 100%. Total spoilage = 3000 + 25,000 20,500 4,200 = 3,300 units; Abnormal spoilage = 3,300 2,050 = 1,250 units. 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%.18-2 SOLUTION EXHIBIT 18-30 PANEL B: Steps 3, 4, and 5 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 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 (20,500 units) $ 7,200 83,466 $90,666 $ 4,500 46,250 $50,750 $50,750 28,000 $1.8125 $ 2,700 37,216 $39,916 $39,916 25,060 $1.5928 Costs before adding normal spoilage Normal spoilage (2,050 units) (A) Total costs of good units completed and transferred out (B) Abnormal spoilage (1,250 units) (C) Work in process, ending (4,200 units) (A)+(B)+(C) Total costs accounted for $69,809 6,981 76,790 4,257 9,619 $90,666 (20,500#1.8125) + (2,050#1.8125) + (1,250#1.8125) + (4,200#1.8125) + $50,750 + (20,500#1.5928) (2,050#1.5928) (1,250#1.5928) (1,260#1.5928) $39,916 *These numbers are all calculated using the unit costs carried out to three decimal places....
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Acct306 Homework Ch18 - 18-1 CHAPTER 18 SPOILAGE, REWORK,...

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