Silver Head Company is a manufacturer of kitchen utensils. It produces all of itsproducts in one department. The information for the current month is as follows:Beginning work in process 40,000 unitsUnits started 52,000 unitsUnits completed 73,000 unitsEnding work in process 16,000 unitsBeginning work-in-process direct materials $30,000Beginning work-in-process conversion $ 8,000Direct materials added during month $126,400Direct manufacturing labour during month $60,4805Beginning work in process was 25% complete as to conversion. Direct materials areadded at the beginning of the process. Factory overhead is applied at a rate equal to40% of direct manufacturing labour. Ending work in process was 60% complete. 3percent of units completed is considered normal spoilage and all spoilage is detectedat the end of the process.Required:Prepare an appropriate schedule showing equivalent production, unit costs and the costdistribution (clearly detailing the breakdown of the total costs between cost of goodscompleted, normal spoilage, abnormal spoilage and ending inventory)?

Question

Silver Head Company is a manufacturer of kitchen utensils. It produces all of its
products in one department. The information for the current month is as follows:
Beginning work in process 40,000 units
Units started 52,000 units
Units completed 73,000 units
Ending work in process 16,000 units
Beginning work-in-process direct materials $30,000
Beginning work-in-process conversion $ 8,000
Direct materials added during month $126,400
Direct manufacturing labour during month $60,480
5
Beginning work in process was 25% complete as to conversion. Direct materials are
added at the beginning of the process. Factory overhead is applied at a rate equal to
40% of direct manufacturing labour. Ending work in process was 60% complete. 3
percent of units completed is considered normal spoilage and all spoilage is detected
at the end of the process.
Required:
Prepare an appropriate schedule showing equivalent production, unit costs and the cost
distribution (clearly detailing the breakdown of the total costs between cost of goods
completed, normal spoilage, abnormal spoilage and ending inventory)?

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