Anderson Plastics makes plastic rear lamps for cars. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal price. Assume normal spoilage is 10% of the good output produced. The following information about actual conversion costs for April is available: Actual units Equivalent units Total costs Work in progress, April 1 15,000 14,000 €145,600 Work done during April 29,000 28,000 308,000 To account for 44,000 42,000 €453,600 Good units completed and transferred 20,000 20,000 ? out during April Normal and abnormal spoilage 4,000 4,000 ? Work in progress, April 30 20,000 18,000 ? 7.Assume that Anderson uses the weighted-average method. What is the cost of normal spoilage for conversion costs for the month of April? a) €21,600 b) €22,000 c) €43,200 d) €44,000 8.Assume that Anderson uses the FIFO method. What is the cost of abnormal spoilage for conversion costs for the month of April? a) €21,600 b) €22,000 c) €43,200 d) €44,000
Note: Answer Questions (7) and (8) using the following information about Anderson Plastics
Anderson Plastics makes plastic rear lamps for cars. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal price. Assume normal spoilage is 10% of the good output produced.
The following information about actual conversion costs for April is available:
Actual units Equivalent units Total costs
Work in progress, April 1 15,000 14,000 €145,600
Work done during April 29,000 28,000 308,000
To account for 44,000 42,000 €453,600
Good units completed and transferred 20,000 20,000 ?
out during April
Normal and abnormal spoilage 4,000 4,000 ?
Work in progress, April 30 20,000 18,000 ?
7.Assume that Anderson uses the weighted-average method. What is the cost of normal spoilage for conversion costs for the month of April?
a) €21,600
b) €22,000
c) €43,200
d) €44,000
8.Assume that Anderson uses the FIFO method. What is the cost of abnormal spoilage for conversion costs for the month of April?
a) €21,600
b) €22,000
c) €43,200
d) €44,000
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