Question 1 The following data, in physical units, describe a grinding process for January: Work in process, beginning Started during current period To account for Spoiled units Good units completed and transferred out Work in process, ending Accounted for 19,000 50,000 169,000 12,000 132,000 25,000 169,000 Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the good units passing inspection. Required: 1. Compute the normal and abnormal spoilage in units. 2. Assume that the equivalent-unit cost of a spoiled unit is $10. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.

Question 1 The following data, in physical units, describe a grinding process for January: Work in process, beginning Started during current period To account for Spoiled units Good units completed and transferred out Work in process, ending Accounted for 19,000 50,000 169,000 12,000 132,000 25,000 169,000 Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the good units passing inspection. Required: 1. Compute the normal and abnormal spoilage in units. 2. Assume that the equivalent-unit cost of a spoiled unit is $10. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 3BE: The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory...

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