C normal spoilage costs would be added to the cost of

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c. Normal spoilage costs would be added to the cost of the good units completed during the period; in contrast, abnormal spoilage costs would be written off as a loss. d. Normal spoilage costs would be allocated between the cost of good units completed during the period and the ending work-in-process inventory. In contrast, abnormal spoilage costs would be written off as a loss. 222. CSO: 1D2b LOS: 1D2c When considering normal and abnormal spoilage, which one of the following is theoretically the best accounting method for spoilage in a process-costing system? a. Both normal and abnormal spoilage cost should be charged to a separate expense account. b. Normal spoilage cost should be charged to good units and abnormal spoilage cost should be charged to a separate expense account. c. Both normal and abnormal spoilage costs should be charged to good units. d. Normal spoilage costs should be charged to a separate expense account and abnormal spoilage cost should be charged to good units.
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87 223. CSO: 1D2b LOS: 1D2b Southwood Industries uses a process costing system and inspects its goods at the end of manufacturing. The inspection as of June 30 revealed the following information for the month of June. Good units completed 16,000 Normal spoilage (units) 300 Abnormal spoilage (units) 100 Unit costs were: materials, $3.50; and conversion costs, $6.00. The number of units that Southwood would transfer to its finished goods inventory and the related cost of these units are Units Transferred Cost a. 16,000 $152,000. b. 16,000 $154,850. c. 16,000 $155,800. d. 16,300 $154,850. 224. CSO: 1D2b LOS: 1D2f Colt Company uses a weighted-average process cost system to account for the cost of producing a chemical compound. As part of production, Material B is added when the goods are 80% complete. Beginning work-in-process inventory for the current month was 20,000 units, 90% complete. During the month, 70,000 units were started in process, and 65,000 units were completed. There were no lost or spoiled units. If the ending inventory was 60% complete, the total equivalent units for Material B for the month was a. 65,000 units. b. 70,000 units. c. 85,000 units. d. 90,000 units.
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88 225. CSO: 1D2b LOS: 1D2b Oster Manufacturing uses a weighted-average process costing system and has the following costs and activity during October. Materials $40,000 Conversion cost 32,500 Total beginning work-in-process inventory $72,500 Materials $ 700,000 Conversion cost 617,500 Total production costs - October $1,317,500 Production completed 60,000 units Work-in-process, October 31 20,000 units All materials are introduced at the start of the manufacturing process, and conversion cost is incurred uniformly throughout production. Conversations with plant personnel reveal that, on average, month-end in-process inventory is 25% complete. Assuming no spoilage, how should Oster’s October manufacturing cost be assigned? Production Completed Work-in-Process a. $1,042,500 $347,500.
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