Problems18-31 Weighted-average method, spoilage. The Seafood Company is a food-processing firm basedin Maine. It operates under the weighted-average method of process costing and has two departments:cleaning and packaging. For the cleaning department, conversion costs are added evenly during theprocess, and direct materials are added at the beginning of the process. Spoiled units are detected uponinspection at the end of the process and are disposed of at zero net disposal value. All completed work istransferred to the packaging department. Summary data for May followHome InsertPage Layout FormulasDataReviewViewPhysical Direct ConversionThe Seafood Company: Cleaning DepartmentUnits MaterialsCosts3,600 5,3161,953100%2 Work inof completion ofwork in60%4 Started dMa5 Good units completed and tansferred out during May6 Work in30,00024,6005,04031of completion of ending work in100%30%$55,500$44,6598 Total costs added9 Normal10as aof good units10%of completion of normal spoilageof completion of abnormal spoil100%100%100%100%For the cleaning department, summarize the total costs to account for and assign those costs to units com-pleted and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work inprocess. (Problem 18-33 explores additional facets of this problem.)

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Asked Nov 12, 2018
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Problems
18-31 Weighted-average method, spoilage. The Seafood Company is a food-processing firm based
in Maine. It operates under the weighted-average method of process costing and has two departments:
cleaning and packaging. For the cleaning department, conversion costs are added evenly during the
process, and direct materials are added at the beginning of the process. Spoiled units are detected upon
inspection at the end of the process and are disposed of at zero net disposal value. All completed work is
transferred to the packaging department. Summary data for May follow
Home Insert
Page Layout Formulas
Data
Review
View
Physical Direct Conversion
The Seafood Company: Cleaning Department
Units Materials
Costs
3,600 5,3161,953
100%
2 Work in
of completion of
work in
60%
4 Started d
Ma
5 Good units completed and tansferred out during May
6 Work in
30,000
24,600
5,040
31
of completion of ending work in
100%
30%
$55,500$44,659
8 Total costs added
9 Normal
10
as a
of good units
10%
of completion of normal spoilage
of completion of abnormal spoil
100%
100%
100%
100%
For the cleaning department, summarize the total costs to account for and assign those costs to units com-
pleted and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in
process. (Problem 18-33 explores additional facets of this problem.)
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Problems 18-31 Weighted-average method, spoilage. The Seafood Company is a food-processing firm based in Maine. It operates under the weighted-average method of process costing and has two departments: cleaning and packaging. For the cleaning department, conversion costs are added evenly during the process, and direct materials are added at the beginning of the process. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal value. All completed work is transferred to the packaging department. Summary data for May follow Home Insert Page Layout Formulas Data Review View Physical Direct Conversion The Seafood Company: Cleaning Department Units Materials Costs 3,600 5,3161,953 100% 2 Work in of completion of work in 60% 4 Started d Ma 5 Good units completed and tansferred out during May 6 Work in 30,000 24,600 5,040 31 of completion of ending work in 100% 30% $55,500$44,659 8 Total costs added 9 Normal 10 as a of good units 10% of completion of normal spoilage of completion of abnormal spoil 100% 100% 100% 100% For the cleaning department, summarize the total costs to account for and assign those costs to units com- pleted and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. (Problem 18-33 explores additional facets of this problem.)

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Expert Answer

Step 1

To determine: The total cost to account for of the cleaning department and assigning them to units completed and transferred out and to abnormal spoilage and units lying in ending work i progress.

Step 2

Explanation:

Total loss in units= Opening WIP +Units Started during the period- goods completed and transferred out- Ending WIP

=3600+30000-24600-5040=3,960 units

Normal loss=10%  of good units =10% of 24600 =2460 units

Abnormal loss= Total loss-Normal loss= 3960-2460 =1500 units

The Normal Loss are included in the cost of production as they are inherent to production and are inevitable in nature. Example include normal loss due to evaporation, or normal loss in weight due to loss of moisture.However, Abnormal loss are excluded from cost of production and shown as loss seperately . ABnormal loss may include loss due to accident spillage or spoilage, fire or any abnormal event.

 

 

 

 

 

 

 

 

 

 

 

 

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Step 3

Solution:

Calculation of Units to be Accounted for

 

Units

Opening Work in Progress

3,600

Started during this period

30,000

Units to be Accounted for

33,600

 

...

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